After over a month tracking the predictions of some of America’s top pundits, today we are launching PunditWatch. TechCrunch covered the launch.

Bear Sterns is doing just fine shouted Jim Cramer just before they got bought by JP Morgan for $2. Google could hit $2,000 claimed Henry Blodget of Silicon Alley Insider just as their stock price peaked and started its long slide to under $500. Hillary Clinton is going to lose in New Hampshire claimed just about every commentator before her dramatic come back.

These are just some of the examples the recent examples of ‘experts’ failing miserably to predict future events. But we still listen to them. Are these isolated examples or does the seer/sucker theory hold true (”No matter how much evidence exists that seers do not exist, seers will find suckers”)?

The Pundits

Well now we will find out. PunditWatch’s mission is to track the predictions of public commentators to see how they perform. Initially we are going to select 10 commentators from the fields of Politics, Entertainment, Sport and Technology. The pundits are:

• Politics: Chris Matthews (MSNBC), Pat Buchanan (MSNBC, NBC), David Brooks (PBS, NYT)
• Entertainment: Perez Hilton, Nikki Finke (Deadline Hollywood Daily), DListed
• Sport: Peter King
• Technology: TechCrunch, VentureBeat, Silicon Alley Insider

There were plenty more we wanted to add but after exhaustive investigation we found that they don’t ever in fact make any real testable predictions. We do however plan to add a second wave of pundits to this list so do comment with your suggestions.

How it all works

We have created a Hubdub account for each of the pundits (for example the TechCrunch user id is techcrunch_pw).

1. Every Monday morning we will post up a round of all of their previous week’s predictions, a look at their performance and also a call for readers to be on the look out for them spotting new predictions.
2. During that week each time a pundit makes a prediction we will place H$10 on it from their Hubdub account.
3. If the question doesn’t exist we will create it with an estimate of the correct probabilities. We will then invite some of the top Hubdub forecasters to make predictions in order to set the prices. Then when the prices have settled down we will place a prediction for the pundit from their account.
4. We will update the PunditWatch blog with a post to say that the prediction has been placed.

Pundits can make anything from zero to three predictions per week. If they make more than three then we will ignore the later ones. After analysing many of these pundit’s predictions it is clear we are going to have to give some interpretation to their predictions to make them testable (hey, if they don’t like that then they can just start making real concrete predictions!). We will have to feel these out as we go along. One point is that if a pundit reports rumors then we will treat these as a prediction. If they don’t think the rumors are likely to be true then why report them?

Click here to check PunditWatch out.

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By Ryan (Politics Category Editor)

I’m really tired, I’m worn out and I’m done! Since the end of the Reverend Wright issue last month the Dem. nomination process has taken its toll on me. For weeks all we’ve heard are back and forth arguments between Obama and Clinton. Unfortunately these arguments haven’t been on substantive issues. All they’ve been are petty blame games and tattle tale politics.

For these passing weeks all I’ve seen on the politics pundit roundup are commentators regurgitating the same thing they said a day ago. The news cycle has become so bland that turning on the TV gives me a headache. My mind now swirls in a swath of punditry gone bonkers. The reason? There exists a lack of political events to report on, which in a way is a good thing.

Americans can take a break from the polarizing campaigns to worry about more pressing issues like the dwindling economy, a bad war gone badder or hefty fuel prices. Sadly for someone like me and many other political hooligans we are addicted to the game of politics. So even though no actual events like a primary or debate have occurred a need still exists to stay in touch with election politics.

But this treachery must stop! I’m going nuts with all the useless political commentary from moderates, liberal and conservatives. Can’t we just take a break?

There is no need for much more than a whisper of punditry or commentary. All I want is to just get to Pennsylvania already. It’s been a long and agonizing wait and Pa. is only a week away now. There’s no need for any commentary. All we have are “if she wins” or “if she loses” or even more dreadful “if she wins by less that 5%.” It’s just gotten boring, we won’t know anything until the Pennsylvania primary on the 22^nd, because everything depends on that date. We can’t say “if she wins Indiana” until the judgment of the Pennsylvania electorate. So if your like me and you’ve just gotten a little sick of it all, just relax. Go watch some Battlestar Galactica for a good political melodrama or discuss something important like the rising price of rice. But for gods sake don’t watch, read or listen to the replicated nonsense of pundits until after Pennsylvania!

Things to do until Pennsylvania:

Predict who will win the Pa. primary?

Predict who will be the Dem. Nominee?

Predict who will be the next President?

Predict which Dem. candidate will win the female vote in Pa.?

Or my personal favorite, predict who’ll last longer, Robert Mugabe or Hillary Clinton?

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By Ryan (Politics Category Editor)

Every day the intensity of the attacks brought upon Hillary Clinton increase. We hear how she’s behind in the popular vote as well as the delegate count. And we hear how the possibility of regaining a lead in those categories get slimmer by the hour. But those statistics won’t be the straw that break the camels back. So what will be?

The answer is the media. We’ve seen the SNL skits and watched Clinton’s complaints but the media bias has continued. Oddly enough though, the bias shouldn’t be laid at the medias feet. In fact the only one responsible for the bias is Clinton herself. But why is this the case?

Well, if politics is a game, albeit an important game Clinton’s loss in the primaries have occurred because she hasn’t played the game well enough. The mistake of setting herself as the established nominee and initial mismanagement of Bill were examples of errors that gave the media a narrative of failure and elitism. When inklings of this bias first developed the campaign should have stomped them out, instead the narrative simmered and grew until it was to extensive to be put down. By the time Clinton’s complaints were aired the narrative had been set. Clinton can comeback, resignations like Penn’s won’t help but the media always likes a underdog. It’ ain’t over till it’s over!

So in an era where electronics rather than paper are the medias medium which source has the least bias? After months of statistical study, 5,000 interviews and gigabytes of hard drive space I have the answer!

It’s Complicated

I’ve looked at the three main American news outlets. FOX, MSNBC and CNN. While most would throw FOX right out the window and let it simmer in its own urine, I think I’ve been a bit more subdued. FOX for all its faults covers Clinton at times reasonably well. Whether this is a “right-wing” conspiracy or a weird twist of fate I leave up to you…

MSNBC on the other hand offers a much more left sided perspective. If you watch Chris Mathews or Keith Olbermann the slant towards Obama is noticeable and at times repetitive and annoying. I must admit though that MSNBC is my favorite station for politics. The reason being that MSNBC out of all the other stations seems to have the most in depth political commentary and best shows. Hardball (besides Mathew’s Obama tainted slant) is full of good analysis and punditry all week long.

Onwards to CNN. Out of all the three broadcasters CNN is the most objective. It has a good right left split and lacks the core subjectivity that MSNBC and FOX bring along with broadcasting. Unfortunately you can’t have your cake and eat it to. The problem with CNN is that at times it seems too childish. In trying to reach as many viewing markets as possible CNN cuts down on the complexity of politics and simplifies everything. When watching CNN I want to shout “where’s the analysis, where are the pundits!”

So which should you choose? I can’t endorse one outlet or the other because although I watch MSNBC the most, I religiously watch all three. If your really a political connoisseur you should watch all three. Yes they all come from different colors of the spectrum, but if you want to understand the complexities of American politics and create your own informed opinion you might as well get informed by multiple sources.

Related Questions:

Which site, MSNBC or CNN will have more visitors by June?

Who will win the Pennsylvania Democratic Primary?

Which Democratic Candidate will have the most delegates going into the convention?

Will Hillary Clinton regain the lead in the popular vote by the convention?

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By Ryan (Politics Category Editor)

With the recent upsurge in violence in Iraq and the visible inability of the Iraqi Army to clamp down on Shia militias in Basra and Sadr City, Iraq is still a tense and brutal environment. The power to control the multi-faceted nation has not yet been resolved and the sectarian struggle for true representation is now hampered by more conflict within the religious and political factions vying for control.

But for Americans while the cost of the war grows, its impacts on the presidential campaign present a danger to the GOP, or do they? How has the Mahdi Army violence effected McCain? Well heres a surprise, it really hasn’t. McCain’s price hasn’t really changed since Maliki began his campaign in Basra on the 24^th, as evidenced by his price on Hubdub. Shown here:

So how has a upsurge in violence not decreased McCain’s price?

Some may say that the violence now ensuing southern Iraq and Sadr city is just between Iraqi’s. Therefore it lacks major US involvement on the ground. Unfortunately this analysis lacks the images of a smoke obscured Green Zone under mortar and rocket attack. Not to mention the deaths of US citizens within the Green Zone. It’s true that US involvement in the recently launched campaign against Shia militias is very limited, but the violence has been widely reported in the US media. So what gives? Why would a supporter of an unpopular war, from the party of an unpopular President be able to to stay so high in price?

How about the economy? With a slide into recession still front page news maybe McCain’s more conservative economic policies are holding sway with voters and overwriting opposition to the war, maybe, just maybe. Even if Iraq looks dreadful voters are overlooking that constant reality and worrying about their wallets. Keep in mind the ever wise theme “it’s the economy stupid!” Even if McCain’s conservative economic policies aren’t a hit with voters, the importance of the economy is still overshadowing Iraq. Voters can’t pay attention to a war in a far away country when their pocketbooks are in peril. The war has become so ingrained that the violence there is now an afterthought.

So is Iraq no longer a hinderer for the GOP? Certainly not! Even if McCain isn’t faltering due to the current violence in Iraq, the amount of bad feeling that the war has caused will stick with him throughout this election. The election was the Democrats to lose and increasingly in what was a surefire Democratic win the prospects are much more even. If the Democrats lose this election the November 5^th New York Times headline will read “Blown Opportunity!”

Heres to hoping this campaign was going to be short and sweet…..

Related Questions:

Who will win the Presidential election, Democrats or Republicans?

Who will be the next President of the US?

When will the US pull out of Iraq?

Will the cease-fire order between the Mahdi Army and Coalition and Iraqi forces be rescinded by May 31st 2008?

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By Ryan (Politics Editor)

After 11 straight losses since Super Tuesday, the Clinton campaign is on the ropes. Though it may be depressing for Clinton supporters to face, the possibility of her dropping out after March 4th is very real. The inspiration of New Hampshire might still reinvigorate hope of a comeback in some, but even if Clinton manages to bag Ohio, dropping out may be her best course of action.

It is said that money makes the world go round, and in political campaigns no truer words are spoken. Contributions to Obama in recent months have filled the coffers and due to this Obama currently trounces Clinton in advertising. Especially in Texas where Obama is dominating the airwaves. News forecaster, Hubdub is predicting that the chances of Clinton winning in Texas are slim. Hubdub and others like it have been accurate predictors of the primaries so far.

But why should she drop out? Yes she’s losing primaries, yes she’s losing money, but why should she really dropout? The answer is Nader! Yes that wily 60 something year old is at it again. He ruined Gore and now he’s ruined Hillary. It would seem the outspoken consumer rights activist really has something against the former Clinton administration…

So how is this possible? Well, we can all agree that to a certain extent Clinton is a more divisive candidate than Obama. If Hillary were to run against McCain in 2008, the Nader factor would come into play. In a divisive campaign Nader pulls votes from Democrats, not Republicans. With Hillary only winning by the slimmest of margins in match ups against McCain, Nader’s siphoning of Democratic votes would turn an already polarized electorate lethal. Clinton would not be able to get enough votes to beat McCain due to Nader. In tight states like Florida, McCain would win by the smallest of margins, but he would still win.

Thinking tactically, Democrats, which ever candidate they favor, should support Clinton dropping out after March 4th. Not because of her policies or her message but because of the baggage carried with the Clinton name. This divisive factor compounded by Nader’s siphoning are to blame. With Obama, it’s more likely Republican votes can be stolen. Additionally independents, usually a mainstay of McCain, have shown increased support for Obama. To ensure a rerun of 2000 doesn’t occur Democrats must think about the most plausible way of winning, and as of now that way is Obama.

Track Clinton v McCain in a head to head: If Clinton is nominated, who will win the Presidency?

Track Obama v McCain in a head to head: If Obama is nominated, who will in the Presidency?

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The Clinton win in New Hampshire wasn’t only bad for Obama, its also given commentators an opportunity to knock prediction markets. New York Times has a go, as does Slate.

The problem is when the commentators read the markets and deduce that the market is predicting the favorite is the one that will win. However, the great thing about markets is they state the probability with which they make their predictions. And Obama with a 90% chance of winning means that one in ten times he won’t. Desert Vision won the 3:40 at Musselburgh this afternoon. The odds where 25/1 implying around a 4% chance. Does that mean the market was wrong? No, 25/1 shots tend to win around 1 in every 25 races (actually a bit less often due to the bookmakers margin). That just happened to be one of those races.

Basically, the ‘prediction markets where wrong’ commentators are like a bunch of punters at the race track complaining that the market wasn’t right every time the favorite doesn’t win. (In fact they should go to the race track for a probably expensive but very educational day out!)

Chris Masse is diligently following the story at Midas Oracle and the Silicon Alley Insider gives a nice analysis. Of course the only way to measure whether markets are accurate is to look at them over a number of events. Caveat Bettor is keeping the score on the primaries and it is prediction markets 3, Zogby 1 (with one 2-way tie and one 3-way tie).

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In financial markets there is strong evidence to suggest that news gets priced into markets within 15 minutes of its release and sometimes even more quickly. Recent research into prediction markets suggests that they aren’t nearly as efficient with researchers from University of Pennsylvania showing that prices on IEM can be predicted using public news flow.

Doing a simple analysis of some the key events in the 2008 Presidential Elections against prices on Intrade shows that on discrete events there is a clear relationship between prices and news flow. However over longer periods the relationship is not always clear.

On the 4th of March CBS announced the results of a straw poll conducted at the conservative PAC convention in Washington DC. They picked Romney as their favourite. Romney’s price on Intrade lifted immediately where it stayed for about a week.

On the 11th of April the Fred Thompson revealed on Fox News and ABC Radio that he had been diagnosed with non-Hodgkin’s lymphoma nearly three years prior. The New York Times and other publications picked up the story the next day. Looking at his price chart shows he opened on the 12th of April at 19 but then closed at 15. The next day he opened at 11.2 but then closed at 17, as the story died down.

In both these cases, the news stories the media considered to be the important ones correspond with the news flow that traders thought was important.

However, the most interesting market movement of the year must be the Obama August slide. On the first of August Obama opened on Intrade at 35.5 but by the 24th of that month he had slide to 17.2. He continued sliding hitting a rock bottom of 10.7 on the 14th of October. 

The question is what was the news flow on Obama from the 1st of August to the 24th of August? Analysing the news articles in the New York Times suggests a disconnect between what was reported and how the market was reacting. Obama started August badly with a bungled comment on use of nuclear weapons. 

Additionally, his continued line that stabilisation of Iraq had been a ‘complete failure’ may also have cost him some points.

However in sum these news items don’t seem to correlate with an 18 point slide. This could lead us to two possible conclusions:

1. The New York Times didn’t report the most market sensitive news affecting Obama in August
2. Obama was over-sold in August and his price did not reflect his true value

I would love to hear your comments on the analysis in either the comments below or email me to nigel [~at~] hubdub [~dot~] com.

 Nigel

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