• Mitt Romney's odds of winning Wisconsin, which holds its primary alongside Maryland and the District of Columbia on Tuesday, have been very good for about 10 days, according to both the political prediction markets and the major polls. We are very confident that he will win Wisconsin, where his odds currently sit at 96.2 percent. Rick Santorum is just 4.3 percent likely to pull off an upset victory. Romney is also almost certain to carry Maryland.

    Likelihood of Winning Wisconsin Primary

    Sources: Betfair and Intrade for prediction market data and FiveThirtyEight for poll-based forecast

    What the polls don't tell you is that contrary to his dismal numbers in mid-March, he's always had at least moderately favorable odds in the state. We should remember, however, that markets use polling data just like everyone else, and aggregate that information with other signals to produce their odds. The big jump we see in the odds correlates with the release of positive poll numbers for Romney.

    Santorum and the other candidates now have negligible odds of winning the nomination. There is a small but non-negligible likelihood of a brokered convention, but Romney would likely emerge as the nominee, given that he will control the most delegates.

    Read More »from Markets: Romney will win Wisconsin and Maryland primaries
  • Click image to see more photos. (AP/Carolyn Kaster, File)Click image to see more photos. (AP/Carolyn Kaster, File)Today, the nine Supreme Court justices will cast preliminary votes on the fate of the Affordable Care Act. The result, which can change over the coming weeks as the justices prepare and exchange opinions and dissents, will not be announced to the public until June, but the political markets are doing business trading shares on one of the key questions: Whether the court will strike down the heart of the legislation, which requires most Americans to purchase health insurance or pay a penalty.

    The latest forecasts give 62.8 percent odds that the Supreme Court will strike down the so-called individual mandate. But there is less precision in this forecast than we see in elections. When the Signal creates forecasts for who is going to be the next president, we can use multiple prediction markets, polls, and fundamental data. We have a track record of how this data has worked in the past, so we can calibrate forecasts based on those historical correlation. There are no polls of Supreme Court justices and a good deal of uncertainty in the one market taking action on the outcome.

    That prediction market, Intrade, betrays its uncertainty by the wide variety of prices people are willing to pay for or sell a contract on the odds. In markets with high certainties where people are confident in the information they have, like elections, the price of placing a bid is within a small range of the overall price. In this case, we see a range in prices that is 4.75 times larger than the distance between buyers and sellers in the market on Obama's odds of reelection. Even people with the highest amount of information are uncertain of the outcome.

    Read More »from Markets predict Supreme Court will overturn health care law, but uncertainty is high
  • There has been mounting speculation that Greece's economic woes will cause a breakup in the eurozone, the group of countries that share the euro as their currency. Like elections and sporting events, the online markets allow people to place bets on the likelihood that this will happen, giving us a means of predicting the odds.

    Presently, the markets place an 83 percent likelihood on the odds that a country leaves the eurozone by 2015, adopting its own currency instead. Greece is the most likely country to cause this breakup, with Italy ranking a distant second:

    Likelihood of Leaving the Eurozone

    The reason observers are so confident that Greece will leave the eurozone is easy to explain.

    The European Union and the International Monetary Fund have demanded that Greece adopt severe austerity measures as a condition for staying in the eurozone. The current government has implemented them, a move that correlates with Greece moving ever deeper into recession. Unemployment in the country is edging above 20 percent. Now more

    Read More »from Will Greece abandon the euro? Markets say yes, within 3 years.


(177 Stories)

About The Signal

The Signal is the Yahoo! News predictions blog featuring real-time forecasts and sentiment on politics, economics, and more. MEET THE TEAM: David Pennock, David Rothschild



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