THE SPECULATING community moved sharply in Senator McCain's direction today.
Real Clear Politics publishes a chart called "Intrade Market Odds" for the McCain/Obama presidential contest.
Intrade is an online company that sells futures contracts (for real money) on a various propositions, among them the outcome of the U.S. presidential election. (You can read more about prediction markets here.)
For weeks the price for a contract on Senator Obama has been about $65, while you could load up on Senator McCain for just over $30. (The difference reflected Intrade's fee for hosting the "market.")
Today the price for a contract on Senator Obama dipped sharply (to $59.70 as I write) and Senator McCain rose (to $37.50).
So is it legal to wager this way on the presidential race?
Not really, but Intrade is based in Dublin, Ireland, and thumbs its nose at U.S. legalities. Still, don't think of buying Intrade contracts through your IRA. In fact, don't buy them at all.
How accurate is Intrade? Well, like most other prognosticators and systems, it once ranked Senator Clinton over Senator Obama.
Still, to the extent it matters, folks who put their money where their mouths are are today putting more money on Senator McCain.
Speculators may have had second thoughts about Senator Obama's inevitability when his world tour failed to produce a poll bounce.
One month ago, Mr. Obama's lead in national polls was about seven points. Today, according to RCPs poll of the polls, it's 2.6 points.
Equally dramatic is the recent plunge in the percentage of poll respondents who view Mr. Obama favorably. It was once above 28 percent. Today it's below 22.
The speculators may also be reacting to Senator Obama's decision to harden his position yesterday against the widely supported policy of more offshore drilling, which is more likely to drive away middle-of-the-road supporters than to attract them.
Or maybe the speculators just read "Obama is toast."
UPDATE: Thanks to the Houston Chronicle Web site for the link.
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