A prediction market is a market where users trade on the outcomes of future events. One of the side benefits of the market is that it produces highly accurate forecasts that have been proven to be better than the polls.

Since the two party candidates were selected, Hubdub has had a market on who will be the eventual winner of the 2008 Presidential Election. Over the past couple of months we’ve noticed an interesting correlation between the McCain’s price (which is his % likelihood of being elected) and the S&P500:

As I write this the S&P 500 has dropped 42% from its historic high and is trading at 907.84. McCain’s likelihood of being the next president is currently trading at 14%. Voters have made it clear they have more faith in Obama in handling the economy and unless there is a dramatic and unprecedented economic improvement, November 4th will be the closing bell on McCain’s presidential ambitions.

Popularity: 9% [?]

Hubdub’s Hot Predictions this week, as decided by Hubdub users and staff, are selected based on their newsworthiness for the week. These stories are bound to be big news this week - and we have forecasts on how they’re likely to turn out.

The Credit Crunch

Two weeks ago we were predicting whether the DOW would drop below 10,000. Shortly thereafter the market dropped right through that mark. Now as the DOW just tries to stay afloat the question lingers, have we seen the worst of it? Sadly Hubdubbers doubt it’s over, forecasting the DOW will close below 7,000 in 2008.

What will be the lowest close for the DJIA in 2008?

We’ve all heard the rumors about a GM Chrysler merger but at first it didn’t seem possible. As the markets worsen though, this deal seems more and more plausible. Companies like GM are on the edge of an abyss, falling SUV sales and a failing economy are pushing this merger, but will it happen? For now 60% of Hubdubbers still think it won’t.

Will GM and Chrysler be announced to merge before December 15?

The markets are rebounding right now, after world leaders announced more plans to rebuild the broken financial markets. The start of this week looks good in comparison with the last two weeks where stunning losses were followed by only more stunning losses. As the weeks moves on though can they continue their rebound or will more bad news lead to more losses?

Will Dow (DJIA) close up the week Oct 13-17?

The Election Heats Up

Is John McCain your friend? If you’ve been watching him recite ‘My Friends’ this and ‘My friends’ that you’d think he’s the most popular person in the world. For Wednesdays debate look forward to more ‘My Friends’ this and ‘My friends’ that, as Hubdub forecasts McCain says ‘My friends’ more than 12 times. Phew, that was 5 ‘My friends’ right there!

3rd Presidential Debate Oct 15 — How many times will McCain address the audience as, “my friends”?

It seems the one person being helped by the financial crisis is Barack Obama. Since the DOW crash Obama’s lead in the polls has grown exponentially. If Obama does win, Hubdub users forecast there’s a 48% chance that he wins in a landslide, getting at least 2/3 of the electoral votes.

Will Barack Obama win a landslide victory (at least 2/3 of electoral college votes)?

World News

Can a country go bankrupt? The answer is yes if a government defaults. Following Iceland’s nationalization of its banks, some have alluded to the possibility of national bankruptcy. Fortunately Hubdub users give Iceland only a 25% chance of bankruptcy in the near future.

Will Iceland be officially bankrupt by the end of the year?

Canada’s not usually known for political violence. Although, recently some Liberal party supporters have awoken to find their car brake lines cut. The vandalism is being investigated by police. Although hubdubbers doubt anyone will be arrested, giving only a 21% chance of arrests being made.

Will any of the brake-line cutting vandals of Toronto Liberal supporters be arrested?

Sport

Instant replay has been around in the NFL for a long time, but just this season it’s been introduced into the MLB. With the biggest event coming up this month, Hubdub users are forecasting by 60% that instant replay will be used to determine or challenge a call in the World Series.

Will instant replay be used to determine or challenge a call in the 2008 World Series

Odd Stuff
There’s the Olympics and then there’s the the World Mind Games. For armchair generals the Beijing Mind Games offer an array of brain strengthening events in bridge, chess, draughts, Go and Xiangqi. It’s a chance for those who were never really  popular in high school to regain some self esteem. Home ground advantage seems to be proving true as Hubdubbers predict Asia tops the gold medal tally.

A country from which region will top the gold medal tally at the World Mind Games?

Entertainment

In one swoop Tina Fey saved Saturday Night Live from cancellation. As Sarah Palin Tina brought in swathes of new viewers. In the final days of the election rumors are abound of a joint Sarah Palin, Tina Fey SNL appearance, but will it happen? 75% of Hubdubbers forecast it will.

Will Tina Fey and Sarah Palin make a joint appearance on SNL prior to the November election?

Popularity: 16% [?]

Here at Hubdub we often like to compare our forecasts with what the polls are saying. So for tonight’s debate we are comparing a poll from Sodahead with the equivalent Hubdub market.

Sodahead

Poll Answers

Hubdub

2nd Presidential Debate Oct 7: Who will be declared the victor by CNN polling? (Extended Suspend)

Popularity: 6% [?]

Since being announced as the Vice Presidential candidate for John McCain one week ago, Sarah Palin has left an indelible impression on the market and the presidential election. On the morning of the August 29, just before McCain announced his VP, his chances of becoming the next president were sitting at 33%, with Obama clearly the favourite at 62%. By the end of the day of the announcement of Palin’s appointment, the heat was on this market with McCain’s numbers rising to 35% but matched by Obama’s rise to 64%.

When rumors that the Palins’ fifth child, Trig, was potentially Palin’s grandchild and the subsequent explosive revelation that 17 year old Bristol Palin was expecting, McCain’s forecast dropped to a market low of 17%.

However, since then, the market has proved that we all love a scandal and a woman who can give a good speech. After Palin’s RNC address on September 3, McCain’s forecast was boosted back to 44%.

Currently, the market forecasts McCain as having a 48% chance of becoming the next president, Obama 58%. Palin has reduced the gap between the two frontrunners to one of the tightest margins since the beginning of the campaign - so far, she appears to be a winning pick by McCain.

Who will be the next President of the U.S.?

Popularity: 9% [?]

Perspctv is a new election dashboard that tracks the web for sentiment favoring Obama and McCain. All the data is pulled together into a very attractive dashboard that lets to explore current sentiment and trends. Previously they tracked polls, news mentions, blogosphere mentions, Twitter mentions, Electoral-vote.com, candidate website daily reach and Google search volume. All those metrics are fairly unanimous in favoring Obama with him getting around 85% of Twitter, News and Blogosphere mentions.

Today Perspctv has now also added Hubdub forecasts to their dashboard. Currently Hubdub is forecasting Obama to pick up 298 electoral votes which is ahead of the Electoral-vote.com projection of 275. Check it out and let me know what you think. (Perspctv works of an API to our election data. If you are a developer and would like to use that data then get in touch.)

Popularity: 7% [?]

Image via Wikipedia The market on who will be Obama’s choice for VP has been incredibly active over the past couple of months with 465 public predictions being placed on it. Over time Tim Kaine, Evan Bayh and Joe Biden have all been slim favorites (according to the market Hillary never really left the starting blocks). However in the past few hours their has been a very pronounced shift in support to Biden making him the strong favorite, currently forecast at 77% likely to be Obama’s pick.

Checking the other exchanges shows that Biden is 2.14 with Betfair (which equates to about 45%) and 36% with Intrade so he is definitely the favorite. However, do Hubdub users have more inside information than most? We’ll soon find out

Who will be Obama’s choice for VP?

Popularity: 5% [?]