Republicans Really Were Gaming Intrade

How to Steal an ElectionWe are coming up on the one year anniversary of the last presidential election and so we are at least getting a bit of clarity on some of the political shenanigans that took place during that consequential event. Earlier this month, two researches Rajiv Sethi and David Rothschild presented a paper that looks at a very strange bit of electioneering, Trading Strategies and Market Microstructure: Evidence from a Prediction Market. It has to do with the use of the political betting market Intrade to push the narrative, that counter to all available data, Mitt Romney was actually doing really well in his race against President Obama.

I wrote about this at the time, Republicans Gaming Intrade. About two weeks before the election, all the polling outfits and gaming markets gave Obama at least a 65% chance of winning re-election. But Intrade was and had been an outlier. It gave Obama only a 55% chance of winning. As I wrote at the time, Intrade got more coverage than any other “predictive” source other than Nate Silver’s Five Thirty Eight blog. Thus, betting big money on Romney at Intrade was a good political move because it would get a lot of media attention.

The whole thing became a minor scandal when a single trader made an $18,000 bet that sent the market way out of balance. I reported on it, suggesting that it was very much like a scam that conservative publishers worked on New York bookstores to get their books on the New York Times bestseller list, thus getting undeserved attention and greater sales nationwide. This got a response from Intrade Exchange Operations Manager Carl Wolfenden, who said that it was just a statistical anomaly and that it wasn’t a single bettor.

I accepted his statement, although right before the election, I revisited the subject noting that Intrade continued to be way out of balance with other betting markets. Now it looks like Wolfenden was just covering for the company. Sethi and Rothschild found that a single person bet between $4 and $7 million on Romney at Intrade during the two weeks leading up to the election. What’s more, this represented one-third of all the money that was bet on Romney during that time.

It is possible, of course, that the bettor could just have thought that Romney was a great bet. But that doesn’t make any sense. The bettor could have made a whole lot more money if he bet at one of the other markets where Romney was an even better deal. In addition to this, at the time, Nate Silver noted that if you really thought Romney was going to win, you could make a whole lot more money investing in coal, that would have gone way up in price had Romney won.

It is certain that Intrade knew what was happening. One-third of all the action on Romney was from a single bettor and they knew that Romney was way over valued on their market! I’m more certain than ever that Wolfenden was involved in a deliberate disinformation campaign. Intrade and the other markets should be illegal. It is wrong that people who want to bet on their favorite football team can’t, but millionaires who want to bet on presidential elections can. And given intrade’s complicity in an obvious effort to game the election, it is particularly villainous. But despite this, I’m sure that in 2016, the mainstream press will again be pushing Intrade as a source of real value in the political horse race.

H/T: Josh Voorhees

Fred the Chicken

Chicken Fred

I have a chicken. Her name is Fred—after Super Chicken’s lion sidekick. But maybe it is more correct to say that Fred has me. It all started two weeks ago. I was working in my room with the window open, because it faces south and so is very hot even on relatively cool days. And I thought I heard a goose outside. I thought maybe a flock of geese had landed to eat, as they do from time to time. But there were no geese so I passed it off to my generally tenuous relationship with the outside world. About 15 minutes later, however, I heard the same sound in addition to some people talking.

I went outside and my neighbors told me that there was a chicken in my yard. The speculation was that the chicken must belong to one of the houses across the highway from us. I went over there and found the main place that had chickens. I managed to get their caretaker to come over, but she claimed that it was not their chicken. This may or may not be true. She just may not have wanted to bother. Regardless, the chicken got into a regular habit of sleeping on the muffler of the car and then hanging out in our backyard during the day. This concerned me. I was afraid we might take off with the chicken one morning. But soon, Fred began spending all of her time in the backyard.

As you can see, Fred is rather skinny. This also concerned me, so I located a feed store and made my way to it. The place had a greeter, so I asked, “A chicken has adopted me, so I’m looking for a small amount of food for her.” He looked consternated, which I took to mean that they didn’t sell small amounts of food. I couldn’t have been more wrong. He said, “We don’t actually give any feed away.” I was simultaneously embarrassed and outraged. I replied, “I’m going to buy it, of course!” So he quickly provided me with the aisle and I was off. He was nowhere to be found when I came out. I hope I embarrassed him.

I asked the guy at the checkout stand how much to feed a chicken. He said about a quarter pound per day. I got a ten pound bag for $5, so that’s 40 days of chicken food. That makes chickens a far more economical pet than cats or dogs. Since then, I’ve been feeding Fred and she has been eating. What’s more, she freaks out quite a bit less than she used to. But we still have a long way to go.

We’ll have to see how things proceed. It may be that once Fred gets back to a normal weight, she will abandon me. But overall, she seems pretty happy. Some people have expressed concerns that Fred might be attacked by another animal. That’s possible, of course. But I don’t think there is a great concern. A cat went after her one of the first days Fred was here. Fred tore off after that cat who hasn’t been back. I think that Fred will be fine.

Afterword

That should be “Fred Henhouse.”

Tender Is F. Scott Fitzgerald

F. Scott FitzgeraldOn this day in 1936, the great puppeteer Jim Henson was born. For someone like me, there is nothing better than The Muppet Show. I love puppets, but it is more than that. It is the zeitgeist of the whole show. The fact that it is a collection of marginally talented characters who decide to “put on a show” that makes it especially compelling. It also has a very high silliness to funny ratio.

Of course, Henson did a lot more than that. And his legacy will long out live him. I continue to see non-Muppet related work being done by the Jim Henson Company. It is the kind of stuff that goes back to the great film Labyrinth. Here is a collection of clips of the Swedish Chef, which was apparently the Henson character that all the staff most loved:

The film director Bert I. Gordon is 91 today. He is best known for his B-movie classic The Amazing Colossal Man, which is really quite good. But I know what you are thinking, “Didn’t you slam one of his films just last year?” Yes, in Earth vs. Burt I. Gordon! I did review Attack of the Puppet People. But even though I was critical, I concluded, “As drama goes, Attack of the Puppet People is a disaster, and yet it somehow works.” And that is a lot more than I can say for most big budget action films that are produced today. Regardless, Gordon has greatly improved the world with his work. I assume that his 91st birthday finds him well, because he is currently in post production for a new film, Secrets of a Psychopath. Totally fucking awesome!

Other birthdays: jurist John Marshall (1755); comedian Phil Hartman (1948).

The day, however, belongs to one of the very greatest American writers F. Scott Fitzgerald who was born on this day in 1896. He wrote beautiful prose at a time when most writers were more inclined to play with language. Probably the best of these writers was Gertrude Stein, but even on the micro-scale, I don’t think she compares. What’s more, Fitzgerald crafted great characters existing in complex worlds. What most appeals to me is the thematic thread that I think links all of his work together: the power of love simultaneously for good and ill. We see this most explicitly in Tender Is the Night, where love is effectively transferred from one declining character to another ascending character.

Of course, I need to be careful in discussing Fitzgerald’s work. A couple of years ago, I wrote about The Love of the Last Tycoon and how the line “There are no second acts in American lives” didn’t mean what people thought. In addition, I noted that the book was written in the first person and just because a character thinks something, doesn’t mean the writer thinks that. Some idiot took exception, “I truly love it here online when people with pretty thin resumes take on the dead masters. Amazing to read.” What I find amazing is that people take the time to comment on articles they clearly haven’t read. I wasn’t criticizing Fitzgerald; I was criticizing those who ignorantly quote him. So I always worry that there are idiots waiting around to bash me for things that exist only in their own very limited minds. Perhaps this time people will defend the “dead master” for the slight of only considering Fitzgerald “one of the very greatest American writers” rather than the greatest writer in any language ever. Whatever.

Happy birthday F. Scott Fitzgerald!

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Democrats Aren’t in Trouble in 2014

Charlie CookShould we be worried about the Democrats’ chances in the 2014 elections? Charlie Cook thinks we should. He has been looking at the polling from NBC News/Wall Street Journal. And he is right that it isn’t a slam dunk for the Democrats regardless. But I think he’s overstating the problems.

Most of his article presents relatively good news to the Democrats. In generic polling, Democrats have a 45-42 advantage over Republicans. But these generic polls tend to overstate the Democratic advantage by 2 percentage points. Thus, right now, it looks like the Democrats have a 1 percentage point advantage in 2014. This is not great. In 2012, the advantage was 47-42. According to Cook’s 2-point rule, that gave the Democrats a 3 percentage point advantage, which is about right (the Democrats did better than that in the White House and Senate, but worse in the House). In 2010, the disadvantage was 43-45, or a 4 percentage point advantage for the Republicans. So the Democrats are looking a lot better for 2014 than they looked for 2010.

In addition to this, remember that the 2010 election was a great defeat for the Democrats in part because they held so many marginal seats. The Republicans have won those seats back. So the idea that the Democrats could lose another 63 seats is ridiculous. But as I wrote in The Next Three Election Cycles, the 2014 election is likely to be a wash for both parties. This is assuming that the Republicans don’t do anything really stupid. But barring that, I assume that Republicans will make minor gains in the House and Senate. That might mean they take control of the Senate. But we aren’t likely to see huge changes.

Cook’s concern about the Democrats comes from the polling of independent voters. There has been a decided shift among this group of voters toward the Republicans. Right now, they are divided 25-43. This is dramatically different from 2012 when it was 35-34 and even worse than 2010 when it was 26-40. I don’t really trust the category of “independent voter.” In general, it is just a bunch of people who are Republicans or Democrats who refuse to admit it. And the fact that there is this huge swing from off to on to off year elections makes me think that this is mostly just a question of extremely conservative “independents” who always vote and moderate “independents” who only vote for the president.

There’s another issue: since 2005, there has been a steady increase in “independent” voters and decrease in Republican voters. In 2005, there were 33% of voters claiming to be independent and 33% claiming to be Republican. In 2012, 40% claimed to be independent and 27% claimed to be Republican. So part of the change is just the fact that more and more Republicans are claiming to be independents. What’s more, I think most of these people have changed because they think the Republican Party is too liberal. So these are the most conservative (Tea Party, most likely) Republicans.

Charlie Cook is not really partisan and so I’m sure he is just presenting the data as he sees it. But like most such people, I suspect he has a bias toward the supposed center of the political spectrum. And that is what all of the concern is about the “independent” voters. Of course, as I’ve noted: these supposed independent voters aren’t all that independent and regardless aren’t centrists. Should the Democratic Party start pandering to this group? After all, it did very well with this group less than a year ago. Has anything happened in that time that would make a reasonable person turn against Obama and the the Democratic Party? I don’t think so. This isn’t a group that the Democrats are going to convince regardless. And the “independent” vote is already factored into the total vote. The last thing the Democrats need to do is move to the right yet again.