"What you’re doing is collecting bits and pieces of information and
aggregating it so we can watch it and understand what people know. People picked this up and
called it the ‘wisdom of crowds’ and other things, but a lot of that is
"John McCain’s presidential campaign is doomed — at least, if you still believe what political futures markets indicate. At the Irish electronic exchange Intrade, on which people bet on election outcomes and other events, the futures market suggests Mr. McCain has a 38% chance of becoming the 44th president. In the Iowa Electronic Markets, set up at the University of Iowa, Mr. McCain’s Republican Party gets a 41% chance of winning the popular vote for the White House.
Then again, six months ago, the Iowa markets gave Barack Obama less than a 30% chance of winning the Democratic nomination. Academic studies suggest these markets are more reliable than opinion polls, but that might be giving the markets too much credit.
Intrade futures had John Kerry beating President Bush well into the evening of Election Day 2004. They also said there was a good chance Mr. Obama would top Hillary Clinton in January’s New Hampshire primary, which she won."
The article details many of my favorite quibbles: thinly traded, plagued by bad information, skewed participation, bubbles, head-fakes and manipulation.
What did it reflect when all those people bought all those Hillary Clinton and Rudy Giuliani presidential futures when each was a front runner? Somehow, the phrase "Wisdom of Crowds" just doesn’t seem to capture the full essence of that . . .
Iowa and Prediction Markets, January 24, 2004 http://bigpicture.typepad.com/comments/2004/01/iowa_and_predec.html
Why Prediction Markets Fail January 11, 2008 http://bigpicture.typepad.com/comments/2008/01/prediction-mark.html
Misunderstanding Prediction Market Failures February 14, 2007 http://bigpicture.typepad.com/comments/2007/02/misunderstandin.html
Traders’ Calls Just as Bad On Elections
WSJ, May 13, 2008; Page C1
I tried embedding a Windows Media version of several recent Bloomberg Videos yesterday, but somehow, we ended up with the autorun feature on, regardless of the setting.
This morning, I will embed it into a page after the jump to prevent that from autorun reoccurring:
Citigroup Inc. Chief Executive Officer Vikram Pandit faces an "impossible feat” in turning around the biggest U.S. bank as it faces “seismic” costs to restructure, Oppenheimer & Co. analyst Meredith Whitney said.
Citigroup will be forced to announce the sale of major businesses toward the end of this year or in early 2009, Whitney, who recommends investors sell the shares, said in a Bloomberg TV interview today. One of the units could be Banamex, the company’s Mexican branch, she said.
Whitney, 38, correctly predicted on Oct. 31 that New York- based Citigroup would cut its dividend to shore up capital after mortgage-related writedowns. Pandit on May 9 outlined plans to sell $400 billion in assets at the bank, which has booked more than $40 billion of credit losses and writedowns since the subprime mortgage market collapsed last year.
Citi’s Pandit Faces `Impossible Feat,’ Whitney Says
Margaret Popper and Josh Fineman
Bloomberg, May 12 2008
Boone Pickens Says He Is Ready to Bet on Wind Power
Bloomberg, April 29 2008