Measuring What Matters

An instinct for the capillary

“But as the blogger Tim Cavanaugh notes, the smart money is taking his side: "After a weeklong bump into the double digits, the Dick Cheney June 30 retirement futures at intrade.com have plummeted; they are now below where they were before the shooting."”

While this politically focused article only mentions intrade in passing, it shows how prediction markets have come from being objects of curiosity to actual reference points in news stories. It also shows that despite the headlines people have not had a significant change in opinion because of the shooting incident. Cheney hasn’t felt any real pressure to resign and the hunting accident didn’t change that.

If you remember the 2004 debates, there was endless sniping about who “won” after each one. Polls weren’t that useful because they were so tainted with politics they didn’t track what really mattered: who would win the election. Fortunately the market did. And what it showed was a few percentage point move after the debates to none at all. In other words the debates didn’t change anyone’s mind or have any other effect on the odds. You wouldn’t know it from the hours of TV and gallons of ink wasted on the topic. As Cheney’s case shows, if you really want to know what is going on, follow the market not the headlines.