Prediction Markets Give Trump a November Surprise
His spread over Harris is vanishing, while Iowa hasn't been under the lights like this since ‘Field of Dreams’
Down to the wire.
Photographer: Sarah Rice/BloombergTo get John Authers' newsletter delivered directly to your inbox, sign up here.
Some truths are eternal, no matter who said them. Whether it was Niels Bohr, the Nobel Prize-winning physicist and atomic pioneer, or Yogi Berra of the New York Yankees who first uttered these words, they’re true: “Prediction is very difficult, especially if it’s about the future.”
This week’s US presidential election seems so important that it’s natural that people will try to predict the result or find some kind of indicator to hold on to. For centuries, political prediction markets have sprung up to fulfill this need, and it’s happened again. Several new ventures to allow trading of political futures have been launched in the last few weeks. Moves on the different markets has been odd at best, leading to claims of manipulation. And just as it’s eternally difficult to predict the future, it also seems to be a fact that markets overshoot. That’s what just happened.
Starting early in October, the major markets all showed a steady growth in Donald Trump’s chance of victory. This was led by the offshore Polymarket, with the aid of a series of large purchases by a Trump “whale” (and a brief blip caused by what appears to have been a Kamala Harris whale). Then came Trump’s rally at Madison Square Garden a week ago. That changed the narrative. The PredictIt market, where political junkies take limited positions, began reeling in his odds. Polymarket, always more bullish about Trump, followed.