Prediction Markets Update (September 18, 2008)

Although Nate Silver’s PECOTA model (see FiveThirtyEight) continues to show a 288 to 250 Electoral College advantage for John McCain over Barack Obama, the “trend” begun yesterday continues today; i.e., 2008.PRES.OBAMA is rallying while 2008.PRES.McCAIN is selling off. Specifically, the 2008.PRES.OBAMA Intrade contract now trades at 51.7, whereas the 2008.PRES.McCAIN Intrade contract is currently trading at 47.7 (compared with 50.7 and 48.6 respectively as reported on yesterday’s update). The pundits claim that that the slippage is due to McCain’s comments earlier this week to the effect that he believed that the “…fundamentals of the economy are strong”; with financial markets volatility particularly high this week, Mr. Obama apparently turned these comments into a marginal political advantage.

Looking at the state-by-state contracts, it appears (based upon my cutoff price point of 55 for allocating Electoral College votes) that Mr. Obama currently holds a 264-240 lead over Mr. McCain. Since yesterday, Ohio (20 Electoral College votes) has moved into the “swing” state category, whereas Virginia (13 Electoral College votes) has moved back into McCain’s column. This leaves Nevada (5 Electoral College votes), Colorado (9 Electoral College votes), and Ohio (20 Electoral College votes) as the “swing” states du jour.

Addendum: September 18, 2008 Electoral College Vote allocation

Barack Obama (264): California (55), Connecticut (7), Delaware (3), District of Columbia (3), Hawaii (4), Illinois (21), Iowa (7), Maine (4), Maryland (10), Massachusetts (12), Michigan (17), Minnesota (10), New Hampshire (4), New Jersey (15), New Mexico (5), New York (31), Oregon (7), Pennsylvania (21), Rhode Island (4), Vermont (3), Washington (11), and Wisconsin (10)

John McCain (240): Alabama (9), Alaska (3), Arizona (10), Arkansas (6), Florida (27), Georgia (15), Idaho (4), Indiana (11), Kansas (6), Kentucky (8), Louisiana (9), Mississippi (6), Missouri (11), Montana (3), Nebraska (5), North Carolina (15), North Dakota (3), Oklahoma (7), South Carolina (8), South Dakota (3), Tennessee (11), Texas (34), Utah (5), Virginia (13), West Virginia (5), and Wyoming (3)

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