I’ve gotten some by text or email - which I’m more likely to respond to than a call out of the blue , assuming I’m inclined and able to check if it’s legit. Which still means I don’t usually respond.
The election is guaranteed to “come down to a handful of [swing] states….” and both parties know it. Hillary lost in 2016 in part because she took some of them for granted.
Ooh, that gives me a great fantasy. I want Trump to completely direct his campaign strategy, surround himself with yes men, and become obsessed with winning all the big states, including California and New York, because it feeds his ego. Ohio’s size and EV count are pittances! And Dayton is boring!
Since the NY judgment, Trump has drifted slightly to 43%.
Biden has shortened to 29%, back to where he was before the most recent press about his age.
Obama is still stubbornly there as clear third favorite at 7%, well ahead of outsiders Newsom, Harris, Haley, Kennedy.
This money backing Obama has persisted for long enough that I can’t help but feel maybe somebody knows something, that although she’s been pretty clear that she doesn’t ever want to run maybe she really has given some kind of private hint that if Biden were to withdraw for health reasons she might consider stepping up as the best chance to keep Trump out. The only other explanation I can come up with is that right wing money is spoofing the market to promote their completely fabricated story that she will run, to undermine Biden. But there’s enough smart money out there that it’s difficult to spoof markets like this for long. I suppose the spoof could be sustained by people (like me) not yet having sufficient certainty that it’s bullshit to lay the bet.
It’s not exactly spoofing. The is a tendency for partisans to be optimistic about their side’s chances, and to believe narratives spread by their side, such as about Michelle Obama running. I believe that the average pollster is more objective than the average gambler, and so look to polling averages.
Maybe the average gambler, but not the average dollar gambled. There is a lot of smart money out there that will dispassionately take the other side of any bet anywhere that there is a significant statistical edge.
High transaction costs for everyone, and low betting limits for Americans, discourage a lot of that smart money. How efficient would stock markers be if participants from the country a company is located in could only buy a total of $850, while less informed foreign investors could buy much more?
Also, unlike with sports betting, the gambler can be materially affected by the election result over and above the possibility of winning the bet. So, not being a gambler at heart, if I thought Trump would cost me money if he won, I could hedge by betting he will win the election. Hedging thus could be causing a pro-Trump betting bias.
I do have a problem believing Trump is so far ahead as the betting markets say. Conceivably, I am playing the ump there, something I have accused other posters of in the past. But it could also be that political markets are inefficient.
If most of the betting interest is foreign, I don’t see how that supports the idea that dumb money is backing Obama with insufficient smart money to lay her. I think foreign money would tend to be more dispassionate and focused on true probabilities.
That I agree with as a possibility regarding Trump. But I can’t see how anything along these lines explains how short Obama is, other than Barack betting heavily on her winning to try to offset the fact that in the unlikely event she becomes President he’d be so pissed to have to spend another 4-8 years in the White House dealing with fucking politics to support her effort to save the nation.
So this is 100% a quirk of the betting market and not a serious statement there is a 1 in 15 chance of Michelle Obama winning the 2024 election.
Exactly what that quirk is IDK. I assume it’s to do with the number of betting on a very unlikely thing. Maybe a risk thing? If there is an unlikely event X, that the betting company has evaluated as say 1:100000 but thousands of people have decided it’s worth a punt on. It could be that people are stupid but it could be the company has screwed up and the event is more likely than they think. In the latter case they could have just bankrupted themselves if event X happens. They don’t lose much by bumping up the odds once people start betting on it, just to reduce the risk of being wrong.
This is a betting exchange, a two-way market. It is not just a bookie protecting themselves by shortening the price on an outsider. I could go in there right now and lay the bet at an implied probability of around 7%.
That’s the issue. There is a lot of smart money out there constantly scrutinizing markets for an edge. If it is really so certain that this is complete bullshit it’s surprising that such a big market distortion has persisted for so long. Absent any good explanation, at some point you do have to wonder if there is some information in the price.
The one thing that you can be sure takes you out of any information bubble is financial markets where money is at stake.
I have been out of the UK for a long time, so I’m no longer actively involved in any betting markets, and one thing I’m not too sure about is the technical issue of how much capital you have to commit to bets through the various betting mechanisms. Essentially, the margin requirement. I’m starting to suspect that this might be part of the explanation.
If the only way to lay the bet is to put up 100% of the potential payout in cash, with interest rates around 5% that’s costing you 4% for such a long term bet (until November). If the true probability of Obama becoming president is 1%, then laying her at an implied probability of 7% is not a 6% expected return. It’s 6% minus 4%, with a lot of capital tied up.
If that’s the case, it’s going to make the market very much less efficient.
Oh in that case there is no mystery. The crowd is not in fact that wise. The fact there are plenty of people willing to bet on something that is vanishingly unlikely because they want it to be true is not that surprising.
If you can seriously get a 7% return if Michelle Obama doesn’t win the election in November that is easy money.
Just to make sure I understand this: if I have, say, a hundred thousand dollars to spare, and I choose to bet every penny of it today on the proposition that Michelle Obama won’t get elected president of the United States in November, then exactly how much money would I make if things play out as expected?
You’re contradicting yourself here. If it’s really so obvious that the 7% return is such easy money, then the crowd doesn’t need to be especially wise.
7%.
But what I’m uncertain about is the technical matter of whether at present the only way to make this bet for most smart money is to put up 100% in non-interest-bearing cash. If that’s the case, it makes a huge difference, because the risk-free rate of return over 9 months is around 4%, so 7% would represent an excess return of only 3%. If you could post interest-bearing securities as collateral against the potential payout of the bet, then you’d be getting an excess return of 7%.
Asking for only a 1400%* return if Michelle Obama wins the election (which she has not entered and AFAIK missed the deadline to be on any primary) is not very wise.
Taking a 7% return if Michelle Obama doesn’t win is the easiest of the easy money. I mean the chances of the company running the market going bust and you loosing your money that way is more likely than actually losing the bet. To get a 7% return in 9 months would require a much higher risk in a regular investment.
* - if my maths is right (1/0.07 x 100). Regardless you could add a zero at least and it still be a bad bet
Exactly. SO WHY ARE PEOPLE DOING IT.
Because people are dumb!
I’ve just put £1000 on anyone except Obama at Betfair to win £75. I’ll probably cash out well before November when the price finally goes up.
Ok, let me try to explain more clearly where I’m coming from.
You can make a lot of money betting against incorrect implied probabilities in the betting markets and financial markets. That was my first career, in fact, before I did something more useful. But the way to the poor house is to look at an implied probability that appears to be so wrong, and just blithely say “the explanation is that everyone else in the world is stupid”.
There is a lot of dumb money out there, or shall we say “price-insensitive” money. But there is also a lot of very smart money out there, and the usual state of affairs is that there is enough dispassionate smart money that implied probabilities don’t get too far out of whack with rational expectations.
If you see an implied probability that seems so badly wrong, you need to understand why it is that in this particular situation there is so much dumb money distorting the price and why other smart money is shying away from taking the other side. If you cannot explain that, you may be missing something in your estimate of the true probability - or indeed some technical aspect of the market.
I’ll happily stake a lot of money against price-insensitive dumb money, but only when I’m sure I completely understand the situation and why the opportunity is there. I’m fairly sure now (Betfair’s terms don’t appear to have changed) that the reason here is simply that to lay this bet is costing interest on cash you have to put up for 9 months. I’d tie up cash on this for 9 months for a 7% excess return, but not for a 3% excess return.