Archive for the 'Betting' Category

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Is it now the left who bet with their hearts?

Friday, April 15th, 2016

Con Majority

It always used to be the received wisdom that rich over-optimistic Tories were responsible for keeping the Conservative price short and their seat spread high. Famously one such Tory lost over £100k in 1997, because of his faith that John Major would not do as badly as he did.

But there was little evidence of this effect this time last year; punters seemed to be guided more by opinion polls and by the various models driven by them. The bookmakers and Betfair Exchange were generally slightly more pro-Tory than most models, which could suggest a slight Conservative bias (or more likely a scepticism about the polling). Nevertheless the Conservative majority drifted and drifted, going off around 14/1 on the day itself: plenty of people prepared to risk thousands for a 7% [or less, with the bookies] return on the inevitability of a hung Parliament.

So the old rules no longer seem to apply, Alastair Meeks’ Sunday piece notwithstanding.

Indeed, looking at Betfair now, the two most stand-out “wrong” prices are to my mind those about the standard-bearers of the new Old Left: Bernie Sanders and Jeremy Corbyn.

Bernie Sanders is 15.0 (6.7%) to be Next President. He has already all but lost to Hillary. Even if we very generously give him a the 10% chance of winning the nomination that Betfair does (9.8), it requires a touching faith in hypothetical match-ups to give the aging Vermont socialist a 65%+ chance of winning the general, even with the Republicans in such a mess. If the FBI derail Hillary – which I reckon is the only way she can lose the nomination – Joe Biden might yet be better placed to snatch the prize. I wouldn’t touch the 15.0 with a bargepole.

Even more ludicrously, Jeremy Corbyn is trading around 7.4 (13.5%) to be Prime Minister After Cameron. This eventuality requires three things to happen, so can be thought of as a treble:

  • Cameron has to not step down before the election (generously: 20%, bearing in mind both the EU referendum but also the eclipse of his preferred successor)
  • Corbyn has to make it to the election (50-50 according to Paddy Power, but let’s be uber-kind and say 60%)
  • Labour have to win enough seats (not necessarily most seats) to make installing Corbyn realistic – let’s optimistically say that’s a 6/4 chance (40%).

20% * 60% * 40% = 4.8%†, which equates to about 21.0 on Betfair, and I was being generous at every turn. I wouldn’t touch the 7.4 with your bargepole.

Perhaps I’m being unkind in suggesting it’s the left generally betting with their hearts: this seems to be something that happens at the cult-like fringes of politics. We saw the same happen with Ron Paul in the USA, and plenty of UKIPpers were backing their party to win 50+ seats right at the close of the campaign last year, even while the party themselves were only seriously targeting half-a-dozen.

But when there’s irrationality in one part of the market, there’s value elsewhere. Sometimes it takes the shape of 1/2 shots like Hillary Clinton; sometimes 11/1 chances like Theresa May. Good luck, however you bet!

Tissue Price

† The latter two are positively correlated: Corbyn’s [arguably!] more likely to make it to the election if it looks like he might win. But they’re negatively correlated with #1: Cameron’s more likely to go in such circumstances. For the sake of argument I’ll assume they even out.



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REMAIN moves back up a touch after busy day on the referendum markets

Monday, April 11th, 2016

£107,798 of bets matched on Betfair alone



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Alastair Meeks looking ahead to the GE2020

Sunday, April 10th, 2016

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The Tories are evens to get an overall majority in 2020. Why? asks Alastair Meeks

We’ve been here before.  We languish under a Conservative government with a tiny majority, distracted by a frenzied and incomprehensible internal argument being conducted in raised voices over the EU (a subject about which the public largely do not care), staggering from wholly avoidable crisis to wholly avoidable crisis.  The public rightly see the Conservative party as horribly divided.  Disquiet is growing about their basic competence.

The last time we were here, in the mid-1990s, the Conservatives found themselves pulverised at the next general election.  It took them a decade even to become competitive again.

Yet the markets are clearly expecting something radically different this time.  The Conservatives are evens to get an overall majority next time, with no overall majority available at 7/4 on Betfair and 6/4 elsewhere.  Why?

Lots of different reasons why the Conservatives are bombproof next time round have been floated but they fall into three broad categories.  Let’s look at each in turn.

The state of Labour

Whenever any discussion takes place about why the Conservatives, despite all their troubles, look set to cruise through the next election, sooner or later the subject of Labour’s own chaos comes up.  Jeremy Corbyn has not exactly yet achieved universal acclaim as a natural leader and a large part of his Parliamentary party is in more or less open mutiny against him (or, as the leader’s own camp would put it, “core group negative” or “hostile”).  Many Conservatives believe that they could put any of their MPs blindfolded against him and still romp to victory.

That is far too complacent.  Conservatives seem to have forgotten that last year they won only 37% of the vote against an opposition leader who did not impress the public.  They achieved that unexceptional tally with a popular and charismatic leader and a broadly united party campaigning on a disciplined (if uninspiring) prospectus.  At the next election, they will have a new leader of what may well be a divided and indisciplined party.  In 2020, the Labour party may look in worse shape than in 2015, but so will the Conservatives.  It is far from clear that the deterioration on the red side will look worse than that on the blue side.

Moreover, it overlooks the following points.

  1. Jeremy Corbyn may be replaced. Right now that doesn’t look too likely but you never know.  Almost any other Labour MP will impress as leader by comparison.  If the Conservatives look tired, feckless, divided and crazy, that new leader would probably get a remarkably good honeymoon.
  2. Labour aren’t the only moving part. It is quite possible that the referendum will give a shot in the arm to UKIP, who will be looking to hoover up Leave supporters who feel uncatered to by the major parties.  Even if UKIP don’t break the mould, there is no particular reason to assume that the Conservatives would be less affected by this than Labour.
  3. It’s entirely possible that the fallout from the Labour civil war or the Conservative referendum feuds may result in one or both parties fracturing in some way. The consequences of such a fracturing are hard to predict.

In short, if the Conservatives can’t get their act together, their divisions, their lack of direction and their lack of competence are likely to hurt them in the ballot box.

The referendum will be over on 23 June

Yes, the referendum will be over on 23 June.  It seems unlikely, however, that the arguments within the Conservative party will end on that date.  If Remain wins – by whatever margin – a substantial part of the Conservative Leavers are going to remain incandescent with their leaders over their conduct in the campaign.  Rightly or wrongly, they are going to be convinced that they were cheated and will be planning how best to sabotage government policy on the EU.  The government has a majority of just 12.  The number of irreconcilable MPs far exceeds 6 (the number is probably closer to 60).  If Remain wins, we can expect a guerrilla campaign by the Conservative right throughout this Parliament.  The divisions will not heal.

If Leave wins, the government then needs to decide what comes next.  The first “next” will almost certainly be the resignation and replacement of David Cameron and George Osborne, whose authority would have evaporated.  That would be the easy bit.  The next “next” would be to establish what to do about the exit negotiations.  Since the Leave side has not put together a prospectus, mutually contradictory reasons have been given for voting for Leave.  A choice would need to be made between prioritising freedom of trade and prioritising restricting freedom of movement.  That choice will split the Conservatives afresh between economic Thatcherites and social Conservatives.  That split could be more agonising than the existing one.  The Conservatives have split twice before over free trade.  Could they make it a hat trick?

Either way, the Conservatives are going to carry on quarrelling for the foreseeable future.  Worse than that, the public are going to carry on noticing.

Boundary changes

Many Conservatives gleefully note that the Boundary Commission is due to draw up new boundaries for a smaller 600 seat Parliament, believing that this is likely to favour them substantially, particularly given that it will be based on the new electoral register (which is thought to have fewer registered voters in previously Labour areas).  So it might, if it happens.  But the government needs to get the relevant legislation through Parliament.  It has a wafer thin majority in the House of Commons and is a minority in the House of Lords.  If Conservative backbenchers of a right wing Leave persuasion feel that the boundary changes might be used for internal party control purposes, they might sabotage the legislation.  The House of Lords is likely to reject the legislation so the House of Commons will need two bites at the cherry.  There has to be a substantial chance this legislation fails.

Conclusion

Conservative divisions aren’t going away.  As a result, they are likely to remain directionless and ministers will be distracted from their day jobs, increasing the chances of further mistakes and adding to the appearance of incompetence.  With a wafer thin majority that may well not be bolstered by boundary changes, the Conservatives look nothing like an even money bet for an overall majority.  Lay them, or better still take the 6/4 on no overall majority (Labour might get an overall majority but if that comes into play there will be time to rebalance your book later).  Those odds should be at least the other way around.

Alastair Meeks



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If next CON leader betting prices are indicator then Boris leadership ambitions not helped by BREXIT campaign

Sunday, April 10th, 2016



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The Republican dilemma: Would dumping Trump be worth the hassle?

Saturday, April 9th, 2016

And if it is, then what?

It is something of an irony that after months of saying outrageous things and winning more and more support off the back of it, Trump’s downfall might well be due to a sensible answer. There is, after all, nothing unusual or wrong in the principle that people who break the law should be punished. If it doesn’t feel right to apply the punishment, chances are the law shouldn’t be there in the first place. But that’s all by the by; the point is that this last week, if the wheels didn’t quite come off Trump’s campaign, they certainly had a screw loose.

Adding to that, his nomination prospects took a bad knock in Wisconsin, where he landed just six delegates to Cruz’s 36, meaning that the target of 1237 looks to be slipping back beyond the horizon. Unless Trump can find renewed momentum, we are now heading for a contested convention; one which has thrown up a whole series of horrible questions for the delegates.

In a nutshell, the problem is this: On the one hand, Trump has a far better mandate than any other candidate. He’s won twice as many states as Cruz and has a comfortable lead in both delegates and votes cast. Any normal candidate in that position would be declared the moral victor and proceed straight to the nomination. But on the other hand, Trump isn’t a normal candidate. He is the embodiment of Mr Marmite. He’s simultaneously led the Republican race for ten months while also recording truly dire favourability ratings (currently a net score of about -35, against -15 for Clinton, -22 for Cruz and +7 for Kasich). These feed directly into the head-to-heads against Clinton: Trump trails her by about 8%, against a deficit of about 4% for Cruz and a lead of 5½% for Kasich.

The figures are so bad and Trump’s propensity to do something monumentally stupid is sufficiently high that there’s a lot more than the White House at stake. If nominated, his unpopularity could run through the down-ticket Republicans like a stomach bug on a badly-plumbed cruise ship.

Which is why there’s so much speculation about the convention by-passing Trump if he fails to reach 1237. Not just speculation either: despite his formidable lead, Trump is only just odds-on for the nomination – or put another way, the markets feel that the chances of someone else being nominated are well in excess of 40%.

That feels to me to be too high. For all Trump’s negatives, the other horn of the dilemma is that the set of alternatives to his rejection is just as bad.

But before we get there, a quick reaffirmation of why the odds on a non-Trump candidate have come in so far. Apart from Trump’s unpopularity in the country and in the party, his options if he leaves Cleveland with nothing but a bloody nose aren’t good. He cannot do a Teddy Roosevelt and run as a Bull Moose-type third-party candidate. Quite simply, the logistics don’t work. The deadlines for independent candidates will have passed in many states, while others have sore-loser laws that prevent a candidate in a primary running under any other description in the general. A bitter Trump might be able to run-to-spoil but he couldn’t run-to-win.

What he and his supporters could do is make a lot of noise from the sidelines and try to sabotage Lyin’ Ted (perhaps by then, Stealin’ Ted too), in some other way. There, Cruz’s opponents have two trump cards to play: his eligibility and the sex scandal. Both stories have gone quiet recently but there’s enough for an embittered and reckless character to play with on both to create merry mayhem.

And even if Trump wasn’t firing broadsides at Cruz in September and October, the fact remains that the Texas senator is unpopular himself and trails Clinton. Why replace one loser with another?

However, here we’re asking what the Republicans should do rather than what they will do – which is a rather different question and one which turns on what they think they should do. The question is as much psychology as psephology. Also, as Pulpstar noted, Cruz’s Tea Party activists have been rather more adept at being nominated as delegates than Trump’s enthusiastic amateurs. Consequently, whether or not it’d be in his party’s best interests to nominate him, Cruz would be in a very strong position to work the convention once delegates become unbound.

Cruz also has the advantage that he’s the only candidate besides Trump who delegations can vote for on the first ballot, assuming that Rule 40b remains as currently written i.e. all candidates need the support of at least eight states to permit their nomination to the convention. If Cruz can sneak in supporters who are initially pledged elsewhere, that will give him considerable leverage once delegates start becoming unbound.

As an aside, we might ask why candidates don’t pay more attention to getting their supporters nominated. The simple answer is that in any political system, competitors for office will focus on where the levers of power lie. Since primaries became near-universal, killing off contested conventions, it didn’t matter who delegates actually preferred as long as they were mandated to do as the electorate told them and as long as they electorate came to a clear decision. The primaries, not the convention, held the levers of power: win the primaries and the rest took care of itself. Unless no-one wins the primaries.

But if Trump is unelectable and has gone out of his way to alienate his party, and if Cruz is also too risky and too unpopular a candidate, what then? The obvious answer is John Kasich. Sure, he’s only won one state (his own) and has a measly number of delegates but he did at least run and has decent favourability ratings. There are at least credible reasons the party could put to the electorate to reject Trump and Cruz – how would they justify adding Kasich to that list too?

When it comes down to it, the other options look so bad that the sensible thing would just be to accept the moral mandate, back Trump and then try to put as much distance between him and the party as possible. As such, I still think his odds are too long and offer value. All the same, the Republicans have been remarkably adept of late at doing anything other than the sensible thing. Makes for absorbing viewing at least.

David Herdson





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Why I’m not tempted by the 3/1 bet that Cameron will be out this year

Friday, April 8th, 2016

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He’s at his best when his back is against the wall

As a reaction to Cameron’s dramatic admission on his family offshore investments last night in the interview with Robert Peston several bookies starting offering odds on him failing to survive the year as prime minister. Both Ladbrokes and William Hill are making this a 3/1 chance.

Given the nature of the way the information eventually came out bit by bit there is no doubt that the prime minister has been damaged by this week’s events. Add on to that his possible precarious position in the post referendum Conservative Party then on the face of it this seems like a pretty good price.

I’m not tempted however because of my current betting positions which will broadly cover that eventuality. A month ago I got 10/1 on George Osborne not being Chancellor during 2016 and surely that bet would be a winner if Cameron stepped aside.

    The biggest reason for my reluctance is the nature of David Cameron himself. He has shown during the past decade that he is at his best when he is facing a crisis particularly one that could impact on his own future.

Remember his resilience and stalwart performance in the dark days of the first 3 months of Gordon Brown’s Premiership in 2007. By late September he appeared totally doomed as Brown prepared for the election that never was. Cameron’s Ipsos-MORI satisfaction ratings dropped to below the worst level that Corbyn has seen and the Tories moved at one point to being more than 10% down in the polls. His leadership was at stake as he prepared for his party conference.

Yet his and Osborne’s resolute performances over those few days saw the polls turn against Brown who had to take what proved to be the highly damaging step of dropping his early election plan.

Remember as well how Cameron dealt with the disappointment of failing to get a majority in May 2010. His dramatic offer of a coalition with the Lib Dems led to him getting to Downing Street and ultimately to Clegg’s party being almost wiped out.

Cameron is a great survivor. He is also lucky.

Mike Smithson





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The challenge for Trump gets harder after doing worse than all the polls in Wisconsin

Wednesday, April 6th, 2016

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Real Clear Politics

And another loss for Hillary

In spite of a late poll showing him 10% in the lead Donald Trump was soundly beaten by Ted Cruz in the Wisconsin primary. All the delegates bar three go to Cruz.

In the Democratic race Sanders chalked up another victory though because the party allocates delegates proportionately this has far less impact on the mathematics of that nomination race.

What was striking in both races is how Trump and Clinton performed substantially worse than the polling.

My big lay bet on Trump eight days ago is looking good. The question is when I cash out.

What the Wisconsin exit polls overnight showed was the overwhelming hostility there is to Trump amongst many Republican primary voters. 37% said they’d vote for Clinton if Trump was the nominee.

The result will give a real boost to the anti-Trump factions and reinforce their hopes that the real estate billionaire can be denied a majority of delegates.

If Trump had won in Wisconsin it was hard to see how he could be stopped.

Mike Smithson





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Latest from the key political betting markets

Tuesday, April 5th, 2016

The Republican nomination

The June 23rd EU Referendum

Winner London Mayoral Election May 2016

These odds are live but you can find out historical position by taking your cursor across the charts.

After today’s ComRes 10% Khan lead in London it is not wonder that the Labour man is an 85% shot but I do wonder whether the Lynton Crosby Tory campaign might have some aces up their sleeves for the final month.

The referendum betting has surprised me. I’d have though it would have been closer and I don’t quite konw what will cause things to change. My main betting activity has been on a low turnout.

In the GOP race tonight we have Wisconsin where everybody appears to have written off Trump. We’ll see later on.

Mike Smithson