The Wall Street Journal has an excellent article today by Professor Justin Wolfers on Using Markets to Handicap Iowa. Obama is the favorite to win the Democrat vote with Romney and Huckabee neck and neck for the Republicans. Justin Wolfers shows that the markets are an excellent guide to election season.

But steady on says Brett Arends, also at the Wall Street Journal. He notes:

Markets are fascinating. I’m as absorbed by political betting as I am by the stock market — right now, maybe, more so. The prices tell stories. They contain wisdom and folly, clues and surprises. Respect them, by all means. But don’t revere them. The “crowd” isn’t always right.

Both authors note some drawbacks with the current markets (low liquidity and potentially absence of smart money). Either way the election kicks off today and it is going to be one exciting race.

Hat tip to Midas Oracle.

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Tags: 2008 presidential election, huckabee, obama, prediction markets, Predictions, romney

This entry was posted on Thursday, January 3rd, 2008 at 4:42 pm and is filed under Predictions. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.