Sep 13, 2008

US Election – The Rational Realignment.

Something has always struck me as a little absurd about the Democrat's Intrade probabilities - they never quite matched up with their polling. There was always this whiff of a bull mark

Possum Comitatus — Editor of Pollytics

Possum Comitatus

Editor of Pollytics

Something has always struck me as a little absurd about the Democrat’s Intrade probabilities – they never quite matched up with their polling. There was always this whiff of a bull market, an Obama bubble, pushing the Democrat prices higher than their polling levels would ordinarily justify.

It wasn’t absurd in terms of being irrational – far from it; the Democrats were expected to do well and the polling was expected to catch up and reflect that. But as the campaign has worn on, and the time available in the future for these expectations to precipitate into reality has become shorter, those expectations have suddenly become T-boned by the sudden necessity to pay much more attention to the present conditions on the ground, rather than relying on hopeful postulates of what will happen just around the next corner – especially as the corners left on the journey to 538 have become substantially fewer in number.

No, the absurdity came from the unidirectional nature of these inflated expectations, the uber-confidence that the only alternative possibility to the current political reality at any given time in the previous six months was a pro-Democrat one.

Since the conventions the Obama bubble, the Democrat bull market, the assumption of the only alternative political reality being a pro-Democrat reality has not quite been swept away, but a great rational realignment has certainly imposed itself on the US political system.

If we look first at how many Electoral College votes the Intrade market had given to the Democrats over time as well as the headline “Democrat as President” Intrade probability, we can clearly see the post-convention wake-up call.

The probabilities and the ECV’s on the Intrade markets have walked pretty much in lockstep. But to see how the expectations have deflated, and how high they were for the Democrats previously, we only need to compare the Democrat margins in the Gallup daily tracking poll to the probabilities of victory they had for any given time.

In May, Obama was trailing McCain by a larger margin than he is currently – but the expectations that it would turn around kept the probabilities high. Likewise, the dead heat of mid August in the polling was still expected to be of only marginal relevance.

Yet post convention, suddenly margins matter.

The Democrats are still given the benefit of the doubt – if all things were equal on the expectations front, a zero margin would equal a 50% probability of victory. The Democrats are behind by three points in the polls, but less than 1 point behind in the headline probability and still two and a half points ahead according to our State market simulations.

The market still expects the Palin led Republican bounce to fade, but those expectations are now much more firmly based in reality. Since August 31, I’ve been tracking the Intrade markets daily and we can see how the rational realignment played out and how the polling reality suddenly became important.

This time, for the first time, as the Democrat polling margins fell, expectations alone could not keep the Intrade probabilities up in either the headline market nor the State markets. We can also see that the Republic bounce has seemingly peaked, and that the markets still expect that the polling margins will come back toward Obama – but these expectations are now much more firmly based in the reality on the ground, rather than the hope driven expectations of the past.

For our Intrade market analysis – finally it is Game On.

(Visited 1 times, 1 visits today)


Leave a comment

9 thoughts on “US Election – The Rational Realignment.

  1. vote2brendan

    I suspect the Palin bounce is due to disillusioned evangelicals who couldn’t be bothered voting for McCain (the least conservative Republican nominee in living memory) being reinvigorated into
    Voting for McCain/Palin. I’d just like to know what the hell are moderate voters going to think about Palin being willing to declare war on Russia and Iran, I think the Democrats should run with that, i.e. the repugs are gunning for more wars …

  2. Thomas Paine

    I am guessing that the McCain convention bounce was mostly a Palin bounce. There is sufficient time for the Palin novelty factor to wear off and for people to begin to understand what she really is, in terms of being a potential VP & P.

  3. Grog

    Possum (first off good luck with the new site – seems to be working very weel thus far)

    I hope you’re right about it being Obama’s to lose.

  4. ecky

    Be interesting to see how The Kid’s much vaunted grassroots organization reacts to recent poll and Intrade reverses. Could be just the rev-up they need to ensure a monster turn out in the must-win states of IA, CO, and NM, and to help buffer all the marginal States Kerry won in 2004 where Mc Cain has made ground this month.

    Win those three and hold the rest and he’s in like Flynn. All else, while worth fighting for with fang and claw, is cream.

    All the best with your new site, Poss, teh furry avatar lives on!

  5. Possum

    In States with large amounts of young voters/black voters/educated voters – Obama tended to win by margins larger than the polls were suggesting in the Primaries. Yet in States which had large proportions of working class Democrats, older Democrats and uneducated Democrat voters he tended to do worse than the polls suggested. in their archive will have a lot of stats about that somewhere if you’re interested.

    The thing that get’s me about the polls at the moment is the enormous uncertainty involved not only over the likely/registered voter split, not only the use of party identity in the pollster’s weighting and how it’s becoming mostly guess work, but also how nearly 20% of Obama’s biggest demographic – young people – don’t have land line phones and can’t be polled properly.

    If anything, the national tracking polls probably underestimate the Democrat vote slightly and have all year (which was certainly the case in the primaries).

  6. tomd

    The Gallup numbers have always been only a very loose guide. I’d be much more interested in a Gallaxy-style poll taken across the toss-up states, or decent, regular state polls in those states.

    I know the Dems are hoping for a big turnout – it was the way Obama won the primaries – but it isn’t clear to me how well that gets reflected in the polls. Anyone remember how accurate the polling was in the primaries? Specifically Clinton vs Obama numbers?

  7. Possum

    It’s Obama’s to lose Andos.

  8. Andos

    So does that mean Obama’s going to win?

  9. Last Post at old address for RSS feed readers « Possums Pollytics

    […] Latest post at the new site: US Election – The Rational Realignment. […]

Share this article with a friend

Just fill out the fields below and we'll send your friend a link to this article along with a message from you.

Your details

Your friend's details