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“Though the earth, and all inferior creatures, be common to all men, yet every man has a property in his own person: this no body has any right to but himself. The labour of his body, and the work of his hands, we may say, are properly his. Whatsoever then he removes out of the state that nature hath provided, and left it in, he hath mixed his labour with, and joined to it something that is his own, and thereby makes it his property. It being by him removed from the common state nature hath placed it in, it hath by this labour something annexed to it, that excludes the common right of other men: for this labour being the unquestionable property of the labourer, no man but he can have a right to what that is once joined to, at least where there is enough, and as good, left in common for others.”     John Locke,    Two Treatises of Government, Of Property

November 28, 2007

Why Is Ron Paul Slipping On Intrade?

by Brad Warbiany

I’ve long been a fan of Intrade, as I’ve pointed out here, here, and here. I’ve noted that Ron Paul, for quite some time, has been trading higher on Intrade than he’s been polling.

But something recently changed, and rather inexplicably. When the Ron Paul advocates raised $4.2M in one day, I expected to see a big bump in his share price on Intrade. But it didn’t happen. Instead, from his peak of about a 9 share on that day, he’s now slipped to roughly 5.5. Why?

Looking at the top candidates, I see that Giuliani has increased share at the expense of Romney, and McCain has held roughly constant. The only explanation that I can see is a surge by Huckabee. Huckabee has become the media darling as a dark horse candidate, and it seems the evangelicals are backing him pretty forcefully. Since they’re both dark horse candidates, I could see traders making a move towards Huckabee rather than Paul. The only other explanation I can see is that perhaps traders were expecting Paul’s money position to lead to poll results, which doesn’t seem to have materialized.

But perhaps I’m missing something. I know there are a lot of people who read this blog that are passionate about Ron Paul. Feel free to offer your own analysis in the comments, because I’m somewhat baffled.

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32 Comments

  1. I wish I had an answer. He still seems to be accelerating. I would certainly hope he goes 3rd party when he doesn’t the nomination.

    Comment by John V — November 28, 2007 @ 7:33 pm
  2. People are probably covering bets against Paul, pushing down the line.

    Comment by A.B. Dada — November 28, 2007 @ 7:47 pm
  3. Huckabee isn’t really gaining even though the media would have us believe it. Huckabee is the backup alternative to us going against their first choices and getting Giuliani or Romney. The GOP and media would rather put Huckabee in place and crush the movement with moral law and homeland terrorism enforcement. The CIA can install puppet leaders overseas why not here? Huckabee is a scam, the CIA I am sure could hack the intrade system and distort numbers. The most important thing to look at is out your own window. How many people do you see everyday on the street for these any of these candidates vs. the RON PAUL REVOLUTIONARIES!

    Comment by Patrick S. Wynne — November 28, 2007 @ 7:49 pm
  4. Ron Paul is getting the numbers in everything except the phone polls. Why do those matter so much more than anything else?

    Comment by David Wilson — November 28, 2007 @ 7:54 pm
  5. The only thing I can speculate is that The depth of his analysis on the issues is hard for most to get an understanding of with the way the media is portraying him.

    If the fools in the general populous would recognize that there is a separation of powers still, they would not be so afraid of his ideals. Then maybe they would actually read how he arrived at his particular view.

    It sucks that Core Character is not held in higher esteem.

    Comment by Brad — November 28, 2007 @ 7:55 pm
  6. Patrick, I’m afraid to say it but Huckabee is gaining, and by a relatively large amount compared to the others.

    Comment by David Wilson — November 28, 2007 @ 7:55 pm
  7. I expected to see a big bump in his share price on Intrade.

    The “bump” was the increase before 11/5. Remember that everything was transparent. The market had already “priced in” a good fundraising day. Yes, it was even better than expected, but even that was evident before the end of the day, so there was nowhere for the price to go but down. Another good set of poll numbers and the slump will be brushed off.

    Comment by Jeff Molby — November 28, 2007 @ 7:57 pm
  8. Jeff,

    The new polls are starting to come out, and Paul hasn’t moved any higher than he was 2 weeks ago.

    You may say that’s not enough time, but we’re only about 5 weeks away from Iowa and 6 weeks away from New Hampshire. The die is being cast.

    Comment by Doug Mataconis — November 28, 2007 @ 8:01 pm
  9. Intrade peaked a day before the Veterans Day money bomb bombed — about the time it was becoming apparent it would be a disappointment following Nov. 5. I know many Ron Paul supporters were very negative about following up Nov. 5 so soon. Also, the Dec. 16 money bomb has turned out to be somewhat undercut by the Ron Paul campaign itself, as they sent out word that they needed more money before Dec. 16. Many supporters are wondering why the campaign can’t get with the spirit of the independent fund raising and simply borrow money rather than undercutting the proven technique of a well-prepared money bomb event. Finally, the first TV ad aired by the campaign in NH was nearly universally panned as ineffective by Ron Paul supporters. Why the campaign can’t hold an open contest for the best video produced by its energetic and technically savvy base — with some of that $9M as prize money — is a question.

    Comment by James Bowery — November 28, 2007 @ 8:02 pm
  10. Please consider contributing on the 16th of December.
    Ron Paul needs the publicity of another big fund raising day.

    There is an obvious media bias and it is sad. Rep. Paul is the one candidate of the crowd who has substantially differing views and he was not given much of a chance to articulate those views. Much time was given to marginal issues and small differences between other candidates’ positions on the issues. I suspect many special interest groups have much to lose if a President Paul had a chance to use his veto pen. This is reflected in the lack of time given to Rep. Paul.

    Comment by Gary Danelishen — November 28, 2007 @ 8:04 pm
  11. People say Huckabee is gaining. If that’s the case then explain why he still hasn’t gotten even 2 million in contributions this quarter? Where are these supporters?

    Also. In nearly every single metric of success Paul has come in on the top three.

    With that being said I would still expect certain measures of Paul’s campaign to ebb and flow. It’s normal to see a campaign hit rough spots here and there. But with Paul, his rough spots are still not enough to put his campaign in a downward slope.

    Comment by Brewskie — November 28, 2007 @ 8:06 pm
  12. I think you’ll find the biggest factors/changes comes from after debates, not from obviously biased polls. I dunno bout intrade, never really paid attention to it. But if you can get better odds somewhere else, then you would obviously do so I think.

    Not a single media poll takes into account 1st time voters, nor do they account for anyone who switches parties. Most people know better than to pay attention to them unless it’s like right before the general election when there are no filters as such in place, and it’s a 2 person choice. I honestly really don’t know why anyone even mentions those polls this early. They have never been accurate by any stretch of the word. The race isn’t clear until the votes are cast.

    Comment by badmedia — November 28, 2007 @ 8:07 pm
  13. If you know a conservative Christian, nows the time to ask them to consider Ron Paul–and to check out the ethics violations in Huckabee’s past. He is a great communicator–remind you of anyone else from Hope, Arkansas? I think Huckabee could be propelled by Christians, and I am only hoping that there are more Christians like me who can sense the vast difference in quality of character of a Ron Paul vs. a Huckabee. If not, we can expect to have another President that makes us squirm in our seats as we see history unfold before our misguided eyes!

    Comment by Nick — November 28, 2007 @ 8:08 pm
  14. badmedia,

    You may be right about the uncertainty of polls. However, pundits and electors don’t care. They like their polls, and if Paul doesn’t register well, he’s out.

    Comment by David Wilson — November 28, 2007 @ 8:09 pm
  15. If you had an investment background you would understand: “Buy the rumor and sell the fact.” Anticipation is always worth more than reality in the market. Now that Ron Paul is tracking toward a number somewhere in the neighborhood of $6.5 Million for the day of December 16th, the prices should beging to rise once again.

    Comment by Skip — November 28, 2007 @ 8:23 pm
  16. I thought Ron Paul was not given the opportunity to speak up, he was mostly put in a defensive position.

    I also thought that he should have mencioned the big treath to our pockets which is Inflation Tax and the Crazy fall of Dollar.Probably the one thing that every american will suffer from(Rich and Poor).

    It is true that foreign policy plays a big role in the debate , but he has a lot more to offer than just Foreign Policy and he should have talked more about the other things.

    But i was pissed because most of the question anderon cooper asked were addressed to Ramny and Guliani and I am sick and tired of listening to their political games

    Comment by yacine — November 28, 2007 @ 8:26 pm
  17. Intrade is a better gauge of probability of winning. I’d trust Intrade for the 5.5% chance of winning. It’s actually pretty good compared all things considered.

    It doesn’t measure the percentage of supporters. I think despite whatever growth in polls may show, the feeling might be that there isn’t a good chance for that support to grow or change in any significant fashion among the voters before the primaries.

    It may just be an observation that the Republican party got a whole lot more religious and a whole lot less fiscally conservative and hence the rise of Huckabee.

    Comment by TanGeng — November 28, 2007 @ 8:29 pm
  18. TanGeng,

    Which means that there’s a 94.5 probability that the Republican nominee will not be Ron Paul, right ?

    Comment by Doug Mataconis — November 28, 2007 @ 8:31 pm
  19. The Huckmonster: The slickest of slick Baptist preachers. He shared a political consultant with Bill Clinton: Dick Morris in 1992-1994. Clinton forced Morris to quit Huckabee. Mike is a well planned out political barracuda—no difference between Bill Clinton and Mike Huckabee other than pro choice vs. pro life. I know. I am an Arkansan; I worked with and contributed to Huckabee’s campaigns. He should be running as a pro life Democrat.

    Comment by Skip — November 28, 2007 @ 8:32 pm
  20. I’ve been scratching my head over this as well. The only conclusion that seems to make sense is that most the people on intrade are well to do, compared to the everyday guys on the other betting sites. Thus their getting less action on Paul at Intrade. Least that is my theory. Either way, it works good for me. Wanting to pick up a few more shares soon. =)

    Comment by James Adams — November 28, 2007 @ 8:34 pm
  21. Profit taking, you get a boom, bust, boom, bust. Good news raises it and no news or the disclaimer he can’t win over time pushes him down. It happened in 06 when all the pundits and polls said that the Dems were not going to take the Senate. Media effects the market on Intrade and the media have been off for a couple of years now.

    Comment by PC — November 28, 2007 @ 8:48 pm
  22. The new polls are starting to come out, and Paul hasn’t moved any higher than he was 2 weeks ago.

    Which?

    You may say that’s not enough time, but we’re only about 5 weeks away from Iowa and 6 weeks away from New Hampshire. The die is being cast.

    It isn’t a meaningful block of time. The mid-month polls were the first to show the result of 11/5 and it was clear that he got a healthy bump. If the new polls are showing the same numbers, that just means the gains were real. Nothing happened during the interval and he was just rolling out his first advertising, which only aired in a couple states. It would be silly to expect anything more than a fractional increase.

    I’ve been saying it for awhile, now. December will tell the story. He’ll exceed his $12m goal soon and the Tea Party is shaping up to top 11/5 handily. Both events combined with the advertising expenditures will boost awareness of his campaign to the point where we can make informed judgments of his chances.

    Until then, you’re just being Deputy Downer.

    Comment by Jeff Molby — November 28, 2007 @ 9:30 pm
  23. He had an IPO of sorts like the 90′s on Nov. 5. He hit hard, had a bubble, corrected… and now he’s at about correct value. His odds are high in bookmaking circles. real high.

    Comment by John — November 28, 2007 @ 10:04 pm
  24. I don’t think any of it matters. If you like his odds better than the price buy, if you don’t sell. The options markets are only a way to transfer risk. They do not really tell you anything meaningful except the level of risk that people find acceptable. Just like the price of stocks. If they really represented the value of a company, then nobody would be a consistent winner, and you wouldn’t have people like Jim Rogers or Warren Buffet. Options and futures markets are once removed from underlying value, so in effect they measure the perception of the publc about the amount of risk.

    My point – the price will fluctuate up and down based upon the small amount of liquidity and perception of gamblers. But the price will be settled on voting day. Then, and only then, will we know if perception matched reality.

    Comment by rhys — November 28, 2007 @ 11:38 pm
  25. Well, no sooner do I say the Ron Paul campaign is missing the boat by not airing tv ads designed by their technically savvy and energetic supporters than they run this ad during the CNN debate tonight, independently produced by a supporter:

    http://ronpaul2008.typepad.com/ron_paul_2008/2007/11/cnn-airs-ron-pa.html

    Comment by James Bowery — November 29, 2007 @ 1:18 am
  26. Paul is slipping in the Repub Nomin category on Intrade but he is holding steady on the General Election category. I think the Intrade numbers are confirming what I’ve been saying…Ron Paul is going to make an independent/3rd party run.

    Comment by Kaligula — November 29, 2007 @ 2:34 am
  27. Betters found better odds on at least one other online gaming site that zoomed from 1-18 to 1-6.

    Comment by Jim McClarin — November 29, 2007 @ 6:23 am
  28. When was the last time a third party run succeeded?

    No, what the General Election number holding steady means is either that the market is confident he will do well in the General Election — if nominated — or traders are not doing the arbitrage between the two markets correctly.

    See the electability graph:

    http://ronpaulgraphs.com/intrade_electability_rep.html

    Comment by James Bowery — November 29, 2007 @ 6:23 am
  29. The traders saw some resistance to Ron Paul from the established as the establishment promoted Huckabee as an attempted foil to Ron Paul, so they got spooked. The traders have not seen anything. The Ron Paul movement will gain momentum as time goes forward and what will transpire will be huge.

    Comment by Mike — November 29, 2007 @ 6:38 am
  30. The corporate run mainstream media(for instance Boeing sponsors Meet the Press)is pulling out all the stops to defeat Paul. Last night I watched the debate last night and was disgusted by how biased Anderson Cooper, host of the CNN/YouTube debate, is against Ron Paul. Paul’s ideas are very mainstream. He stands by the Constitution, and is for America and American citizens. The mass media just keeps trying to shove Huckabee, Romney and the other Republican neocons down the throat of the American people. The new stategy of corporate run media appears to be slandering Paul supporters as fringe dwellers and conspiracy theorists.

    I am registering as a Republican so I can vote for Paul.

    Comment by amy childers — November 29, 2007 @ 7:31 am
  31. I’m guessing the 9 was a slightly inflated stock value due to the excitement leading up to the money bomb and the media hype following.

    It’s natural that he’d slip a bit. Hopefully we’ll see a surge again soon.

    Comment by Chad — November 29, 2007 @ 9:14 am
  32. All 5.5 means to me is buy buy buy! :)

    Comment by Chad — November 29, 2007 @ 9:14 am

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