Archive for July, 2004

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The Lib Dem surge is BAD for Labour

Thursday, July 22nd, 2004

kennedyscotlibdems

    After our Lib Dem BUY CALL – now SELL LABOUR

      Five weeks ago we advised that backing Charles Kennedy’s Lib Dems for 58 seats or more on the spread markets was a good value bet. Those who took the advice could now get out at a profit of four times their unit stake. But don’t – even with the buy price rising last night to 66 we believe that this is still value for money.

        Now another big opportunity has emerged on the spread markets – SELLING LABOUR. In spite of the drubbing the party got in last week’s by-elections the spread price on Labour has surged to such a point where there’s now real value in selling at 346 seats.

      With this type of bet you win your unit stake multiplied by the number of seats that Labour is short of 346. So if they got 316 and you had £10 a unit on your winnings would be £300. On the other hand if Labour got 366 you would lose twenty times your unit stake.

      The latest prices for Labour on the spread-betting markets are over-valued and offer a good opportunity for punters wanting to bet against them. These are last night’s figures with comparisons from last week before the by-elections:-

      LAB 346-354 (+14 ): CON 212-220 (-27): 62-66 (+6)

      What’s not taken into account is the reduced sized House of Commons and the spreads seem to assume that the rise of the Lib Dems – up to 25% in this week’s ICM poll – will have almost no impact. The theory is that the party will just build up votes that it cannot convert into MPs. We disagree and our view of the outcome is based on the following factors:-

    • Labour’s poll lead over the Lib Dems has collapsed by more than 25% compared with what it was at this stage before the last election. In July 2000 Mori had Labour at 49% to the Lib Dems 12%. At the election in 2001 Labour dropped 7% and the Lib Dems rose 7%. The idea that Labour will recover by the time of the General Election is not backed up by what’s happened before – in fact the reverse is true.
    • Labour is certain to lose 10 seats in the Scottish boundary changes that reduce the total of MPs from 659 to 646. Why the spreads are continuing to accept bets without factoring this in is amazing. This factor alone is worth a SELL Labour bet.
    • The Lib Dems will do far better than the national swings to win 20+ Labour seats. Being an incumbent Government and having to deal with the rising Lib Dems is a new experience for Labour, and so far they’ve shown themselves to be pretty inept.
    • The anti-Tory tactical voting of the past two elections will be minimal. A main reason that Labour got its mammoth majority in 2001 was because mostly Lib dems switched in key seats to produce an estimated 30 extra Labour MPs. That’s not going to happen on anything like the same scale again, if at all, and we have calculated an unwind factor of 13 seats from Labour to the Tories.
    • The emergence of anti-Labour tactical voting. This happened in Brent East, Leicester South and Birmingham Hodge Hill and is likely to appear at the General Election, possibly causing the loss a critical seats.
    • The pollsters will, as in every election from 1992 onwards, have a marked pro-Labour bias. The average has been 6.5% – we are working on 4%. There is no sign that this has changed and to compensate have cut 2% of the Labour figure in the “poll of polls” and added 2% to the Tories.
    • Applying these factors to Martin Baxter’s current “poll of polls” we get the following House of Commons:-

      LAB 295: CON 237: LIBD 82: OTH 32

        Thus our projection has Labour at 51 seats less than the current spread sell price. We think that this is a good value bet.

      In the Commons the party Labour would be 28 seats short of an overall majority. The combined Lib Dem and Tory total of MPs would not be enough for a majority. Michael Howard’s Tories would, just, be the biggest party in England.

      2 pm UPDATE – A by-election in the town that elected H’Angus the Monkey as mayor?
      monkeybbc

      If Peter Mandelson is appointed an EU Commissioner this morning then there will be a by-election at his seat in Hartlepool. At the 2001 election this was the result:-

      LAB 22,506 (59.15%): CON 7,935 (20.85%): LIB 5,717 (15.02%): OTH 1,893 (4.97%)

      Hartlepool voters were last in the news two years ago when they rejected Labour and elected local football team mascot, Stuart Drummond, known as H’Angus the Monkey, to the post of Mayor after securing 60% of the vote.

      NEW MARKET – MANDY TO BE A NON-STAYER FOR THE THIRD TIME?
      Meanwhile, following his nomination by Tony Blair, bookmakers William Hill are offering odds of 3/1 that Peter Mandelson fails to see out his full term as Britain’s EU Commissioner. Surely this won’t happen a third time? This is a great bet for William Hill and a bad one for punters. You have no idea when you will get paid – it could go on for years – and meantime you are locking up your money with the bookmaker.



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Polling Accuracy – Which firm did best?

Wednesday, July 21st, 2004

case

    Populus sets out its case

Opinion polls are critical tools for political gamblers and in recent weeks we’ve made a number of observations about their accuracy. In particular we have looked at what happened at the Euro Elections last month when surveys by YouGov, in the Telegraph, and Populus, in the Times, could be compared with real results.

    Two days before the Euro vote we noted that YouGov was putting its reputation on the line with its very high figure for UKIP and, indeed, this is what is has been attacked for.

But after the elections we also noted that the internet pollster got closest with the crucial Lab-Con split although both it and Populus both under-estimated the Tories and over-estimated Labour – something that most polls most of the time when tested seem to do. This tendency is something that gamblers should always be aware of and should always factor in.

This prompted the head of Populus, Andrew Cooper, to post this comment. We think that he makes important points that should be given greater prominence.

As a matter of actual fact the accepted measure of accuracy in the polling industry is the average error in the final poll published before an election. On this measure the Populus poll conducted nearly a week before polling day, was fractionally more accurate than YouGov’s poll conducted around the same time, with an average error of 2% compared with 2.2% for YouGov’s.

What is more YouGov’s exit poll – with a massive 7,000 sample of people supposedly being polled after they had voted, and therefore in theory much more accurate, had an average error of 2.8% (compared with a theoretical margin of error, given sample size, of 1.1% – which technically classifies it as a rogue poll). The YouGov exit poll predicted essentially a 3-way tie between Labour,Tories and UKIP.

Within all of these figures lies an immutable fact about polls, which you seem to have missed: they are blunt instruments; even the most methodologically robust poll cannot be more accurate than its standard deviation, which is a function of sampling. For most polls this means the figure for any party is accurate to within plus or minus 3%. So a poll putting Labour on, say, 32%, in fact means simply that there is a 95% probability that their support lies somewhere between 29% and 35%.

For this reason reading the leads between parties from polls is an even more treacherous business, since the margins of error on two figures are compounded: our last poll, for example, showed a Labour lead of 4% but in fact, when margins of error are taken into account, it meant that Labour’s lead is (at 95% confidence) somewhere between -2% and +10%.

Generally speaking the polling companies have done a pretty good job in as much as they’ve stayed within the margin of error most of the time. Populus did so again in the Euro elections; YouGov didn’t. Not only was its average error outside the defined margin of error, but it erred on its UKIP rating by a wide margin – an egregious mistake (presumably a result of the sampling problems associated with internet-only polling), compounded by the probability that UKIP would not have done even as well as they did by the end had not

YouGov not wrongly placed them at nearly 20% right at the beginning, which became the story of the campaign. Polls which make headlines, as that one did, have the capacity to become to a degree self-fulfilling: just one of the reasons why integrity of method is so important and why there is a drive now to improve the self-regulatory standards of the polling industry.

Incidentally, since you raise the point, Populus has only once shown a Tory lead – in May. ICM have shown the 2 main parties level-pegging several times. MORI have shown a Tory lead at least once (July 2003). And if you average each company’s polls (a sensible way to allow for the inevitable blips) you will find that, since last summer Populus has shown an average Labour lead of 2.9% compared with 3.9% for ICM, and 2.9% for MORI while YouGov has the Tories in the lead by an average of 2.4%.

The key driver of this variation is the fact that Populus, ICM and MORI all have the Tories averaging 32% over the last 18 months, while YouGov have them averaging 38%.

Your proclamation that Labour will win most seats at the next election but might not have an overall majority puts you way out on that limb with YouGov! All I can say is I’m very glad I don’t have any of my money riding on your prediction (or their’s)

We are grateful to Andrew for this but he has not touched on the major issue – why is it that almost without exception polls are biased to Labour? We have made critical comments in the past about other firms and none has responded. This is an important issue and the more we know the better.

    We hope that at least one of the bookmakers will open a market at the General Election on which pollster will get closest

.

Image http://www.aperfectworld.org/clipart/Metaphors/signonlineb.gif



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Monday Call – July 19 2004 (NEXT POST THURSDAY)

Sunday, July 18th, 2004

present

    Give a political bet as a present!

If you’ve been celebrating or commiserating after Thursday’s by-elections you might be interested in a new gambling service where you can give political bets as presents. It’s all done online and you can give one to yourself.

What’s promising is that the service, Flipem, does well thought out political bets and ran what we think was the only “size of majority” market on the Leicester South by-election, where we came across them. For a unit cost of £2 to you you could have given someone £12 if the Lib Dems had had a majority of 1-2,500.

    They’ve now got a market on how many seats the Lib Dems will get at the General Election with some reasonable odds.

For 71-75 seats a £2 “gift” will produce £20 for the recipient of your choice if that’s what the party eventually gets. The 45 or less “price” is £32 for the £2 stake which might be popular amongst Labour or Tory supporters! No doubt other political markets will emerge and we will keep an eye on them.

General Election spread-betting gets cheaper. After last week it’s even more tricky to predict the number of seats that each party will get and punters seem to be keeping well away from the spread betting markets. These have now reduced their prices – the spread between “buy” and “sell” – in order to make themselves more attractive but, apart from the Lib Dems, we do not see any value.

  • Labour did well to “spin” the disaster of the by-elections but there’s no sign that the voters are returning. It’s a bold gambler who bets on them getting more than 350 seats especially as they’re down a certain 10 seats in the Scottish boundary changes and the tactical anti-Tory voting that gave them an extra 30+ MPs last time will not be there to the same extent.
  • the Tories are, in spite of the doom-ridden headlines, holding their position but the by-elections show that they are not advancing. Less tactical voting, and a smaller margin with Labour, should push them well above 200 seats whatever but we are not confident about the “buy” level of 230.
  • the Lib Dems are the main beneficiaries though it’s much harder for them, because of seat distribution, to convert votes into MPs. We think that they will get more than 63 seats.
  • The new reduced priced spread markets are:-

    LAB 343-350 (+3) : CON 223-230 (-8) : LIBD 59-63 (+1)

    The main General Election market move in the opposite direction. The Labour price went from 2/7 to 1/3 on William Hill and this is the current best value. These markets are about Who Wins Most Seats and not on who gets a majority and it’s very hard to see how there can be any other result than Labour coming out on top even if it suffers a huge drop in votes.

    TONY BLAIR. He’s still there and while he wants to stay in the job we think that he will remain. Two markets – will he be there on election day and who will be the Labour leader?

    There’s even now a market on him being Prime Minister longer than Mrs Thatcher. You can get l!1/2 that he won’t and 6/4 that he will. We wonder whether Gordon Brown has any money on? We do not like markets where you do not know when you will be paid and the prices are not good value.

    WHITE HOUSE RACE
    Just a week off the Democratic Convention in Boston when John Kerry will be selected, formally, as the party nominee for President in the election on November 2. For those with winning bets on Kerry for the nomination this should mean that we get paid out.

      The frustrating thing about this market is that it was all resolved in early March yet we have had to wait for so long for the pay-out.

    Next time the bookies should define getting the “nomination” when a candidate has secured enough delegates.

    The polls have hardened on the Kerry-Edwards ticket and so have the betting prices. Bush, at 9/10, is at his weakest point ever. We stick with our BACK KERRY call.

    Other markets have started to emerge including ones on who will win particular states. Included amongst them is Florida where there was all the fuss last time.

    POLITICALBETTING.COM We will be away for a few days though reader comments, no doubt, will continue. Next post – Thursday July 24.

    Image: http://www.sbac.edu/~tpl/clipart/Holidays/present%2002.jpg



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    Could Welshman Howard be flying the England Flag?

    Sunday, July 18th, 2004

    England Flag

      What about a market on which party will win England?

    Given the fact that the overall General Election markets are almost a foregone conclusion why not a market on which party will have most of England’s 529 MPs after the General Election?

    A crumb of comfort for Michael Howard is that the Lib Dems’ ability to take votes and seats off Labour puts this goal within sight.

    If the Lib Dems just do as well in the General Election as they did last time then the Tories need 244 seats to be top in England. This involves the Tories taking 80 seats from Labour which, as things stand at the moment, looks challenging given that they got just 164 English seats in 2001.

      But for each Lib Dem success against Labour in England the Tory target is reduced and if, say, 20 seats went Charles Kennedy’s way, then this might be possible.

    Last week’s by-elections showed that tactical voting against the Tories might not happen on anything like the same scale as the last two General Elections when it reduced Tory seats by 30-40 compared with the national swing. With this factor then Michael Howard probably starts with a base of about 200 seats – a long way off the 324 for an overall majority but not too far from being top party in England.

    Aiming to be top party in England might resonate well with English voters. Issues like per capita public spending in Scotland being much higher than in England and Labour MPs from north of the border voting on issues like university fees would be much easier to exploit as top party. Also the Tories have almost nothing to lose, just one MP, in Scotland.

    Whenever there’s a red hot favourite bookies sometimes look at a way to create a handicap market. Could Englaand seats only be the one for the General Election? We think so



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    When are voters going to stop punishing Labour for the war?

    Saturday, July 17th, 2004

    war demo

      What happens if they never come back?

    All the General Election betting markets have been reacting to the by-elections and the Butler report on the assumption that voters will automatically return to Labour. The spread-betting market, extraordinarily, thinks that all this means that Labour is going to get more Commons seats. But what happens if those who stopped supporting the party because of the war just never come back?

      The conventional theory is that they’ll return to stop the Tories. But will they do this if Michael Howard’s party is seen as a spent force?

    In almost every election since Tony Blair took the UK into the Iraq War Labour has been hammered by the voters. With the lone exception of Ken Livingstone in London the past year has been unmitigated bad news for the party.

  • May 2003. Local Elections Labour share DOWN to 27.9%
  • September 2003. Brent East by-election. Labour DOWN 63% to 33%
  • June 2004. Local Elections England & Wales. Labour’s 26% puts them 3rd .
  • June 2004. London Assembly Elections Labour share DOWN to 24.3%
  • June 2004. Euro Elections. Labour just 22% national vote – a record low
  • July 2004 Leicester South by-election. Labour DOWN 54% to 29%.
  • July 2004 Birmingham Hodge Hill by-election Labour DOWN 64% to 36%
  • The result that has really impressed us is Hodge Hill where the Lib Dems came within a few hundred votes in spite of one of the dirtiest and toughest Labour campaigns for years. The candidate’s day job in the mobile phone mast industry was used repeatedly in stunt after stunt to undermine her. Yet the voters still smashed into Labour.

      Can we be certain that Labour’s appalling period is going to come to an end by the time of the General Election? Is it just a wild Lib Dem dream to think there could there have been a permanent shift in British politics?

    Or are we just seeing the normal mid-term blues of a party that’s been in power for nearly three-quarters of a decade?

    The history books show that wars cause fundemental shifts in British politics – 1918 and 1945 being good examples. Is the conventional view correct that Labour will just return to its normal popularity next May or will things be different?

    We don’t know but in almost every arena when Labour is fighting the Lib Dems it’s Charles Kennedy’s anti-war party that comes out on top. In all of this the Tories did not do too badly with vote share drops of 2-3%. They are just irrelevant.

    Today the spread markets have moved further to the Lib Dems and we think that the could be real value in the latest BUY price. The Labour change is perverse.

    LAB 337-347 (+2) : CON 228-238 (-5) : LIBD 57-62 (+2)

    The other good Lib Dem bet is the 10/11 on them winning 61+ seats with Bet365 – a market that they try to hide from us but link in from here.

    Picture – http://peacenowar.net/Iraq/News/Photos/London-3.JPG



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    Smart punters should stick with Tony

    Friday, July 16th, 2004

    UPDATE NOON
    Blair

      Ignore the post by-elections odds changes on Blair and Labour

    After Labour losing its parliamentary seat in Leicester South to the Liberal Democrats but holding Birmingham Hodge Hill with a majority in hundreds rather than thousands smart punters should stick with Tony Blair even though the response of the markets has been against him and Labour. The William Hill price on Blair going before the General Election is down to 5/4 and Labour’s odds have lengthened.

    We disagree and our calls remain – back Labour in the General Election market and back Tony Blair to be at Number 10 as Labour leader on election day. Nobody ever got rich underestimating Tony Blair.

    They said he was doomed when he took the country into the war without UN sanction.

    They said he was doomed after the the suicide of David Kelly – the Government’s weapons scientist.

    They said he would be doomed after the Hutton Report.

    There’ll be naysayers predicting doom after a week that has seen the Butler Report and now the by-election disasters.

    For however things might look bleak for Tony Blair, they are far bleaker for Michael Howard. For the Tory by-election victory famine – that has gone on ever since rarified political amosphere of the Falklands War on June 3 1982 – continues and the main opposition party still finds it impossible to get some electoral traction even under its new leader.

      Like Margaret Thatcher in the 1980s Tony Blair finds himself with a split opposition and can look to a substsantial General Election victory even if the Labour vote collapses by 10% and the party gets less than a third of the vote.

    In spite of Tory efforts to talk up yesterday they did a little worse in terms of vote share loss than in Brent East last year but they were not squeezed very much. The Lib Dems did so well because so many Labour supporters switched.

    Brent East by-election – change in Tory vote -2.1%
    Leicester South – change in Tory vote –2.6%
    Birmingham Hodge Hill – change in Tory vote -2.6%

    If you want to bet on Labour and Blair – now might be the time to do it.

    The only market where you shoud not back Blair is the one that he will be Prime Minister longer than Margeret Thatcher. Our concern is a betting one – it is crazy to lock up your money for such a long time.

    Picture – easyweb.easynet.co.uk/~jjphoto/blair.jpg



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    Labour now favourite in Hodge Hill

    Thursday, July 15th, 2004

    1pm UPDATE

    Six hours after the polls opened in the Birmingham Hodge Hill and Leicester South by-elections the markets are moving a bit away from the Liberal Democrats.

      There is still very little money going on – just over £10,000 in total at both elections on Betfair – that it seems that supporters of none of the parties have much confidence. Of that total just £904 has been matched in Labour in Leicester and £696 in Birmingham.

    With so many party workers of all parties involved in both cities we expect a clear view to develop during the afternoon.

    SNP LeadershipAlex Salmond has been backed from 12/1 to 4/1 third favourite to become leader of the SNP with William Hill who make Roseanna Cunningham 2/5 favourite with Nicola Spurgeon 7/2 second favourite.



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    Lib Dems odds-on favourites in both seats

    Thursday, July 15th, 2004

    UPDATE NOON
    frustration

        Will it be a day of despair for Labour?

      The Lib Dems go into polling day at the Birmingham Hodge Hill and Leicester South by-election as firm odds-on favourites. At time of posting it was 30/100 in Leicester and 4/5 in Birmingham – the latter price holding in spite of continued tricky coverage for the party over their candidate’s day job in the mobile phone masts industry.

      At noon the Lib Dem prices in both seats had eased a little – in Leicester it was 2/5 and in Birmingham 9/10.

      On the betting exchanges where you can lay (acting as a bookie yourself by accepting a bet) there have been very few punters ready to take even that risk on the Lib Dems which shows a marked lack of confidence in Labour in both places. We think that the Tories will get at least one second place.

        It is our understanding that the Betfair betting exchange markets on the Birmingham Hodge Hill and Leicester South by-elections will continue throughout the day until the offical results are actually announced – possibly in the early hours of the morning.

      This opens up interesting opportunities for betting for those with good links into the party HQs or those with nerves of steel.

      BETTING EXCHANGE POINTS: All unmatched bets were cleared when the polls opened at 7am which is why the prices might look different. When checking a price look at what the “last trade” was rather than what’s being offered.

      Unless you are a party official working at one of the election HQs the best place to find out what’s going on is to look at the betting. As the day wears on the officials will start to get an idea of, first, what the turn-out is likely to be and then whether they are getting their votes out compared with the other parties. This information will spill out and punters will bet on it and prices will move. If there is real solid information then the market will jump with a certainty that is easy to spot.

      From 7am. Polls open and as electors go through each station their numbers are taken by tellers and these are biked or phoned back to the HQs where they are keyed into a computer.

      From 9am. The “knock-up” begins. Lists for the hundreds of party activists start to be generated so they knock on doors to get the non-voters to the polling stations.

      By 6pm. From this information the party workers will start to form pretty clear ideas about how its going. At the central HQs the computers will be producing regular reports and by early evening experienced campaign managers will have a good idea of how they are standing. It might be that workers need to be switched to weaker areas.

      10 pm Polls Close. The ballot boxes are taken under police escort to the count. Betting should continue. Party workers do a rough check as they observe the ballot boxes being opened and the counting clerks unfold the papers and put them into batches. All this information will be fed back back and will start to affect the betting exchange markets.

      By Midnight. Those in the halls will have a firm idea of the result simply by counting the bundles of votes for each party. This will feed out.

      Image http://www.aperfectworld.org/clipart/emotions/frustration.gif