Archive for July, 2005

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If it’s not Gordon Brown – then who is in contention?

Saturday, July 23rd, 2005


RED Alan Johnson: GREEN David Miliband: BLUE David Blunkett: BLACK Alan Milburn

    What if “events” blew the Chancellor’s career plan off course?

While all the focus has been on the Tory leadership race it’s easy to forget that there’s almost certainly going to be a Labour leadership contest before the General Election. Gordon Brown, of course, is the red hot odds-on favourite but at 0.29/1 you would probably be better off leaving your stake in the building society than locking it up for maybe three years.

    What makes this interesting to gamblers can be summed up in the famous quote attributed to the former Tory Prime Minister, Harold Macmillan. When he was asked by a young journalist what was his biggest worry, he answered “Events, dear boy. Events”. In short, politics is unpredictable.

Clearly anything could happen before the Labour leadership election actually does take place and it’s interesting to look at how punters are rating the other contenders. The above chart shows the implied probability of the top-rated alternatives to the Chancellor based on the betting prices.

The “event” that made the market change in such a dramatic fashion at the end of May was the French referendum result. This led to Tony Blair abandoning the plan for a UK referendum which had been seen by many observers as the moment when he would stand aside. Although the talk now is of a handover in late 2007 or early 2008 nobody can be really certain.

The contender making the most progress is Alan Johnson – the Secretary of State for the Department for Trade and Industry. David Miliband – the Minister of Communities and Local Government – is following closely behind while David Blunkett still finds favour with punters following his return to the Cabinet after the General Election. What is interesting is that the “big beasts” of Tony Blair’s cabinet are not rated. The Foreign Secretary, Jack Straw, is down at 69/1 while Charles Clarke and Peter Hain are at 35/1.

With Brown being seen as such a certainty there has been very little interest in this market which would only take-off if the Chancellor’s likely succession looked less of a shoo-in.

Mike Smithson



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How Davis’s challengers are shaping up

Friday, July 22nd, 2005


Davis’s challengers – RED David Cameron: BLUE Ken Clarke: BLACK Liam Fox

    Clarke and Fox barely make an impact

The moves to get the Liam Fox and Ken Clarke bandwagons moving in the Tory leadership contest have so far failed to impress the punters who are continuing to rate David Cameron as the man most likely to take on David Davis.

Our latest chart shows the implied probablility of the three main challengers to Davis in the Tory leadership contenders and is based on the best betting prices. This is how gamblers are rating the chances.

    Although Liam Fox and Ken Clarke have seen a little movement in their direction the Shadow Education Secretary, David Cameron, has now moved to above 20% for the first time in the race and his position looks as though it is firming up.

A lot is going to depend on how the contenders do at the party conference in nine weeks time and this, to a certain extent, will be affected by media coverage which we think will favour Cameron. The Daily Telegraph could be very important and there have been signs that it is softening it previous pro-Davis position.

The normal rule for Tory leadership contests, of which there have been quite a few in recent years, is that the early favourite does not do it. Betting against David Davis seems a reasonable strategy and you can do this by LAYING him with Betfair or SELLING him on the Binary Bet spread market. Currently the Binary Bet price is more attractive.

Mike Smithson



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Would choosing Clarke be blowing smoke into the eyes of the membership?

Thursday, July 21st, 2005

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    Can the veteran Europhile make it in a party of Europhobes?

To many of his supporters Ken Clarke’s greatest strength is that like on the EU, or his link with a tobacco company the former Chancellor has never been prepared to tone down his positions in order win political popularity. What a contrast, they say, with Tony Blair and New Labour.

On the face of it the moves to give a bigger role to Tory MPs in the leadership selection process should give a boost the man who was roundly turned down by the party membership in the 2001 ballot that saw IDS get elected. In the betting his price has tightened a touch but the implied probability that this represents is still less than 5%.

    For even if the party at large does accept the rule changes Clarke still has a mountain to climb.

His views on the EU remained solid during his previous leadership bids and clearly will not be compromised to help his current campaign. In a party that has become so opposed to the EU it is hard to envisage how someone with Ken Clarke’s views could make it whatever the process.

Europe, as we saw in the reaction of Tories to Edward Heath’s death, is such a deep issue issue that to outsiders it seems to have become more important than regaining power. We have no reason to doubt the hostility contained in the stream of postings from Tory activists on the site in the past weeks and from these it’s clear that Ken Clarke does not stand an earthly.

    Tory MPs are not going to seize the decision-making process from the membership at large only to foist on them a leader who appears to be so unacceptable to them.

From a non-Tory perspective the attitude to Ken Clarke seems to be some sort of death wish. He is the one contender who has the potential to bring old supporters back and attract in new groups. His strength of character and resolution in sticking to unpopular positions make him a good match for both Tony Blair and for Gordon Brown – if and when the Chancellor does get the top job.

MY BETTING. A couple on months ago I had a spread-bet on Ken Clarke with Binary Bet but got out at a big profit after seeing how Tories on the site viewed his chances. Now I’ve a BUY spread on David Cameron and a SELL one on David Davis which I’m looking to cash in at a profit as sentiment changes on the leading contenders. In this way you can make money on the contest even before the decision has been made.

Mike Smithson



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Blair fourth term market goes online

Wednesday, July 20th, 2005

    It’s 16/1 against him winning a fourth term and staying as PM

If you do not mind locking your money up for several years Ladbrokes have now begun taking online bets on whether Tony Blair will fight and win the next General Election and stay at Number 10.

The price is an attractive 16/1 which we think is a fair reflection of the risk and the cost of the bookmaker and not you holding onto your stake until possibly May 2010. This market was featured in one of the Sunday papers but we have waited until it is available to online punters before giving it a mention. We have been caught out before by bookies announcing political bets which get lots of publicity but which you never hear of again.

    Blair’s official position is that he will step aside for somebody else before the next election. Much of the speculation that he might go much earlier has come from those promoting a Gordon Brown premiership and not from Blair or his office. On this one we believe the Prime Minister.

Quite whether Blair would go back on his previous statement about standing aside before the next election is a hard call. Clearly it would cause huge problems in part of his party but remember they have followed him thick and thin ever since he became leader eleven years ago. Issues like the abolition of clause 4, the introduction of the New Labour agenda and going to war against Iraq without a UN vote have come and gone and the Labour party has learned to live with them.

    Blair has given Labour three successive election victories. If it looked as though he could give them a fourth and he wanted to stay the party would, surely, follow behind.

Perhaps the biggest factor that will cause him to step aside will be personal and not political. But Tony Blair is still a fairly young man – what’s he going to do after he leaves Downing Street?

Mike Smithson



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The money’s going on David Davis not doing it

Tuesday, July 19th, 2005

    Can he still get to the top?

With Tory MPs due to vote on how the leadership contest should operate doubts have started to develop in the betting markets over whether the Shadow Home Secretary, David Davis, will do it.

For the first time since the election “was declared” punters are moving against Davis and the most popular current bet is on him not doing it.

The 2005 Tory leadership race is the first one to be held since the betting exchanges became a siginificant force in the political gambling arena and these offer punters a totally different way of backing their judgement. In 2003, of course, Michael Howard was the only candidate.

The exchanges are attractive because instead of always having to bet FOR a particular contender they allow you to bet AGAINST a particular outcome, and that is what is currently happening with the Shadow Home Secretary.

In the contest a huge gap has emerged between the Shadow Home Secretary’s conventional bookie prices and what’s available on the Betfair betting exchange. With the former the best Davis price is 1/2 which suggests a 75% implied probablity. The last Betfair trade was at greater than evens or an implied probability of less than 50%.

    Following the Tory disappointment in Cheadle and the talk of the last three Tory leaders trying to initiate a “Stop Davis” campaign punters are rushing to take up the chance to put money on him failing to make it without having to name the person who will actually do it.

Apart from the exchanges you can also bet against a contender on the spread markets which have been relatively quiet in this contest. At the moment you can LAY Davis at the equivalent of 3/4 on IG’s BinaryBet market which represents an implied probablility of 62.5%.

Mike Smithson



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In memory of Edward Heath – Prime Minister 1970-74

Monday, July 18th, 2005


I cannot remember whether I had a bet on the 1970 General Election but if I did I certainly did not foresee the extraordinary victory of Edward Heath’s Conservative party. Everybody had written him off and Harold Wilson, it is said, had not even put in place the most rudimentary of removal plans in case he had to get out of Number 10.

Whenever people talk about election certainties I always think of Heath’s achievement.

His term in office was dominated by Britain joining the EEC, the oil crisis of 1973 and his fight with the National Union of Miners which eventually was his undoing.

I have chosen the excellent Heath on a skate board picture because it gives a flavour of the time and the humour in the man. This comes from the excellent http://www.statesmanorskatesman.co.uk/ site which is a great resource of images of politicians doing extraordinary things.

Mike Smithson



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Is this the face of a man who is on his way out?

Monday, July 18th, 2005

    Could Blair stay to fight another election?

As the polls were closing at the Hartlepool by-election on September 30th 2004 Tony Blair issued a statement that he was about to go into hospital for a small procedure and that he would stand down as Labour leader and Prime Minister before the then next General Election but one – which is probably scheduled for 2009.

The move seemed designed to deal with ongoing unpopularity following the Iraq war and to end the speculation about his position within the Labour party. In essence he was saying that he was going to go but not immediately.

As a device it worked and since then the Westminster village has been trying to guess when he would in fact leave Number 10. In the immediate aftermath of the May 5th victory there was much talk of a handover to Gordon Brown within months – and certainly not the years envisaged in his September 30th statement. In the first week after the election you could have got just 2/1 on a transition during 2005.

Following the victory over France in securing the 2012 Olympics for London and the general acclaim at the way he, personally, has dealt with the bombings and their aftermath there’ve been weekend press reports that Blair might just be considering staying on.

    Quite how Tony Blair would square a statement that he was not, after all, standing aside with what he said last year we do not know. But to him such turnarounds are merely minor linguistic challenges. In the normal Blair way he would get away with it.

From all the reports the critical thing to him personally is whether or not his continuation in the job is undermining or helping Labour and it’s here that we think there has been a change of view. He did not go when everything was against him so why should he leave when things are going he his way. Of course there would be ructions from the Chancellor and parts of the party – but since when has Blair been worried about this?

The spread-betting market that we very much like is Sporting Index’s BetHiLo spread on how many months the Blair third term will last. It’s currently at 19-21 month so a buy would give you increasing profits for every month he stayed after February 2007. This looks great value.

Mike Smithson



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Are Howard, Hague and IDS trying to thwart Davis?

Sunday, July 17th, 2005

    Is Liam Fox being lined up as the stop DD candidate?

According to the Sunday Telegraph this morning the last three Tory leaders who failed to make it to Number 10 are considering giving their support to Liam Fox in what the paper says would be “a co-ordinated stop David Davis campaign”.

Melissa Kite, the paper’s Deputy Political Editor, notes that William Hague “….. has expressed privately his admiration for Dr Fox but will demonstrate it publicly when the pair jointly stage a champagne reception at the Conservative Party conference in October on the day that Dr Fox launches his candidacy.MPs last night suggested that Dr Fox might also have the backing of Iain Duncan Smith and Michael Howard in a co-ordinated “stop David Davis” campaign. All three former party leaders have made no secret that they found it difficult to work with Mr Davis, and might be taking their revenge by backing his Right-wing challenger, senior party figures said. Mr Duncan Smith has invited Dr Fox to speak at his Centre for Social Justice think-tank this week. Mr Howard, meanwhile, has appointed Dr Fox, and not his deputy, Michael Ancram, as his envoy to Washington for a meeting with Republicans this month.”

According to Kite the current second favourite, David Cameron, has upset Michael Howard by “..his recent criticism of party strategy and his attack on the policy of scrapping university tuition fees. Mr Howard was said to be “furious” with Mr Cameron’s suggestion that the party had been criticising Labour for the sake of it.”

    Whether this will help or hinder Cameron only time will tell. Certainly being seen as Michael Howard’s preferred choice had both positives and negatives.

The best betting price on Liam Fox is currently 18.5/1 on the Betfair betting exchange and 16/1 with a conventional bookie. At that price it might be worth a few bob.

Mike Smithson