Activity Afoot in Rove Indictment Futures

December 17, 2005 8:32am by

After an involuntary 24 hour blogging hiatus, and after a fast skim, not much calling out to me in Barron’s or WSJ, I felt the NEED to post something.

So let me throw a bone to the Prediction market crowd.

Here’s the trading activity in the Karl Rove Indicted by December 31 2005 futures; Anyone want to hazard a guess as to what’s up wit dat?

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click for larger chart

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Note the activity on Wednesday, December 14 — towards the right hand sidfe of the chart — that’s an enormous spike in trading — its comparable to the trading when Libby was indicted.

Let me hasten to add that the Rove to be indicted on or before March 06 started trading the next day; Perhaps that had some impact on the this futures series.

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via Intrade, as pointed out to me by Don Luskin

Chart

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  2. Jason Ruspini commented on Dec 20

    No explanations are really convincing to me. 1) Why such a lag following an article from the 12th? The market was just asleep, then cascaded? 2) The introduction of the new contract suggests some sort of “roll” trade, but that doesn’t make any sense. 3) As I watched this happen on the 14th, I asked myself “if this is a real leak, why is it snapping back so fast?”.. which suggests 4) manipulation.. but that makes little sense either. A reflexive speculative attack makes absolutely no sense, and if someone was long and trying to spook the market into giving them better exits, that was just crazy. Speaking of manipulation and reflexivity, I will be posting on these topics over at my blog in the next day or so.

  3. Jason Ruspini commented on Dec 20

    Oh, and check-out this great passage from the new Rhode/Strumpf paper “Manipulating Political Stock Markets”:

    Contrary to these sanguine assessments were the frequent assertions that active partisan involvement, especially by Tammany Hall, systematically distorted the betting odds and, in selected instances, speculative attacks and manipulation sought to change the momentum of the races and influence voter turnout. […] As an example, in 1916, Democrats charged “the money was being sent to Wall street to force the betting odds to Wilson’s disadvantage” […] “Already,” one prominent Democrat said, “we are hearing that many up-State farmers are struggling between their conscience and fear that Hughes will be elected and it might be found out that they voted for Wilson.”

    “Already” indeed!

  4. Chris. F. Masse .COM commented on Dec 20

    Jason Ruspini asked why the lag.

    It’s not the first time I notice such a lag.

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