IEM Futures Market: Congressional Control Currently Confounding

Filed in National by on August 19, 2016

My prediction market of choice is Iowa Electronic Markets (IEM) run out of the University of Iowa. It is the oldest and has been highly predictive over the years. More predictive than polls, anyway.

That’s why I want to know more about why traders are bidding up “Other” in the congressional control market. “Other” is an outcome that has now tied “RH\RS” (Republican House/Republican Senate). Obviously, I’m not surprised RH/RS is tanking, and that RH/DS is now the clear favorite.  But what does the movement on “other” foretell?  A Democratic Senate and deadlocked House?

Here is the graph:

IEM congressional control

 

Here is the complete breakdown of predicted outcomes based on share prices.  You can read the average column as an expression of the probability of any given outcome. (e.g RH_DS trading at 0.424 is about a 42.4% probability assigned to that outcome :

IEM prices

About the Author ()

Jason330 is a deep cover double agent working for the GOP. Don't tell anybody.

Comments (13)

Trackback URL | Comments RSS Feed

  1. puck says:

    What does a trader have to do to record his choice as “Other?” Is Other a marker for No F’n Clue?

  2. jason330 says:

    No. You are purchasing a futures contract that basically says “something other than RH/RS, RH/DS, DS/DS, or DS/RH is going to happen” it is like betting on a coin flip and taking “edge”

  3. puck says:

    “something other than RH/RS, RH/DS, DS/DS, or DS/RH is going to happen”

    Martial law?

  4. jason330 says:

    Maybe. it seems more likely than a tie.

  5. Dorian Gray says:

    I see you liked the coin spin analogy from yesterday. I’ll let you nick it gratis. It’s yours now. Godspeed.

  6. jason330 says:

    The perfect metaphor cannot be denied.

  7. anonymous says:

    @DG: I’m pretty sure Rod Serling used it first.

  8. Dorian Gray says:

    Not in that context, but yeah, great episode… Dick York starred.

  9. anonymous says:

    I’ll bet you thought of that episode when you used the metaphor. I did, anyway.

  10. Dorian Gray says:

    I didn’t actually, but I am a very big fan of The Twilight Zone! And I don’t even really dig Science Fiction. The only Sci Fi I like is Twilight Zone, Ray Bradbury books and that British Channel 4/Netflix series Black Mirror….

    Oh, and has anyone else read the new DeLillo novel “Zero K”? It’s Science Fictiony, but it’s DeLillo, so…. strongly recommend.

  11. Jason330 says:

    Just read an online review. Looks good. I like an occasional science fiction.

  12. Jason330 says:

    So “other” has crashed. (h/t Dr. Frizzle vonFroozle). https://tippie.biz.uiowa.edu/iem/

    So that was some strange “pump and dump” scheme, or people who thought a 50/50 senate split was happening, now don’t.