PredictWise Blog

State of election markets: 365 Days or 1 Year!

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Today begins the one year countdown to Election Day 2016. Serious candidates have already come and gone (looking at you Scott Walker and Joe Biden), but while the Democratic side is basically wrapped up, the Republican side is still in a tight battle.

The top contenders for the Republican and Democratic nomination stayed stable this week. Marco Rubio continues to consolidate Republican establishment support, while Hillary Clinton, thanks to a limited debate schedule, basically walks away with the Democratic nomination.

The most interesting movement of the week was from Ben Carson, who went from unlikely to really unlikely on the strength of questions about his resume. There was no smoking gun; it is unlikely that any individual discrepancy will sink his candidacy. Instead, there is concern about both the confluence of questions and about what else the public does not know about the un-vetted candidate.

The markets were not too impressed with Donald Trump’s Saturday Night Live performance in either direction.

Vertical Lines: Nothing too interesting this week …

Sources: Betfair, Hypermind, PredictIt,

Apparently the Democrats had a Friday night forum where the candidates were interviewed one at time by Rachel Maddow. I have a lot of respect for Maddow, but I assume the goal of putting a debate (1) on Friday night (2) where the candidates do not interact, is to bury it. And, as I missed it (and I am political junkie) there is not much more I can say except to congratulate Debbie Wasserman Shultz, Chairwoman of the DNC, for securing an easy victory for Clinton. Now we just wait to see if that is actually a good thing for the Democratic Party.

Vertical Lines: Nothing of interest this week …

Sources: Betfair, Hypermind, PredictIt,

Fox is hosting another debate on Wednesday, November 10. With Fox hosting the debate it is going to be hard for the candidate to cry liberal bias. But, the only channel further to the right of Fox is CNBC (it started the Tea Party, Fox just jumped onto the bandwagon), so who knows!

State of election markets: 373 Days

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The Republican primary got another jolt this week with Wednesday, October 28’s debate: Marco Rubio won and Jeb Bush lost. Rubio won because he beat up Bush, and they are the only two viable establishment candidates left in the race. Rubio beat up Bush by dominating him on his prepared offensive about Rubio not doing his job as a senator (in Rubio’s defense, running for president is a full-time job and pretty much every candidate sucks at his day job while doing it; I am looking you Chris Christie). This was not about substance or policy, but about personalities and debating ability. Rubio looked more comfortable and confident, and on Friday, October 30, Rubio was rewarded with Paul Singer’s money. Singer sent a letter in which he exhorted that Rubio was the only candidate who can, “navigate this complex primary process and still be in a position to defeat” Hillary Clinton (the presumptive Democratic nominee). The only thing that matters when it comes to GOP debates, at least in the sort run, is the perception of victory among the establishment, because it brings with it the money and influence necessary to win over the fickle primary voter.

Ted Cruz and Ben Carson both had “strong debates” in that the GOP liked them, but their likelihood of winning did not shift greatly; if anything their debates will solidify the establishment’s fear of them winning the primary. First, both of them went from low probability to low probability, thus it is hard to identify the size of any movement. Second, both of them focused on red meat for the GOP base, raising even more worries about electability for the GOP establishment. Carson blatantly lied about his relationship Mannatch, a nutritional supplement company (not to mention his inability to explain the rationality of his tax plan). Both will be glossed over by the base, but they will play terribly in the general election. And, stunned over a serious of substantive (mixed in with some very frivilous) questions, Cruz attacked the liberal media (in this case the network that started the Tea Party) for asking a question about the current budget debate, where Cruz was leading the opposition to the grand compromise. Again, this is red meat for the conservatives, but leaves Cruz open to devastating general election attacks on his ability to confront critical policy questions.

Donald Trump, the polling front-runner, had a decent debate; he looked more presidential. He answered questions and did not commit any major ad hominem attacks. On one side, his policies are still generally not Republican (or much more moderate than the establishment). He is probably socially liberally, as he strains to provide socially conservative values. He explicitly does not believe in an interventionist foreign policy, but is extremely against immigration. And, his tax policies are on the more moderate end of the Republican spectrum. On the other side, the establishment is probably noting his transformation into a better politician, and the combination of his outsider status and relatively moderate positions, could make him more electable candidate than many of his rivals.

Vertical Lines: Debate on October 28

Sources: Betfair, Hypermind, PredictIt,

Nothing happened this week in the Democratic primary. With few debates and no major challengers left in the race, Hillary Clinton is comfortably 88% likely to win the Democratic nomination. Most of that uncertainty is due to the uncertainty of the health and temperament of Clinton in the many months between now and the convention, not due to uncertainty of the current state of the race or expectations of shifting sentiment. If nothing dramatic happens, she will be the nominee.

Vertical Lines: Benghazi hearing on October 22

Sources: Betfair, Hypermind, PredictIt,

A week from today marks the one year countdown to Election Day #democracy.

State of election markets: 380 Days

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Hillary Clinton followed up a strong debate with the other Democratic candidates, last week on October 13, with strong debate with the Select Committee on Benghazi, this week on October 22. Consequently, she has moved from really likely to almost certainly the Democratic nominee for president. Meanwhile, in the fight for the Republican nomination Jeb Bush downsized his payroll by 40% on October 23, but he was in a freefall starting October 17 as he struggled with questions tying him to his brother, George W. Bush. Equally important is that Donald Trump refuses to go away, increasing the probability that the Republican establishment coalesces around an establishment candidate soon; and, Marco Rubio has similar establishment positions and is now perceived to be more electable than Bush.

Clinton became the almost certain Democratic presidential nominee this week after Joe Biden dropped out of the race and she nailed the Benghazi hearings in back-to-back days.

Biden, who was not officially running, but was testing the situation for a few months, dropped out on October 21. This was a direct consequence of Clinton doing well enough in the Democratic debate on October 13, to lessen the demand for alternative establishment candidate. Subsequently, both Jim Webb and Lincoln Chafee also dropped out this week; both candidates were at a solid 0% to win the Democratic nomination.

Clinton spent 11 hours answering questions at a Congressional hearing on Benghazi; no new information was gleamed and she looked very poised and knowledgeable. While the Republicans will certainly keep Benghazi in their cache of anti-Clinton rhetoric, the utter failure of the 8th committee on the topic to learn anything useful, will probably end any mainstream reviews of the September 11, 2012 attack.

The vast majority of the remaining uncertainty should be understood as the uncertainty of the nine months that still exist between now and the official nomination on July 28, 2016 in Philadelphia. This 12% of certainly (Clinton is at 88%) is possibility of unknown scandal, illness, etc., that could disrupt her bid before it becomes final.

Vertical Lines: Democratic debate on October 13 and Benghazi hearing on October 22

Sources: Betfair, Hypermind, PredictIt,

Bush is now barely more likely to win than Trump, with Rubio soaring into the lead.

Bush is having a serious messaging issue ever since Trump forced Bush to defend his brother, George W. Bush’s, foreign policy. Regardless of how popular George W. Bush is with the Republican base, establishment money is concerned about reminding general election voters of his presidency. Further, Bush is not as media savvy as Rubio. For the establishment, Bush is increasingly dominated by Rubio: same positions, less electable.

The longer Trump refuses to go away, the more panicked the establishment gets. Currently Trump and Ben Carson combine for 52% of the polling support. If Carson and Trump still lead the polls in November, the establishment will need to start spending heavily on one establishment candidate to ensure that that one establishment candidate wins. Anything fracture in the establishment candidates can allow Trump or Carson to actually win. This is good news for the establishment candidate that is currently highest in the polls, Rubio. He would be the most likely person for the establishment to coalesce around.

Sources: Betfair, Hypermind, PredictIt,

No debates this week, but the GOP takes the stage on Wednesday, October 28. Bush is going to need to figure out by then how to answer questions about his brother, George W. Bush. Rubio is going to have to find a way to break out of the pack. Trump and Carson are going to pummel each other for the top of the anti-establishment pack.

State of election markets: 387 Days

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The biggest news this week was the Democratic debate held on Tuesday, October 13. Hillary Clinton expanded her lead in the Democratic primary both by looking strong herself and her strength dampening the spirts of Joe Biden supporters. On the Republican side Marco Rubio continued to hold tight and slightly surpass Jeb Bush at the top, while Ben Carson jockeys with Donald Trump in the second tier.

The Democratic debate did a few things at once. First, Clinton looked strong and progressive, quelling many Democratic fears that she could not step up and get the base to coalesce around her. It is hard to defend the DNC’s insistence of just four Democratic debates, with only one weekday debate, when it appears to have given so much strength to their front-runner. Second, while the likeness of a Biden run has increased over the last few days, it dipped sharply on the strength of Clinton’s performance. He may run, but likeliness of winning is no longer as compelling of reason. Third, Martin O’Malley showed himself to be viable backup. Without debates he has gotten very little attention, but he took advantage of his limited opportunity. This both makes Biden less useful, should Clinton stumble O’Malley could do fine, but it also leads to a good start for his Vice Presidential considerations.

Sources: Betfair, Hypermind, PredictIt,

There are two key storylines on the GOP side, with Rubio continuing to fight it out with Bush, and Carson almost reaching Trump. The two establishment candidates are now basically tied for the most likely GOP nominee. Rubio was a little weakened last week with poor fundraising, but he continues to match Bush’s poll numbers. Meanwhile, Bush is not gaining traction with his new advertisement buys and is burning through money. And there are rumors that Sheldon Adelson will back Rubio soon; he could eliminate any fundraising gaps personally. On the second tier (first tier if you are poll watcher!) Carson continues to gain ground on Trump. I would not be surprised to see Carson and Trump collide at about 10% likelihood to win within the next week or so. Trump is having trouble staying fresh and Carson continues to rival him in the polls.

Sources: Betfair, Hypermind, PredictIt,

No debates this week, but the GOP takes the stage on October 28. Bush is going to need to figure out by then how to answer questions about his brother, George W. Bush. Rubio is going to have to find a way to break out of the pack.

State of election markets: 394 Days

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The market was pretty calm this week with Jeb Bush continuing to hold off Marco Rubio as the most likely candidate. His polling numbers look good, but his funding is still lagging; with several month left until the first voting, a poll of money is a little more important than the poll of the people. In the lower tiers, Carly Fiorina continued to cool off a bit with a small decrease in likelihood of victory, as Donald Trump and Ben Carson refused to budge (too much). But, the most interesting market news did not occur in any market, but in polling. Gallup declared that it would run no horse race polling for the 2016 primary. Polling has officially surrendered to markets!

Sources: Betfair, Hypermind, PredictIt,

Bush and Rubio continue to provide about 60% of the total likelihood of victory with Bush holding the slightest of edges. On one hand Rubio is looking stronger than Bush in the polls with 7, 10, 8, 13, 11 in the last five polls on Huffington Post’s Pollster to Bush’s 14, 7, 7, 10, 7. But, at the same time Rubio raised just $6 million in the third quarter of 2015. This means that the establishment is not quite ready yet to open up their wallets and surge Rubio to victory.

Fiorina began fading this week from 8 or 9 to 6% likelihood of winning the nomination. There was speculation that she could surge up into a Donald Trump vacuum or take non-establishment support from Ben Carson. But, reports of Trump’s demise were premature and Carson has held steady as well (and is fundraising like crazy). This puts Fiorina in a difficult spot somewhere between an insurgent non-establishment candidate and an establishment candidate. She needs to find that niche soon to get into the hunt to win the nomination.

In 1936 George Gallup famously launched the best known survey research firm in the world by accurately predicting the presidential election; in 2015 Frank Newport announced that Gallup will not produce polling for the 2016 primary. Newport cited a desire to focus on polling the electorate on issues, which is great; affecting issues is why we have elections. But that is not the reason they would drop horse race polling; horse race polling is an advertisement for a multi-million dollar survey research company. Elections are the only major polling domain where we have something that resembles a ground truth (with the obvious caveats of changes over time). Gallup correctly realizes that “probability” polling is likely to do even worse in the next few elections and Gallup does not want to destroy its reputation with any pending disasters (i.e., Gallup does not want to pay for its own negative advertisement). It is probably a good public relations move for Gallup, but it bodes very poorly for traditional survey research if Gallup no longer wants to stand up and be tested.

If you want some objective data on the 2016 primary I have a suggestion that is not hiding away from the difficult: prediction markets.

The Democrats will host a debate on Tuesday, October 13. Better late than never?

Sources: Betfair, Hypermind, PredictIt,