Yet another indicator of the rising star of Mitt Romney is the most recently released information from the online predicting source, Intrade. What makes the Intrade info so important is that it is not based on any public polling or leading question media survey. It is strictly based on where real people are laying real money. Like the Halloween mask numbers, Intrade is not based on pundit speculation or political posturing; the numbers measure the reaction of the free market.
Like any trading site, the Intrade stats fluctuate constantly. And like any trading site, the smart money is to watch the trend, not the minute-by-minute projections. The trend several weeks ago—before the first public debate—was Obama by a landslide. Some projections even had it as high as 80% for Obama. That overwhelming lead has all but vanished. The one-on-one projections (analogous to the popular vote) still have Obama up by nearly 10% (approximately 55-45), but the projected electoral vote tells a much different story. Obama’s “devastating” lead—which any Intrade watcher would have called insurmountable for Romney three weeks ago—has been virtually squandered in a few short weeks. Making up any ground (not to mention not losing more), after an almost 30 point plunge is going to be extremely difficult.
The bad news for Obama is that there are still a couple of weeks to go before the election. Now that the debate cycle has been completed, Obama must rely on the media to make his case for reelection. While this is not particularly worrisome since the majority of the mainstream press is pro-Obama, it is an awful long time to go without any campaign gaffes. And with Fox News virtually destroying all other television news outlets in the ratings, Obama has good reason to be worried about the media’s ability to preserve his slim lead. Barring any sort of game-changer from Gloria Allred or Donald Trump in the form of an “October surprise,” the race is going to be a tight one.
It cannot be overemphasized how different the Intrade numbers are from polls. Polls do not measure people’s current attitudes, although they claim to do this very thing. Questions on a poll cannot be separated from an individual’s thoughts about the past and hopes for the future. When real money is involved, especially in the instance of up-to-the-minute trading, emotions can cost an individual big-time. Claiming to believe such-and-such to a pollster or a survey-giver costs the individual nothing; but when cold hard cash is on the line, emotionalism has much less to do with it. This is the difference between gambling and trading.
Individuals that make a lot of money by trading do not rely on their emotions, or on their idealistic views of the way things should be. Believing something to be true and accepting the reality of the truth are two very different things. People who play the market with their emotions may occasionally win in the short term, but nearly always lose in the long term. Obama’s relying on emotionalism to rule the day come November 6, but the trending data indicates that reality is beginning to set in… big time. Keep your eye on the Intrade numbers over the next several days and also take note of what the media is reporting about Obama. I will guarantee you that the two are related.