Predictions the day before

This is the 'day before' market predictions for races that I have been tracking on TradeSports. I might also be going into these briefly on tomorrow night's election night coverage on KNSI starting at 7PM.

MN US SENATOR
Kennedy to win: 7.0%
Don't let this price fool you too much. There is no interest in this contract so the 7.0% is a bit of a premium. This contract never went above 50% and was only AT 50% on the day the contract started (December 2005). It has been on a steady decline its entire life last being over 40% in early June and permanently residing under 30% since mid-July. Since mid-September this contract has had only one day over 10%.

MN GOVERNOR
Pawlenty to win: 46.0%
This contract seemed to be a strong possibility to win. Since its inception at the end of March it stayed strongly between 60% and 80% through August 1 (with a 2 day sting slightly under 60% in mid-July). On August 1 this contract shot up above 80% and stayed between 80% and 85% until the Mark Foley scandal broke. That day this (and many other GOP contracts) fell hard. This one fell quickly to 60% and then steadily to as low as 23% by the 3rd week of October. It has not been above 50% since mid-October. The good news for this contract is a new and strong uptrend over the past few days has it rebounding from its new resting place of 30% about ready to break 50% again. At this very moment upward resistance is so weak that a purchase of 7 contracts would push the price back to 59%. The Bid/Ask is very active and also trending upwards.

MN 6th CONGRESSIONAL DISTRICT
Bachmann to win: 40.0%
Wetterling to win: 40.0%
These contracts started late and have had non-existent interest so prices are not very strong indicators as a predictor. There are two offers on Wetterling (people trying to sell) set at 37.5% and two bids on Bachmann set at 40% & 60%.

US SENATE MAJORITY
GOP hold majority: 72.0%
This is a strange pricing. In the previous post I listed the predictions for all of the US Senate races and there was only two toss-ups (both leaning Democrat). The balance of those contracts gave a party count of GOP 49, DEM 49, IND 2. The other paradoxical thing about this contract is its resiliance. From January 2006 until Mark Foley (beginning of October) this contract was strong residing in the 75%-90% range. After Foley it found a new and very volatile home in the 60% to 80%. Activity is very heavy. The floor-ceiling prices are around 70.0%/77.0%.

US HOUSE MAJORITY
GOP hold majority: 22.4%
This contract started 13 months ago in October 2006 and jumped up to 85%. Since then it has been a steady decline to its present spot. The truly disturbing data for this contract is the lead-like drop since the beginning of November 2006...from 30% to nearly 20%. The strongest support is at about 21.0% and the ceiling for resistance is at 25.0% (though there is a lot of resistance before that batch).

US HOUSE DEM PICKUP
Remember these are listed in 1/2 seats to avoid a push. Prcies followed by the prices last Tuesday in parenthesis.
Gain .5 seats: 98.7 (98.8)
Gain 4.5 seats: 97.4 (94.8)
Gain 9.5 seats: 95.0 (89.9)
Gain 14.5 seats: 85.5 (74.0) (needed for DEM Majority)
Gain 19.5 seats: 69.4 (63.8)
Gain 24.5 seats: 44.0 (38.5)
Gain 29.5 seats: 30.3 (29.5
Gain 34.5 seats: 22.0 (added on November 3)
Gain 39.5 seats: 15.0 (added on November 3)
Gain 44.5 seats: 10.0 (added on November 3)
There is no mistaking the trend in the market. The Democrats will gain seats and the closer the elections get the more seats the market is believing will be gained. Safe money is now on 20+ seats.

US CONGRESS ELECTION PARLAYS
GOP House, GOP Senate: 22.0 (25.0)
DEM House, GOP Senate: 57.0 (46.0)
GOP House, DEM Senate: 2.0 (6.0)
DEM House, DEM Senate: 30.0 (25.0)
The trend here mimics the trend in other contracts...The House will change hands. Control of the Senate reflects the same schizophrenia that is mention previously, leading to a conclusion that the Senate Majority is too close to call.

With the parlays the "Dem House" contracts with both the GOP Senate and Dem Senate are rising in price. Granted, the GOP Senate is +11.0% over the past week while the Dem Senate is only +5.0%, they are both still rising. This coincides with the US SENATE MAJORITY contract mentioned above...the GOP is likely to hold the Senate.

The individual Senate contracts are painting a picture contrary to that...the Party breakdown will be split (49-49-2), though the 2 IND will be on the DEM side of the aisle in reality. There are only 2 toss-ups (MO and VA) in the individual contracts, both leaning DEM. If those toss-ups remain with the GOP or if they split then the breakdown will be a technical GOP Majority (51-47-2 or 50-48-2). Difficult to say and these likely will not have a strong indicator until the returns start coming in tomorrow.

And yes, you can trade on these until certification (typically in December).

There you have it...TradeSports day before predictions. If I get an early enough start to my day tomorrow I may give a Same Day update.

One week to go

I have heard about polls trending towards the GOP. One reason I think polls are worthless is I have yet to talk to someone that is actually honest with the pollsters. I heard a statistic yesterday that 35% of people do not participate in polls. The growing number of cell phones replacing home phones AND the growing Do-Not-Call lists also make polls less worthwhile.

So, look instead to where people are putting their money and you may have a better pulse on the trends.

What is the market saying with one week left?
Perhaps this table will help explain the percentages from the market in relation to a football point spread. (Conversions are estimated using Dakota Gold's Conversion chart and TradeSports Converter.)

Contract Range	Success Considered To Be...	NFL Point Spread	Fractional
90%-100%	Almost Certain	-18	1:9
80%-90%	Very Possible	-9	1:6
55%-70%	Very Likely	-6.5	1:3
55%-80%	Likely	-3.5	1:2
45%-55%	Toss-Up	even	1:1
30%-45%	Unlikely	+5	2:1
20%-30%	Very Unlikely	+9	3:1
10%-20%	Longshot	+18	6:1
0%-10%	Extreme Longshot	+21	9:1

Now, the contracts.
GOP Majority...
The GOP holding the US House: 29.7%.
The GOP holding the US Senate: 68.2%.

Democrate US House Pickups (listed with 1/2 seats to avoid 'push')...
1/2 seats: 98.8%
4 1/2 seats: 94.8%
9 1/2 seats: 89.9%
14 1/2 seats: 74.0% (needed for Democrat majority)
19 1/2 seats: 63.8%
24 1/2 seats: 38.5%
29 1/2 seats: 29.5%

Congressional Parlays...
GOP House, GOP Senate: 25.0%
DEM House, GOP Senate: 46.0%
GOP House, DEM Senate: 6.0%
DEM House, DEM Senate: 25.0%

MN Governor...
Hatch win: 74.8%
Pawlenty win: 33.0%
Other win: 2.0%

MN US Senate...
Klobuchar win: 94%
Kennedy win: 8.8%
Other win: 0.1%

MN 6th Cong Dist...(very little volume or interest, therefore amounts are not good indicators)
Bachmann win: 40.0%
Wetterling win: 40.0%
Binkowski win: 0.1%

********** UPDATE ********** (11/1/06)
After taking a quick look at the prices I noticed something very discouraging on the Kennedy contract. If you think Klobuchar is going to win you would buy the Klobuchar contract. However, the prices offered are at 99.8% and 99.9%. These are generally placed to catch typos...people who want to SELL at near 100% but accidentally click the BUY button. This is generally seen on contracts where there is noone willing to put their money against the contract (intentionally).

The same is true on the other side of the spectrum. The "Kennedy Wins" contract is seeing the same behavior in offers. If you think the Kennedy contract will fail then you would sell it. The prices offered are at 4.1% and 4.0%. Same thing as above except the prices are a little further away from 0.0% generally because of number of investors in long shots.

[Explanation: If you wanted to bet on this long shot coming through you would simply buy at 4 cents (plus fees) per contract and if it comes through you earn $10 per contract. That is nearly a 250-fold upswing and nothing is tied up in your account. On the 'winner' contract you would sell at $9.99 per contract getting that money in your account. But since the risk is you having to buy it again at $10 if you are wrong the full $10 per contract is frozen until the contract is resolved. You would only lose 1 cent per contract, but until conclusion the whole $10 is frozen. This is generally too inconvenient for the long-shot investor. Hence, the 'losing' contract floors are generally further from 0% than the 'winning' contract ceilings are from 100%.]

All in all...the market is drawing a ever-darkening picture for Kennedy.

Political forcasting update

There is a new addition to the TradeSports list of contracts that apply to Minnesota. It is the 6th District race. There is only one offer on the Wetterling wins contract (set at 60%) and one bid on the Bachmann wins contract (40%). Once (if) this contract gets some activity I will report on it as well.

The news for the Republicans is looking bad at this point. The current chance given for the GOP holding the US House is 37.5%. There is a ton of price support at 35% and very little upward resistance, but since the beginning of October this contract took a nose dive to the 35%-38% range and has resided there since.

Republican chances of holding the Senate are at 69.0% and have been hovering there since the beginning of Oct. The bid/ask volume indicates confidence in this price. So, barring any further controversies for the GOP the Senate should be the silver lining.

Back in Minnesota the news is not so good. The contracts for Kennedy's chance are priced under 10% and there is little in the activity or the bid/ask to warrant believing the price will break out above 15%.

Pawlenty's race was shaping up to be the silver lining for MN GOP. That was before October. In October Pawlenty's contract fell from 'nearly unbeatable' to 'less than good'. The current contract is priced at 37.6%. The good news on this contract continues to be the lack of interest which means the price can suddenly change in large intervals (for the better or for the worse).

Current prices for the number of seats the Democrats will gain in the US House are as follows:
.5 seat...95.8%
4.5 seats...94.0%
9.5 seats...83.0%
14.5 seats...70.0% (needed for majority)
19.5 seats...56.8%
24.5 seats...35.7%
29.5 seats...25.0%

We'll see how it goes.

Vote Missers in Congress

As the elections draw closer I thought this might be interesting. Who has missed how many votes in Congress?

Interesting things...
The Congressmen who have missed 15% or more of the votes this past session are:
Lane Evans (D-IL) missed 498 votes (42.0%)
Jim Davis (D-FL) missed 300 votes (25.3%)
Ted Strickland (D-OH) missed 251 votes (21.2%)
Ernest Istook (R-OK) missed 201 votes (16.9%)
Harold Ford (D-TN) missed 189 votes (15.9%)
Luis Gutiérrez (D-IL) missed 179 votes (15.2%)

The numbers for the Minnesota delegation:
James Oberstar (D) missed 65 votes (5.5%)
Martin Sabo (D) missed 45 votes (3.8%)
Betty McCollum (D) missed 26 votes (2.2%)
Collin Peterson (D) missed 25 votes (2.1%)
Mark Kennedy (R) missed 24 votes (2.0%)
Jim Ramstad (R) missed 20 votes (1.7%)
Gil Gutknecht (R) missed 16 votes (1.3%)
John Kline (R) missed 0 votes (0.0%)

Yes, that's right. According to the Washington Post vote tally John Kline did not miss any votes. He was one of four that did their entire job. Who were these Congressmen who did their jobs?

John Kline (R-MN)
Fred Upton (R-MI)
Dale Kildee (D-MI)
Bob Goodlatte (R-VA)

On the Senate side it looks like this.
The 5 most AWOL Senators were:
Jay Rockefeller (D-WV) 143 votes
Jon Corzine (D-NJ) missed 136 votes
Daniel Inouye (D-HI) missed 71 votes
Joseph Biden (D-DE) missed 54 votes
John McCain (R-AZ) missed 50 votes

Minnesota's Senators missed the 10th most (Dayton, 5.1%) and the 16th most (4.0%).

And on the good side of the list, there were three Senators who did their full job. Harry Reid (D-NV), Susan Collins (R-ME) and Charles Grassley (R-IA).

Make of that information as you will.

Political Update from the investors

I have been following four contracts at TradeSports. Here is the update with 4 weeks left before the elections.

GOP to maintain US Senate Majority
Just before the Mark Foley scandal broke and dragging down the GOP-House contract the Senate contract began falling. The Senate contract is currently at 70%...a level it has not been since early December 2005. The good news is the chance of maintaining the Senate are still outside of the toss-up range. The bad news is there is a lot of resistance to the price going back above 73% while there is less support to keep it above 45%. There are several interpretations of this mostly summising that GOP control of the Senate is now regarded as a toss-up, but likely.


GOP to maintain US House Majority
The GOP in the House had been in a long downward spiral. They bottomed out at 40% right before the primaries in early September. At that point a quick climb to a 60% chance of winning came about...until Mark Foley. The caused a sudden drop in the investors confidence of the GOP keeping the US House...it fell to below 40% late last week. Currently it is a 42.8% chance of the GOP maintaining the majority.


Tim Pawlenty to win MN Governor
While riding at a 80+% chance of winning for 2 months Pawlenty's contracts plummetted suddenly. Now the contract is priced at the top end of the toss-up range (45%-65%). The good news is the lack of interest in this contract. That is part of the reason for the sudden drop in price. This means that the price can shoot back up just as quickly. Currently if you think Pawlenty will win the price to buy that contract is at 65%.


Mark Kennedy to win US Senate race
For a long time the news from the investors has not been good for Mark Kennedy. It remains that way. The chance for him winning has been at or under 10% for over a month. It has been under the range of "toss-up" for over six months. The now more discouraging part is the amount of interest in selling the contracts is growing.

Conspiracy theory not plausible

I just received a phone call from a radio show wanting to get some insight on a conspiracy theory. Somewhere the idea started that the GOP organized faux support for Ellison to make sure he won so Alan Fine would have a very easy target (and consequently actually having a shot at victory).

It would be folly to say "impossible" but I will confidently say "not plausible".

First consider some of the baggage already unleashed.

Ties to Louis Farrakhan: Sure many people think such ties are a liability but the 5th contains areas where liberal Democrats are considered moderate. There are pockets of the 5th where these ties are either irrelevant or considered a bonus. Most of all, too few people know and understand the danger and hate in Farrakhan, but being in the middle of "hate the other side" politics there is little that can be said to convince these people how bad ties to Farrakhan really are.

Support for Kathleen Soliah: This is now less of a liability to Democrats amongst liberals than it was when it all happened. Yes, conservatives view it as a huge problem. What is forgotten is the demographics of the 5th...hard left in the city and left to moderate left in most of the remainder of the 5th.

Most of the rest of the baggage that will be brought up falls under the same category. Since political discourse in the state is of the "hate the other side, everything they say is wrong" brand there is little that can be brought up against a Democrat in the 5th that will cause him to hemorrhage votes.

The final two things that I believe make the conspiracy theory "not plausible" are demonstrated voting behavior. Look at the precinct by precinct results from this past Tuesday. Ellison's support came from Minneapolis. This is the Minneapolis where the GOP would not be able to get a moderate Democrat elected. This is the GOP that believes it is so outnumbered in Minneapolis that they just roll over in a number of races by finding an incompetent "candidate" and consider being within 40 points an accomlishment.

The ability of the GOP to perform such a coup in Minneapolis is, well, simply not plausible. So, whoever thought this one up should get in their black helicopter and fly to Roswell...at least there will be more reality in THAT then their theory about Ellison, Fine, the GOP, Minneapolis and this year's elections there.

Trade Sports update on November 2006

It is time for the recurring review of what investors are saying for the November elections.

GOP holding control of the US Senate
The last time we checked in on TradeSports (about a month ago) the odds of the GOP holding the Senate were at about 83% and holding. That remains true...the odds are at 80% with very strong support. Translation: being about 2 months away the horizon is very good for the GOP and maintaining the majority in the Senate.


GOP holding control of the US House
The GOP was barely holding its head above the 45% chance line (above which the event is considered a coin flip's chance). The downward trend on their chances, however, has continued and is now at 40%. It is continuing the downward trend and (investors will understand this) there is substantial resistance currently preventing a run up above 45%. Translation: there is a growing chance, according to those putting their money up, that the GOP will lose the majority in the US House.


GOP candidate winning MN US Senate
Two months ago Kennedy's chances were hanging by a thread to stay above 45%. Last month the chances fell to 20% and this month the bottom continues to fall out...according to the investors. The hard part is there are people reporting polls showing a narrowing of the gap between Kennedy and Klobuchar. I believe polls are worth less (regardless of what they are showing) than looking at the money so, if I were forced to listen to one or the other (polls or TradeSports) then I choose TradeSports. The good news for the Kennedy camp is there is little support or resistance which means the chances could change suddenly and quickly for little reason.


GOP candidate winning MN Governor
Consistency in the odds. That is the report here. Since late January Pawlenty has been above 55% (the upper range where the odds are a coin-flip chance). He has been above 80% chance of victory solidly since 1 August. The silver lining for Kennedy is the same rain cloud for Pawlenty: there is little support or resistance which means the chances could change suddenly and quickly for little reason. That said I think, barring some major something-or-other, Pawlenty should begin booking places for his re-election inaugural balls.


I hope to check in on these a little more frequently.

The Work of the People Not to get Done

I have talked to many people over the past several months and asked them, "What are the 5 most important issues in this country?" The responses have never included "minimum wage" or "flag burning". Almost every single one of them gave the #1 issue as either border security or immigration control/reform.

Hmm, so, what will the politicians do?

Answer: demonstrate how "in touch" they are with the issues of the day.

Answer (also accepted): Put the needs of their Party above Principles.

As they prepare for a critical pre-election legislative stretch, Congressional Republican leaders have all but abandoned a broad overhaul of immigration laws and instead will concentrate on national security issues they believe play to their political strength.

With Congress reconvening Tuesday after an August break, Republicans in the House and Senate say they will focus on Pentagon and domestic security spending bills, port security legislation and measures that would authorize the administration’s terror surveillance program and create military tribunals to try terror suspects.

OK, these are not unimportant things. The problem is that these overpaid pols have plenty of time to work on more than just this. So why are they not working on immigration? Border Security? Killing amnesty?

A final decision on what do about immigration policy awaits a meeting this week of senior Republicans. But key lawmakers and aides who set the Congressional agenda say they now believe it would be politically risky to try to advance an immigration measure that would showcase party divisions and need to be completed in the 19 days Congress is scheduled to meet before breaking for the election.

19 days...get it done. There is plenty of time.

Personally I think they are trying to abandon the issue because there is a divide within the GOP about the President's amnesty insanity. God forbid there be any dissention within the ranks of the party...in other words, God forbid there be any discussion about differing approaches to a problem. (Refresher: Harriet Meiers, Dubai Ports.)

In the end it is the political games like this that take priority for politicians (and the parties and their loyal lemmings) which put working on real solutions to the real problems aside...never to be solved.

If you want immigration to be worked on you have to start calling those folks in Washington, DC. And you have demonstrate to them your willingness to set aside the letter behind their name and vote for the PERSON and the PLATFORM.

What is the excuse for trying to sidestep working on immigration?

In a draft of a planning memorandum to be circulated to Republican senators, Senator Bill Frist of Tennessee, who is entering his last months as majority leader, said, “I expect minority obstructionism to be at an all-time high.” Republicans are already preparing for a post-election session to begin Nov. 13 and run at least up to Thanksgiving.

Why a post-election session to deal with this issue? So they will have free reign to do whatever fixes they can without worrying about the elections. THAT should strike you as offensive...they are worried more about elections than solutions to problems. And then they are not intending to do what is right until after reprisals are possible. Party over Principle. If it is important enough to do at all then you should be doing it BEFORE the elections...and then let your record stand for itself.

Mr. Frist laid out an ambitious agenda, including a vote on John Bolton’s renomination to be ambassador to the United Nations. But his memorandum did not even mention immigration. In an appearance in Iowa last week, Mr. Frist said broad legislation addressing what to do about millions of illegal immigrants already in the United States might have to await the next Congress.

Staff members from the Senate and House Judiciary Committees met last week to try to find some basis for common ground on the fate of the illegal population, but one participant said they made no progress.

Fair enough to note the differences between the Senate & the House. However, have that discussion out in public. Let the public hear both sides instead of burying it in closed door meetings and deciding to run away from the issue.

Notice also

For a change, roll up the sleeves and have a debate. Don't run from it...confront it. For a change put the interests of the country and the people above the Party, the Party members and the Politicians' Power.

Please...get working on immigration. Do it now and in the interest of the country instead of doing it when it benefits your party.

Update on political investing

Three weeks ago I posted a few charts from TradeSports about a few political races of interest. (On a sidenote, TradesSports has changed the coding on their charts so they do update now within a posting here.)

Regarding Pawlenty's race it was previously observed:

Tim Pawlenty was trading at roughly a 70% chance of winning
...
He dropped down to [a] 55% chance. Granted there is little support or resistance (for you investors you understand that) on the bid/ask, but it is telling that the race is not necessarily as safe as it previously was.

An update shows a strong recovery pushing Pawlenty over the 80+% chance to win. He has steadily been there since the beginning of August.


In the Senate race's tea leaves I previously reported

Mark Kennedy is still hovering around the 40% chance of winning mark with very little movement, very little interest and very little volume from the investors.

The update is quite the opposite of Pawlenty. Kennedy, with heavier than normal volume, has dropped to a 20% chance of winning.


On to the national picture.

Regarding the US Senate and the chances for the GOP holding onto the majority...The chances are fairly steady at about 83%. There were a few periods of heavy trading but even in there the price stayed steady around 80%.


GOP retaining control of the House seems to be an ever darkening picture.

Previously I wrote:

As you can see from the chart the chance of the House remaining with the GOP is bouncing around between 45% and 55%. Flip a coin and you have the same chances of calling it correctly.

The same is true...barely. The price is struggling to stay at 45% now and the trend over the past 11 months has been steadily falling (from near 90% chance of retaining the majority to the present 45%).

Take those for what they are worth...they are only updates on what the investors think.