HOMEBLOGSOne Week to go... and the Game is already Over!
26 October 2008

One Week to go... and the Game is already Over!

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The markets are speaking loud and clear: the next president of the United States will be a colored man (black color to be more precise)
Notice the magnitude: the markets gives Obama a probability above 85% (and this is true both for the Intrade market (from Ireland) and the Iowa Market!!!
I know the markets have been crazy lately, but I doubt that are so crazy that they get this one wrong.
Hence, game is over.

By the way, notice that Obama's chance take off as a result of the financial crisis. McCain had cut the lead after getting Sarah Palin as the VP nominee, but the gain quickly disapperared during the week of the Lehman Brothers debacle. The financial crisis did a lot of harm to the republicans because (a) people traditionally vote against the incumbent party when the election is in the middle of a recession and (b) the recession brought George W. Bush back in the news, and that is something that hurt McCain who had been trying to distance himself from the unpopular current president.

Note: as a benchmark comparison, I also attach the probabilities for the 2000 and 2004 elections. Notice that the markets got tem both right (markets got George Bush both times) even though both elections ended up being very close (do not look at the probabilities in the last minute of election day, because then the probabilities jump to 1 -obviously- although in the 2000 election, they jumped to 1... for Gore -remember that at the end of election day, it looked like Gore had won, and then there was uncertainty for a few weeks, until the Supreme Court got things straight and did not allow Al Gore's attempts to steal the election through selective recounts only in the Florida counties that traditionally vote democrat).

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INTRODUCTORY NOTE

Starting January 30, 2012, I decided to put the random (economic) thoughts that I was posting on Facebook, in a blog. In this site you will be able to read all Facebook notes going back to 2008, (without my Friend’s comments, unfortunately), but we will only maintain the new thoughts. If you want to check out the old comments, they are still posted on Facebook. If you want to comment on them, you have two options (1) Become a Facebook Subscriber. Since all the posts will also appear in Facebook, you will be able to comment there. (2) Comment on Twitter, as each post will also be announced in Twitter.

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