Intrade and Obamacare

Several years ago a group of political and investment junkies got together and formed a political futures market which would work like the futures markets for financial products like commodities. The idea was based on the notion first presented in the Wisdom of Crowds James Suroweicki's book on the impressive behavior of groups of people over experts.

The first two charts are of a current market on whether Obamacare will pass by June 10. The top chart is one of the market since it was first activated, the bottom one on the market in the last month. There are two things to notice on both charts. First, the positive market (i.e. Obamacare will be enacted) has an over all rating of almost 67% (you can buy a futures contract for $6.69. But yesterday the positive market took a big drop. Second, when the market drops (against passage) volume goes up.

The final chart is the current one on whether the GOP will control the House after the 2010 elections. Notice that since the beginning of this market it has grown steadily up so that it now stands at 45.8 and the directionality of the market is consistent. One wonders whether people like Speaker Pelosi have thought at all about both charts and tried to understand why one has begun to falter (although the directionality of the health care market is still barely positive) and the other has continued to advance.