The Iowa Electronics Market

[quaoar]

I had never heard of this until I read about it on Salon. It's a market where you can actually buy shares of Kerry or Bush the way you'd buy wheat or pork bellies on the commodities exchange.

So far, traders are favoring Bush over Kerry. Supposedly, this market has an uncanny knack form predicting presidential elections.

http://www.biz.uiowa.edu/iem/

[Mad As Hell]

1. We're ahead in the Iowa Market.

Just looked at it. I haven't seen that before! Am I reading it wrong?
I think we're ahead.

[quaoar]

2. I don't know

It's new to me.

But here's the Salon story about it:

http://www.salon.com/tech/feature/2004/08/16/iem2/index.html

Two weeks after John Kerry's big speech, the Massachusetts senator appears, by all standard political indices, to be doing very well in his bid for the White House. Polls put him anywhere from 1 to 7 points ahead of the president in a head-to-head matchup. State-by-state surveys show Kerry holding a lead in the Electoral College count. And professional handicappers also seem to approve; as ABC's politics newsletter, the Note, put it on Wednesday, "the reality is -- as amazing as this seems -- this is now John Kerry's contest to lose."

But traders on the Iowa Electronic Markets -- a real-money futures-trading system celebrated for its accuracy in predicting presidential election winners -- aren't buying it. Or, more specifically, traders aren't buying shares of John Kerry futures and are instead favoring shares that will yield a payoff if George Bush wins the race in November. After reaching a peak of about 51 cents a couple of days before Kerry's speech, the price of Kerry futures on the market has steadily fallen in the past couple of weeks -- sinking to as low as 47 cents on Aug. 4, and coming to rest at their current price of about 49 cents. Bush, meanwhile, soared after Kerry's speech. The president's shares reached almost 53 cents on Aug. 3 and are now just above 50 cents. (Kerry's share price was rising on Friday morning, and he could conceivably catch up to Bush over the weekend.)

[AndyTiedye]

5. Kerry's A Hair Ahead In "Winner-Takes-All", But Behind in "Vote Share"

They sell two different kinds of futures.
Both are based on the total popular vote,
not the electoral college.

"Vote Share" pays off your candidate's percentage of the popular vote.

"Winner Take All" Pays off 100 if your candidate wins the popular vote,
and nothing otherwise. (If this had existed in 2000, the Gore futures
would have paid off, because Gore won the popular vote).

For some, it is an interesting form of legalized gambling.

There are others who are buying Bush* futures as insurance against
a Bush* win. They intend to use the proceeds to help pay their
overseas relocation costs if Bush* does win the election. That is a
risky strategy due to the possibility that Kerry will win the popular
vote but, as with Gore in 2000, somehow be denied the Presidency.

[AP]

3. It got the primaries WAY wrong. It indicated a Dean victory.

[emulatorloo]

7. Wouldn't people who mess w this Play-Stock_Market be Repugs?

and wasn't the conventional repug wisdom that Dean would be easy for "Make The Tax Cuts Permanent" Bush to beat?

[AndyTiedye]

4. and Diebold was UP .34 today

[emulatorloo]

6. Who Gives a damn what Top 1% Wannabes Say in Their Play Stock-Market?

I am sure it is fun for the biz majors/frat boys and entrepreneur wannabes to buy shares in their Bush Boy. . .after all, these folks aspire to be in that top 1%, and dammit, they want their tax cut to be permanent.