LA Times poll numbers for Kerry/Bush

In a head-to-head, Kerry beats Bush 55 to 44.

With Nader in the mix, Kerry beats Bush 52 to 42 and Nader has 4. How can Nader cannibalize points from Bush?

Oh, and 60% of Americans polled weren’t happy with the direction America was going.

It’s still amazing to me how many supporters Dubya and gang have. It must be mass insanity.

last night at dinner i heard a brief diatribe about how clinton was the Worst President Evar. no one mentioned Bush at all.

i’m pretty sure the “at least he’s not a democrat” logic is going to hold true for an awful lot of dyed-in-the-wool conservatives.

Sadly, there are plenty of Democrats with the same line of thinking about any Republican. The polarity our two party system has caused is ridiculous. I’m not sure it had to turn out this way, but the way it has turned out - with people identifying themselves in xenophobic political tribes, not giving a shit about anything but “at least he’s one of us,” is ruining this country, along with the abandonment of media responsibility to educate and inform the citizenry, and a lack of even basic concern for the direction the country is going among said citizenry. The ship of state is sinking.

Amen.

Bravo. Very well said.

I’m not sure if you can blame the party or 24-7 media, where conflict=ratings.

I’ll have more to say on this when I finish Brock’s new book. It’s eye-opening.

i dunno. bush’s stock price versus kerry’s is still freaking rock solid. i don’t get how he never even breaks even with kerry even with the worst news.

http://128.255.244.60/graphs/graph_Pres04_VS.cfm
http://128.255.244.60/quotes/66.html

Probably because the IEM has the predictive power of a hubcap on the side of the road.

Looooook into the rims!

Different methodolgies. Polls ask “If the election were held today, how will you vote?” The IEM asks “When the election is held, how will everyone vote?” The way to read a stable market given unstable polls is that the investors feel the instability will eventually stabilize.

As far as hubcaps go, it’s a pretty reliable one.

The market outperformed polls in 9 of 15 cases according to both measures (election eve closing prices and last week average prices). Across all elections, the average poll error was 1.93% while the average market error was 1.49% and 1.58% by the two measures. In a few cases (the 1988 and 1992 U.S. Presidential elections) the market dramatically outperformed polls. The worst outcome, the 1996 U.S. Presidential election, is a peculiar one that gets additional attention below. In the majority of other cases, the market does about as well as the average poll, sometimes worse but often better, even if by a small margin.

Election eve outcomes are to some extent less interesting than predictions over the full course of the campaign. We notice a general tendency for the market to be both closer to eventual election outcomes and more stable than polls over the course of election campaigns.

The 1996 U.S. Presidential was skewed in the final days because of a large influx of new traders. Despite the skew of the election eve close, the market over the week before the election was still more accurate than the polls.

First, national polls are meaningless. The election will be decided in 11 states. Only polls that survey those 11 states matter.

Second, polarity between the parties is good, if a ridiculous statement. There have been complaints for years about how the two parties are virtually identical. This has led to voter apathy (at least, that is the argument.) If the country truly is as polarized as the currnet conventional wisdom holds, the voting participation should increase significantly this year.

The parties are VERY similar. Certain political factions on both sides get worked up about abortion, stem cell research, Iraq, etc. But in the end, there are members of both parties that cross those lines. Bush cut taxes like a good Republican, but he passed a massive Medicare drug expansion that makes Hillary smile. A Kerry administration would have cut taxes less (if at all) but he would have been stymied completely on any Medicare expansion. Neither candidate is calling for radical reform of anything. They are both just tweaking.

Daniel over at crookedtimber.org has this jihad going against the IEM that’s far too complicated to go into. Suffice to say that he thinks it’s a lagging indicator.

Of course they’re a lagging indicator, investors have to have some time to determine whether an event has legs or not. As for Daniel’s “jihad”, it doesn’t seem to be as damning as you claim.

In particular, John and myself have defended the view that these markets do not appear to offer marginal information above and beyond published opinion polls.

This doesn’t sound like “the IEM has the predictive power of a hubcap on the side of the road” to me.

Even when he does let loose, it’s largely off-base. His rant on the non-prediction of Dean’s Iowa collapse is way off:

Can we no longer hear about the “predictive power” of the Iowa Electronic Markets, please? They were bamboozled to exactly the same degree as the rest of us.

(UPDATE): A couple of people in comments have pointed out that this market is for the nomination, not the Iowa Caucus itself. Fair point, but sadly, no. Either the Iowa Caucus is an important determinant of who gets the nomination, or it isn’t.

First off, as he notes, everyone was caught off-guard by Dean’s free fall, not only in how poorly he’d do in Iowa, but also how badly he would recover. Even after he became the butt of jokes, Dean was still considered a front-runner, although no longer the only one. Secondly, the market is for the nomination, not the Iowa Caucus, and it made no claims as to how Dean would do in any one primary or caucus, even one in the home state of the market. While the caucus was an important determinant of get the nomination, it isn’t the only one, and and even with a poor showing in Iowa, Dean still could have captured the nomination, so Dean’s stability before the caucus is not totally without merit. Once Dean became the butt of everybody’s jokes, however, it was clear that he wasn’t going anywhere, thus the freefall after the caucus.

Then his IEM quiz is just bizarre (SPOILER ahoy! Skip if you intend to take the quiz yourself):

1. In the 1996 Presidential vote-share market, what should the sum of the values of the VS_CLINT (Clinton vote share) plus VS_DOLE (Dole vote share) contracts be?

…{snip wrong answers}…

The correct answer is 1.00 minus the time value of money. Because you have to pay your money upfront to receive the return after the election, a portfolio of 1 Dole plus 1 Clinton should sell at a discount to face value reflecting that fact.

Well, yeah, duh. The IEM isn’t intended to be some super investment scheme. Counting the time value of money against returns is like counting your internet connection bill against returns. It’s the cost to play. The bottom line is if you spent $2 for 1 Clinton contract and 1 Dole contract and held them to maturity, you would have gotten your $2 back.

2. What percentage return would you have made in the 2000 winner-takes-all market by buying the BUSH contract at the point when GORE was at its peak and holding to maturity?

You would have lost all your money.

Not surprising as the market is winner-take-all, based on popular vote, as noted in the prospectus. What’s his point?

3. You hold a porfolio in the current 2004 Presidential vote-share market long BU|KERR but short BU|CLINT. If George Bush were to announce tomorrow that he had decided to withdraw from the race, what would be your profit or loss?

You would neither win nor lose anything. BU is simply an identifier meaning “the Republican candidate”.

…as noted in the prospectus. What’s his point?

Hey, it’s his argument, not mine. But it sure looks like “the IEM is no more predictive than the average of all polls” is accurate.

So are you saying that the average of all polls “has the predictive power of a hubcap on the side of the road?” Or are you changing your opinion?

[size=2]Edit: Just so I’m clear, I don’t think changing your opinion is necessarily a bad thing.[/size]

If IEM is no more predictive than averaging public available polls, what information is it providing?

At worst, it’s another data point by which to evaluate a complex data set. At best, realizing that the IEM has historically been better than the average of all polls 60% of the time, you can use that data to help evaluate the situation when the polling data shows instability but the IEM remains relatively stable.

Except that it hasn’t. One obvious hypothetical is that people are taking the polls and just buying based on that. Seriously, what mechanism would allow the market to predict the election?