Saturday, May 14, 2011

Who is Jon Huntsman? Intrade Revisited

In two previous posts, we examined Intrade, the "investment" site where people can place bets on political events. As we saw, Intrade is not very good at predicting election outcomes long in advance, but is a good indicator of the conventional wisdom according to the Washington establishment (particularly liberals). From time to time, we will revisit Intrade to see what its investors think about the Republican primary. Intrade's page on the Republican primary may be found here.

Several of the leading candidates are in the same position as they were the last time we checked Intrade. Romney remains in the lead with 25%, Pawlenty is second with 16.5%, and Daniels has 11.7%.

There are some interesting changes, too. Jon Huntsman, Jr. has risen from nowhere up to 12%, putting him in third place. One might be tempted to ask, "Who is Jon Huntsman, and what did he do lately?" Huntsman is the former governor of Utah and was, until recently, the U.S. Ambassador to China under Obama. Huntsman is not even included in the Elephant Watcher roster of candidates. If and when he forms a presidential exploratory committee or announces a run, he will be promptly analyzed and ranked by Elephant Watcher.

There are two potential explanations for Huntsman's sudden appearance. First, the Washington establishment has become aware that Huntsman is definitely planning a run for the presidency. But why is he ranked so high, when he never appears in the polls? Huntsman has not yet received a full assessment by Elephant Watcher; for now it is enough to say that he faces an uphill battle to win the nomination. The answer is simple: Huntsman has the approval of the Washington establishment. Some of his more moderate-to-liberal positions may also appeal to the Intrade investors, who tend to be more liberal.

The second potential explanation is that some of Huntsman's supporters may be placing bets on Huntsman to manipulate the market for publicity's sake. It is an unconventional approach, but it is not unheard of: The volume of trading is low enough that a candidate (or his fans) could bump up his numbers if so inclined.

Trump's numbers on Intrade, unsurprisingly, have crashed. He was at 8.5% and is now down below 4%. All of the recent bad news has taken its toll on Trump.

Meanwhile, Cain's appearance at the May 5th primary debate earned him some attention. He is still at only 3.9%, but he was at close to 0% before the debate.

As for Huckabee, his numbers have cratered. Intrade gives him 3%, down from his high of nearly 10%. This crash took place shortly after the news broke that Huckabee would announce his decision whether to run. Conventional wisdom rules Intrade: Obviously most investors took the news as a sign Huckabee is not running.