The political landscape of the past two months has been chaotic, to say the least. Separating the signal from the noise would be a difficult enough task in a world where media coverage was unbiased, and in the media landscape we actually inhabit, it can be nearly impossible. But there are better and worse sources for filtering out the noise.
The likes of Chris Cuomo and Sean Hannity suffer no ill-consequences for their failures of political analysis, but those who put money on the line do. If you believe that people will think more carefully about their predictions if failure entails losing money, than you should be paying more attention to markets than to pundits.
We’ll start with the most pressing story, the Trump-Ukraine-Biden saga (if saga is an appropriate word to describe such a bland and uninspired political episode).
As of October 3rd, PredictIt is implying that President Trump has a 69% chance of being impeached; two months ago, he was at 29%. Rightly or wrongly, the Ukraine controversy has dramatically increased the probability that Trump will suffer impeachment.
However, the bettors still think Trump will likely finish out his first term. On PredictIt, he still has a 70% chance of making it to January, 2021– down from 83% prior to the Ukraine revelations. While impeachment may dominate politics, and in turn our lives, for the next year and a half, those with money on the line are not convinced that Trump’s presidency will end prematurely.
Next up is the Democratic nomination, the geography of which has developed greatly in a very short time. Warren is now considered more likely to win the nomination than any other candidate in this cycle has ever been, despite not having any of the typical inciting incidents – memorable debate moments, endorsements from major figures – you would expect to precede such a meteoric rise.
Here are the latest numbers on PredictIt for the Democratic nomination:
Two months ago, Biden was at the top of the list at 29% and fighting for his political life with Kamala Harris. Warren was sitting at 24% and considered a candidate with a lot of long-term potential but lacked the excitement characteristic of the likes of Harris and Buttigieg. Now the base-line assumption is that Warren will be the nominee.
It should go without saying that all of this is extremely premature, and anybody who tells you they know for sure who’s going to win the nomination four months before any votes are cast is trying to sell you something, but at least in the case of political futures markets, you actually lose money if you buy it at the wrong price.