The 2008.PRES.OBAMA Intrade contract now trades at 83.6, whereas the 2008.PRES.McCAIN Intrade contract is currently trading at 16.1 (compared with 77.5 and 23.0 respectively as reported on October 12, which was the the last time I posted an update on the Prediction Markets).

The state-by-state contracts imply that Mr. Obama holds a 364-174 “lead” over Mr. McCain (based upon my cutoff price point of 55 for allocating Electoral College votes). Since there are no longer any state contracts that are trading in the 45-55 range, this means that there currently are no “swing” states left (according to this pricing criterion, anyway). Missouri was previously a “swing” state, but the MISSOURI.DEM contract has rallied substantially and is currently trading at 66.9.

FiveThirtyEight.com currently gives Mr. Obama a 349.2 to 188.8 advantage over Mr. McCain.

Addendum: October 18, 2008 Electoral College Vote allocation

Barack Obama (364): California (55), Colorado (9), Connecticut (7), Delaware (3), District of Columbia (3), Florida (27), Hawaii (4), Illinois (21), Iowa (7), Maine (4), Maryland (10), Massachusetts (12), Michigan (17), Minnesota (10), Missouri (11), Nevada (5), New Hampshire (4), New Jersey (15), New Mexico (5), New York (31), North Carolina (15), Ohio (20), Oregon (7), Pennsylvania (21), Rhode Island (4), Vermont (3), Virginia (13), Washington (11), and Wisconsin (10)

John McCain (174): Alabama (9), Alaska (3), Arizona (10), Arkansas (6), Georgia (15), Idaho (4), Indiana (11), Kansas (6), Kentucky (8), Louisiana (9), Mississippi (6), Montana (3), Nebraska (5), North Dakota (3), Oklahoma (7), South Carolina (8), South Dakota (3), Tennessee (11), Texas (34), Utah (5), West Virginia (5), and Wyoming (3)

Yesterday, newly minted Nobel Laureate Paul Krugman pointed out in his New York Times article “Manipulating the future” that evidence had surfaced to the effect (for the 2008.PRES.OBAMA and 2008.PRES.McCAIN Intrade contracts anway) that

“… someone … was manipulating the Intrade presidential odds, trying to drive up the price of a McCain win and thereby influence political perceptions.”

This brings to mind a similar controversy during the 2004 election. As is documented here and here, an apparent manipulation effort took place in the Tradesports 2004 presidential markets. According to Donald Luskin’s account at the time,

“There have now been four separate “speculative attacks” on the market in futures contracts on Bush’s reelection probabilities… The attacks on the Bush futures have involved massive sell orders placed by a single individual — the same individual all four times — according to a spokesman for Tradesports.com, the Dublin-based futures-trading website. Each attack caused a massive temporary drop in the price of the Bush reelection futures. The most recent attack came last Friday at about 1:30 p.m. Eastern time. It whacked the Bush futures from a price of 54 (indicating the market’s estimate of a 54 percent probability of a Bush reelection) all the way down to 10 (indicating a 10 percent probability of reelection) in just eight minutes. Six minutes after the attack the Bush futures were back to 54. That’s the equivalent of an 8,000-point crash in the Dow Jones Industrial Average followed by an 8,000-point recovery. All within 14 minutes.”

I recall at the time thinking that I wished that I had opened a Tradesports account and put in a “limit” order to buy Bush at 10 :-). More seriously, what impressed me about the incident is how quickly the prediction market price recovered. I highly recommend Alex Tabarrok’s posting from earlier today entitled “Manipulation of Prediction Markets” for more information about this topic.