Friday, September 23, 2011

Rick Perry's Intrade Odds Crumble

In the wake of the third September primary debate last night, Rick Perry's odds on the Intrade market for the 2012 Republican nomination have taken a dive. This marks the third time that debates have resulted in Perry losing ground on Intrade. Meanwhile, for every point Perry has gone down, Mitt Romney has gone up.

Romney's Intrade odds have risen to 43.9%. Perry's numbers are down to 26.9%. This change represents a far more radical shift on the Intrade market than occurred after any of the other debates. Apparently the investors believe in the rule of "three strikes and you're out."

To put this into its proper context, Perry was leading Romney by about 10 points prior to the September debates, 40% to 30%. After the three debates, Romney leads Perry by 17 points. That's a 27-point shift. It's particularly remarkable considering Perry still leads in all of the national primary polls. That being said, there have unfortunately been very few polls (especially state polls) released this month. But it's clear where Intrade thinks this race is going, and the investors want to get ahead of the polls.

The rest of the candidates are in the single digits. Intrade has an especially dim view of Michele Bachmann these days: She's down to 1.8%. During the summer, when she was leading in Iowa polls, Bachmann had gotten as high as 18%. In other words, Bachmann has lost nine-tenths of her market value.

As for the state primary markets, Intrade has not changed much. The investors still believe Perry will win Iowa and South Carolina, while Romney will win New Hampshire. Judging by the overall odds, they simply believe Romney has the staying power needed to win the nomination. They haven't been impressed by Perry's debate performances. Unless the race is knocked off its present course, Romney will reclaim his status as frontrunner.