Thursday, August 9, 2012

Intrade: Obama Up, Portman Up

Barack Obama has improved slightly on his lead in the Intrade market on the 2012 race since our last review in mid-July. The market gives Obama a 58.8% chance of victory, with Mitt Romney at 41%, for a margin of 17.8 points. Once more, we can see the Intrade market is strongly correlated with the RealClearPolitics average of national polls.

As was the case in our last review, the RCP average gave the Intrade market an odd result, due to the quirks of RCP's methodology. Because RCP puts a big emphasis on using multiple pollsters, as opposed to multiple polls, it is forced to use older polls. For example, as of this writing, the RCP average includes a CBS/NYT poll that ran from July 11th to 16th; some of that data is nearly a month old. Other polls have data from as much as three weeks ago.

In mid-July, Romney was doing worse in the then-current polls, but was doing better on Intrade, because the RCP average at the time didn't have a chance to catch up. By contrast, the Elephant Watcher average of polls puts a greater emphasis on current polling data, even if this means using multiple polls by Gallup and Rasmussen, which are the only firms polling with frequency. Remember, polls are intended to be a "snapshot" of the race as it stands today, not how it stands partly today and partly a month ago.

Meanwhile, as the announcement day approaches, the Intrade market on Romney's VP remains split. But Rob Portman has improved on his lead, to 34.9%. Tim Pawlenty is in second at 20%, while Paul Ryan has jumped to 14.6% and Marco Rubio is stuck at 12%. A lower-tier of potential veeps is clustered in mid-single-digits: John Thune at 5.2% and Bob McDonnell, Chris Christie, and Bobby Jindal all at about 4%.

It's curious: Rob Portman is known to have a key weakness in his ties to the George W. Bush administration, and there has been little in the way of "buzz" or trial balloons about him in the media. Yet Portman is consistently at the top of the Intrade VP market. It could be a case of wishful thinking on the part of liberal investors who see Portman as an easy target. But the consistency of Portman's lead must make one wonder whether there is something to it.