I assume that this has to be the low point of the Romney Presidential campaign. At least I can’t envision very many things that can go wrong that haven’t since Hurricane Isaac. First, the Republican convention was expected to produce a bump, but after the first day was cancelled because of the storm, the rest of it became compressed into caricature. Then came the Democratic convention, where the combination of Michelle Obama and Clinton gave speeches that increased Democrats’ enthusiasm.
Then came the Libya/Egypt situation where Mitt clumsily tried to make a political point while our embassies were under stress. Parenthetically, just imagine how differently the political campaign would look now if Romney would have said regardless of our political differences, it is important for these murderers to know that we all stand together as one.
Now this newest contretemps of the videotape. My guess is that Democrats and the media will hammer endlessly at each of the demographic groups included in the 47%, the elderly, unemployed, disabled, etc. I actually believe the part of the video that will have the worst repercussion will be the joke about Mexican parents. So, like I said at the beginning of this piece, I’m assuming that this is the lowest point that the Romney campaign. Let’s look at the odds on both Intrade and IEM this morning. We’ll review it soon to see how they’re changing over the next 7 weeks.
Intrade currently has a price of 67.4% for Obama and 32.6% for Romney. According to a formula that I’ve devised, and which proved accurate in 2008, this implies that Obama, according to the website, is expected to win 54.1% of the two-party vote.
As discussed here earlier, Iowa Electronic Markets (IEM) is a real-life marketplace where people can place bets on a number of things, both political and economic. The interesting thing about the site is that the results bear an uncanny resemblance to the results on Election Day, as we get close to the November election. IEM has two different markets: a winner-take-all one like on Intrade and one where, in effect, the bettor tried to project the popular vote percentage each candidate will get. The latter market is similar to a stock purchase. You can buy or sell at any point prior to the election; after Election Day, each owner gets back the actual percentage back, regardless of what they paid.
For example, say there is a random guy called Andy. He buys 100 shares of Romney at today’s price, which is $.471. Then, on Election Day, Romney gets 50.1% of the popular vote. So Andy would wallow in his big buck windfall of $3.
Currently, the winner-take-all IEM market has a price of $.733 for Obama. Once again, using my handy-dandy system, this works out to the President getting 54.8% of the two-party vote in November. In the other IEM Presidential election market, Obama currently has a price of $.541. In this market, if Romney wins, people who bought Obama shares would lose everything.
As I wrote earlier, I think these numbers will be Obama’s high water mark. Each Tuesday, for the next 6 weeks, I hope to update these so we can either applaud my wisdom, or laugh at my naivete.