Wha’ happa’?

When I left Manchester NH this morning, Obama’s re-election was trading at 69 cents on the dollar at InTrade, near its life-of-contract high the day Osama bought his farm. When I landed in DC, it was up to 72 cents. That’s a very big one-day jump, suggesting that something just happend to move the needle.

But when I check TPM and Memeorandum, I don’t see a triggering event. Yes, there’s another good poll out, but Gallup tracking continues to trend in the wrong direction.

All I can see that looks game-changing are the NYT and Politico and AP stories suggesting that Romney might have lost his cash edge. (And of course the worse his odds get, the less money he can raise.)

Did I miss something, or did the InTrade bettors just suddenly decide to catch up with Nate Silver, or believe Silver’s analysis that landline-only polls are understating Obama’s edge? ‘Tis a puzzlement.

Footnote The NYT story is fascinating in its suggestion that Romney’s cash advantage might have been largely mythical all along. Paradoxically, both campaigns might have found it advantageous to tell the story that way, with Obama hoping to scare money out of his small-money donors and Romney wanting to convince his big-money donors that influence with him would be worth buying.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com

11 thoughts on “Wha’ happa’?”

    1. For lying purposes…
      R-Money inflated his taxes…

      So the net effect is he will be spending more time lying about lying about his lying…

      Man.
      I can’t wait for the dust bin of history to sweep this skanky rich boy off the stage.

  1. This whole brouhaha about the “rate” Romney paid is total bullshit.

    The “rate” cited by Romney, and by PWC, is presumably the ratio of the tax paid to the Adjusted Gross Income. HELLLLLOOOO!!! When you’re very rich, and you hold a lot of investments, you may have huge growth in your assets that are not “realized” and are therefore not part of your AGI. If you have any sense at all you get your pocket money by selling some underperforming assets and you hold onto the ones that are going up.

    So your AGI is very small (perhaps even ZERO or NEGATIVE) compared to your growth in net worth. And all this talk about the “rate” of his taxes is just talk, meaningless to anybody who understands tax strategies for the rich.

    1. Ken Rhodes, I get your point, but think it’s more likely they’re using net taxable income after deductions and exemptions, which yields the lowest income figure and hence the biggest percentage paid in taxes. They also talk about the percentage he paid out in charitable contributions, but as Josh Marshall pointed out, they deferred a lot of that deduction to next year; it has the (hmm, incidental?) effect of raising the percent he’s paying in income taxes if that’s based on net taxable income. What income base they’re using to state the percentage of his income that went to charitable spending is unknown. A lot of screwing around however it was done, and he still ends up paying a considerably lower rate in income taxes– not including payroll– than I’ve been paying, for one.

  2. Thanks for flaggin the NY Times article Mark. The piece strongly implied that Romney’s campaign was being more-or-less deceptive in their reporting of contributions. I can understand Obama’s campaign not caring or using it in a way to their advantage, but why didn’t anyone in the press core call bs on Romney’s numbers sooner? I know they are not like reporting earnings of a public company, but still…

  3. I also noted the jump in the Intrade price. It may have just been a market correction, since, before the Intrade jump, the Iowa market price was significantly higher. Now, the two markets are roughly in synch.

    That being said, the state numbers, particularly in swing states such as Ohio and Virginia, are all moving strongly in the President’s favor. Since most poll watchers had given Obama 243+ EVs for certain (that is, without Florida, Ohio, and Virginia), these numbers lead to the conclusion that his re-election is very likely notwithstanding the closeness of the national polls.

  4. putting my tinfoil hat on, I have an Intrade odds guess. way back when the Intrade Obama odds were 60% the implied probability of an Obama victory was significantly higher at Betfair and Ladbrooks. There was an arbitrage opportunity (says Richard Thaler who should know). I had a guess that someone was manipulating the Intrade odds. It wouldn’t take much money (and the expected cost of manipulating odds is second order ). Intrade gets much more attention than other markets. All operatives agree that polls which would be good for a candidate if true helps the candidate. Why wouldn’t some of Romney’s super rich maxed out supporters bet on Romney at Intrade (but not on sites which aren’t reported all over) ?

    The spike might be some market manipulator giving up.

    Paranoid ? Sure. But just because I’m paranoid doesn’t mean that some market manipulator has decided to cut his losses.

  5. I’m slightly embarrassed to talk like a chartist, but it looks like capitulation at 67% (i.e., 2-to-1).

  6. As Robert said, InTrade is a strange market. It gets so much attention, that there’s incentive to game it a little. There’s much better odds on Romney at basically every other market in the world. The InTrade numbers move exactly as much as someone is willing to put up the time, money and regulative compliance work to sell Romney on InTrade, and cover by buying the same bets on other markets.

    I’m pretty sure the downward spike you noticed was all from one Romney seller putting up I think around $150K, and I’d bet good money that they were not taking any risks and had covered that bet at some other location.

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