Archive for the 'WHITE HOUSE RACE' Category

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The November WH2020 Democratic debate and another reminder that they do these things better in the country where Boris was born

Thursday, November 21st, 2019

Biden makes another gaffe so situation normal

Overnight we have had the latest Democratic party debate as part of the prolonged process to determine who should fight against Donald Trump in the presidential election next November.

The event took place after a weekend that had seen new polling in Iowa and New Hampshire showing the 37 year old former Rhodes Scholar, Pete Buttiegieg, moving to clear leads in Iowa and New Hampshire – the first two states to decide. Their caucus and primary take place in early February.

TV debates between the contenders have been taking place every month since June and the events have caused big movements in the betting. Initially Kamala Harris leaped into the favourite slot after an effective attack on former VP Biden. But she was unable to sustain it the following month and has slipped very sharply in the betting.

The current favourite, Elizabeth Warren has slipped progessively since the summer while Buttiegieg has continued to rise.

Meanwhile two times White House failure, Jo Boden, continues to lead in the national polls and, as seen in the clip above, made another boastful claim about himself that simply was not true bringing derisory dismissals from at least two of the other contenders.

My 770/1 super longshot, Amy Klobuchar, had a good night and will hope for better post-debate poll ratings.

What’s impressive is how well the big US TV networks cover these – there’s lot that UK TV could learn.

Mike Smithson




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Induction Technique. Comparing and combining betting markets

Sunday, September 1st, 2019

Write about what you know, they say. So I don’t normally write about American politics, about which I don’t pretend to have any special understanding. I’ll happily bet on it though. I’m going to break my habit now, to consider four related markets on Betfair and their interrelationship, to see if I can find some relative value.

Let’s start with the simplest: the winning party for the 2020 presidential election. The last traded price for the Democrats was 1.92, implying a chance of success of 52%, and that for the Republicans was 2.06, implying a chance of success of just over 48% (those percentages seem familiar from somewhere).

With that in mind, let’s turn to the next President market itself. This is a very actively traded market, with nearly £5 million traded already, and the actual election is more than a year away. For context, the next Prime Minister market – admittedly brand new – has had just over £6,000 traded so far. So the next President market is a fluid and presumably efficient market.  Donald Trump was last traded for next President at 2.24: an implied 45% chance.  

Turning to the Republican nominee market, Donald Trump was last matched for the nomination at 1.12.  This translates into an 89% chance of his securing the nomination.

Let’s do some maths together. These imply that there is a 3% chance that the next President is a Republican who is not Donald Trump. There is, however, an 11% chance that the Republican nominee is not Donald Trump (I’m discounting the possibility that Donald Trump is not the Republican nominee but is the next President – perhaps I’m being too hasty in this ever-changing world in which we live in, but at least Betfair’s “winning party” market makes the same assumption as me).  

Following on from that, part of the 55% chance that Donald Trump is not next President is the 11% chance that he does not get the Republican nomination. If so, that implies that if he clears that hurdle, he wins 50% of the time. A N Other Republican has an implied 36% shot – dismal in a two horse race.

Let’s stop and think about some of those conclusions. Do you think that Donald Trump is a coin toss to beat whichever Democrat he is up against, assuming he gets through the primaries? This does not seem to be conventional wisdom and his present polling position looks weak. If you think that he is odds against, then you should either be backing him to win the nomination or laying him to retain the presidency (or both).

Turning to the Democrat side, there are some real oddities. Andrew Yang has fervent fans and he is this year’s heart-over-head betting sensation. He is unaccountably as short as 25 for the nomination and 38 for the presidency. The price for the presidency is especially silly – it is an implied 65% chance that if he is nominated he will win the presidency. 

Conversely, Hillary Clinton is 55 for the nomination and 140 for the presidency, giving her an implied 39% of the presidency if she is nominated. She’s not going to be nominated but if she were, she would be a better than 39% chance. Nevertheless, all of these prices are clear lays in my view, if your books on these markets permit you the space to do so. Laying Andrew Yang on the next president market and Hillary Clinton on the next nominee market offers particularly good value.

The implied prices make more sense with the front runners. Elizabeth Warren is 3.15 for the nomination and 6.2 for the presidency, giving her an implied chance in the main event if nominated of just under 51%.  

Joe Biden is 4.3 for the nomination and 7.4 for the presidency, giving him a punchy 58% chance of winning the presidency if nominated. Similarly, Bernie Sanders is 7.8 for the nomination and 14 for the presidency, implying he has a 55% chance of winning the presidency if nominated, which is still well above the 52:48 split that the winning party market would suggest.

If you’re uncertain about either of their prospects, you might back them for the nomination and lay them for the presidency (no one is stopping you doing that for both of them).

Most strikingly among the front runners, Kamala Harris is 9.6 for the nomination and 24 for the presidency, implying a measly 40% chance of her winning the presidency if nominated.  That looks nuts. At least one of those prices looks wrong to me. So I’ve backed her for the presidency at 24.

Alastair Meeks




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With the Iowa betting markets now being opened a helpful primer on how its caucuses actually work

Wednesday, August 21st, 2019

Ladbrokes and Betfair have now got markets up on the first big hurdle in WH2020 – the Iowa Caucuses which are scheduled for February 3rd next year. Because of their historical importance and that so many Democrats are contenders this looks set to be a hugely significant day and a very big betting event.

The first thing to remember about them is that only a smallish proportion of Democrats and Republicans actually participate. This time for both parties it might reach 20% of their voters in the state. This is critical because what the remaining 80% think is totally irrelevant and has no impact on the outcome.

That makes polling extraordinarily challenging. Whilst maybe much larger proportions than 20% might tell pollsters they plan to attend their caucus the experience is that the actual turnout level is a lot smaller. Going out for a 7pm event on a freezing Iowan February evening is not something that has wide appeal.

The second thing as to what actually happens is well explained in the 2016 video above.

What we do know is the contenders with good ground organisation who have invested the time in the state tend to perform best. We also know there is the potential for Iowa to throw up big surprises.

Mike Smithson


 



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Trump and the inverted yield curve

Friday, August 16th, 2019

 
2 to 10 year yield spread
 

President Trump would seem to have an advantage over whoever the Democrats select as his 2020 challenger: since the Second World War, nine elected presidents have sought a second term, and seven of them succeeded.

The two exceptions were Jimmy Carter in 1980, and George H. W. Bush in 1992. In both cases, the US economy was performing badly in the lead-up to the election. US voters seem to be indulgent towards their incumbent presidents, but less so if jobs are being lost. In 1980, the Ronald Reagan was able to attack Carter with a memorable line: “A recession is when your neighbor loses his job. A depression is when you lose yours. And recovery is when Jimmy Carter loses his”. In 1992, Bill Clinton’s campaign was similarly focused on the recession then affecting the USA: “It’s the economy, stupid”.

As Trump is fond of telling us, so far the US economy has been doing well under his watch. Unemployment is historically low, and consumer spending has held up well. The long recovery and bull market which followed the 2008/9 financial crisis have continued into his term, boosted by historically low interest rates, tax cuts, and Trump’s sensible decision to make it more attractive for US companies to repatriate foreign profits.

But there is a warning sign flashing a very strong danger signal for the US economy. The graph shows the difference between the interest rates on ten-year and two-year Treasury bonds. Usually this is positive – you get more interest for locking your money away for a long period, but it has just gone negative. Historically this ‘inversion of the yield curve’ has been a very good indicator of impending recession: not only has it preceded all economic downturns since WWII, but also it hasn’t given any false signals, as can be seen on the graph above where recessions are shaded in grey.

What should worry Trump most is that in each case there has been a lag, of around 6 to 18 months, between the curve inverting and the US economy entering recession. If that correlation holds, voters could be casting their votes just as the economy worsens considerably. Given Trump’s dependence on support from blue-collar workers in the central industrial belt, that could cost him his second term.

Of course there is one easy thing he could do to help avoid this. Economists don’t know much, but they do know one big thing: there are no winners in trade wars, only losers. If Trump wants to be re-elected in 2020, he’d better get on the phone to President Li and do a deal to cancel the spiral of competitive tariffs which China and the US are imposing on each other, and which is damaging both economies.

The Democrats should also heed a lesson from history, and especially from Bill Clinton’s 1992 campaign. You don’t win elections by playing to your base and calling your would-be swing voters stupid or racist. You win elections by winning the argument on the economy, jobs, and health-care.

I don’t expect either side will take my advice, though!

Richard Nabavi



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All Eyes on Iowa – the first state to decide

Sunday, August 11th, 2019

If you want to know who the Democratic nominee to be President will be, watch Iowa and New Hampshire. Why? Because it is extremely rare for the eventual candidate to fail to win one of those two two states.

How rare?

Well, let’s look at the history for a second:

2016 – Clinton won Iowa
2012 – Obama won both
2008 – Obama won Iowa
2004 – Kerry won both
2000 – Gore won both
1996 – Clinton won both
1992 – Clinton won neither!
1988 – Dukakis won NH
1984 – Mondale won Iowa
1980 – Carter won both
1976 – Carter won both

The record (for the record) is similar for the Republicans. Now, there’s a good reason for this. In Primaries, fields tend to narrow quickly as voters leave less successful candidates and move to more successful ones. So, if you look at national polling, Iowa winners tend to see eight percentage point bumps in the aftermath – which often leads to New Hampshire victory and then the nomination.

Iowa is a rural state. It’s a white state. It’s a small state. It’s a Christian state. It’s a farming state. It is – basically – not a lot like the rest of America, and it’s certainly not a lot like the Democratic base.

Winning in Iowa requires committed supporters, who are willing to brave the snow and the sub-zero temperatures to go to draughty halls and spend an evening at a caucus. It requires organisation, because in those community centres and churches, people need to be physically corralled.

So, then, who will shine in Iowa?

Well, the polls show a pretty tight race. Averaging the last month’s polls, you get the following:

Biden 22.8
Warren 19.3
Sanders 14.3
Harris 13.3
Buttigieg 11.8

Biden has a small lead over Warren, and then there are three other players all with a shout.

Who has the best organisation in the state? Well, that’s an easier one to answer. Elizabeth Warren does, having senior Clinton and Obama Iowa staffers running her operation. Her operation has also been in place longest, with staff on the ground from early in 2018. Pete Buttigieg has also been using his field topping second fund raising haul to put in place solid Iowa operation. Both candidates have around 100 field staff in place.

Harris and Biden trail with 60-65 staff, albeit with some impressive names on the roster. While Bernie Sanders seems to have been unable to recruit all the people he had in 2016.

All in, what does this tell you? Well, it suggests to me that both Harris and Sanders will struggle in Iowa relative to their national shares. There’s not a lot in Iowa for Kamala Harris: it doesn’t look very like California, and she’s not really a retail politician. And Bernie isn’t looking that hot either. Perhaps because his base skews younger, he struggles to get them out on cold nights in Iowa.

Pete Buttigieg looks like the candidate most likely to spring a surprise here. He’s relatively local, got a large and well organised campaign staff, lots of money, and he looks (demographically) like a typical Iowan. He’s not a favourite by any means, and you’d have to rate his chances below Biden or Warren, but he’s candidate I think has the most room to outperform expectations.

Which brings us to the front-runners: Biden & Warren. Biden has money and the national vote share. But I’d remember that he underperformed terribly in Iowa last time he stood there. Going into the Iowa caucuses, Biden was polling around 5% nationally, marginally ahead of former New Mexico Governor Bill Richardson. He got 1% in the caucuses, and his campaign ended soon after.

Which brings us to Elizabeth Warren. She has the organisation. She’s probably the single biggest beneficiary of any further drop off in Sanders vote. But a little warning too. Elizabeth Warren is a city girl. And Iowa is a rural state. She’s the favourite right now, but that doesn’t mean Iowans won’t find someone else more to their taste down the line.

And from a betting perspective, what does this mean? I think it means you have a tiny flutter on Buttigieg, and you sell Harris and Sanders. Biden looks a little cheap given his position in Iowa. While Warren is probably fairly priced right now. Keep an eye on those Iowa polls, mind. If Elizabeth Warren begins to solidify her position then the race may be closer to done than the national polls suggest.

Robert Smithson



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All could change in the WH2020 nomination race on the evening of February 3rd in the midwest state of Iowa

Tuesday, August 6th, 2019

The betting is clear. Former vice president and 2 times White House campaign failure, Jo Biden, is back as favourite in the betting on the Democratic nomination on Betfair.

It is hard to see any real change here except some of the long shots pulling out of the race between now and the Iowa caucuses on February 3rd next year when business really starts.

Because of their position as being the first state to decide Iowa voters take their role very seriously and pay much greater attention to the race than those elsewhere at this stage.

Iowa with its caucuses always kicks off the White House nomination season with real voters casting real votes for the first time. To have any chance Biden should be aiming for a result there that does not raise any questions over his frontrunner status.

I’ll probably will not make any serious bets on WH2020 until Iowa. If Biden’s ge is going to be an issue it will be Iowa voters who flag this first.

Mike Smithson


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The standout moment of the 2nd Democratic debate and campaign so far – Kamala Harris taking on Joe Biden on race

Friday, June 28th, 2019

My immediate betting reaction after watching the second WH2020 Democratic debate was to place a bet on California Senator, Kamala Harris for the nomination.

Her confrontation with ex-VP, Joe Biden, seen in the clip above, is the one that is being focused on by the US media and will surely be repeated time and time again. As can be seen it was personal and powerful and demonstrated her powerful communication skills. It also exposed the frailty of the front runner and current favourite, ex-VP Joe Biden.

Whether it does more damage to the 76 year old Biden than it benefits her we will have to wait and see but it will certainly reinforce Harris as a key contender in a party that is desperate to find someone who can defeat Donald Trump in November next year.

This was the overall verdict of Taegan Goddard of Political Wire:

“Only Kamala Harris and Pete Buttigieg improved their position in the Democratic presidential race tonight. Both were prepared and very clear in explaining why they were running and what they would do as president. But most important for Democrats, both play to win. They would be formidable competitors to Donald Trump. If I had to pick a winner, it was Harris.

The most experienced candidates on the stage — Joe Biden and Bernie Sanders — significantly underperformed expectations. They weren’t terrible, but they likely lost ground tonight. The remaining six candidates were incredibly weak.”

Mike Smithson


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Warren moves above Sanders in the fight for the WH2020 Democratic nomination

Wednesday, June 12th, 2019

Now she’s got to overhaul Joe Biden

While all the focus in the UK has been on the CON leadership race there’ve been significant moves in the fight for the 2020 Democratic nomination. This comes as the many contenders, there are more than 20 of them, focus on the first national TV debates between the hopefuls later in the month. These are seen as the formal start of the campaign.

Until now just about all the polling has had former VP, 76-year old Joe Biden with a clear lead over 77 year old Bernie Sanders who out-performed expectations in the fight against Hillary Clinton for the 2016 nomination.  These two men, of course, have high name recognition and many argue that it is this factor behind their ratings.

Now a new YouGov national poll  shows  Massachusetts Senator, Elizabeth Warren in second place, behind Joe Biden who leads by 27% to 16%.  Sanders is further behind at 12%.

This is broadly in line  Quinnipiac University national poll that has Warren competing strongly for second place with Sanders.

What has marked out the Warren campaign has been the heavy emphasis on policy rather than just broad platitudes.

Whatever the race will look very different  in the autumn.

In the betting Betfair has Biden as a 30% chance with the Oxford-educated, Pete Buttigieg now in second place on 14% with Sanders and Warren close behind.

Mike Smithson