State of Play

To start, here is an extract (I did my best to edit) from the Rasmussen Markets web site, showing the most actively traded issues today:

Issue Bid Ask Last Change

08.SENATE.DEM.51-55 32.0 40.0 32.0 0
AK.SENATE08.DEM 42.0 52.0 49.9 +4.9
08.SENATE.DEM.56-60 60.2 65.0 60.2 -7.7
MN.SENATE08.DEM 30.1 35.8 35.8 +0.9
08.VOTER.TURNOUT.>60% 10.4 11.4 10.4 0
MISSOURI.REP 95.1 98.0 95.2 -0.8

I will now interpret these.

The most interesting question is whether the number of Democrats in the new Senate will be between 51-55, or between 56-60. My interpretation of the status of the "independents"--Lieberman and Bernie Sanders--for this purpose is that they are not counted as Democrats, though there doesn't appear to be anything on the site that officially says, one way or the other. However, if either were considered a Democrat, they would definitely have 56 or more, what with the decision for Merkley in the Oregon race.

The quotes suggest that more people feel the probability is with 56-60 Dems, meaning that one of the remaining races (Georgia, Alaska, or Minnesota) will go to them.

In terms of my bets, I went with both in the stretch run to the election, about evenly, as I saw that 55-56 (as defined here) was right at the cusp of where things should come out. On Wednesday, I upped my stake on 51-55, and overall sentiment was shooting up on that one. It has since corrected downward, so I'm now in a slightly losing position on that one. I got whipsawed, a bit.

Turning to one of the cases, Minnesota Senate Dem at 35.8 (bid 30.1; ask 35.8; last trade 35.8) means that Al Franken is currently given about a one-third chance of winning. The large gap means that sentiment in his favor isn't that strong, though the last trade was on the high end of the gap--probably someone closing out his position against Al. On the other side of the fence, the less-traded one, the bid for Coleman's winning is 63.2 and the ask 69.9, last trade 69.8, which means roughly the same thing: there isn't a strong reason to take a position either way, because it's so close it's hard to be sure how it's going to come out.

I really sat on the fence on this one, on Rasmussen. I had a small position on each side (I bought a few shares of Coleman a week or two before the election, when sentiment was running very strong Franken would win--I didn't believe it), and was looking to perhaps make a buck by trying to buy low and trading off at some point. As far as guilt about "buying Coleman", frankly he isn't that awful, just kind of phony, and I thought Minnesotans would go for the guy they thought "more serious" in the end.

Voter turnout >60% was one that I did bet on, not too heavily, and looks like a loser. It's close enough to that total, or at least is perceived to be so, that the number is at 10, not way down at 0. I could close out my position and take my loss, but it's not significant for me. My expectations for a high turnout were not fully met.

Missouri Rep.--"the market" gives about 95% likelihood to the Republicans' winning that state. With about a 6000-vote margin right now, presumably just waiting to complete absentee ballots and so forth, that seems reasonable. I never had any skin in this game, at least since July or so, as I expected a Republican win and didn't want to profit from it.

As for the other two races of significance that could be bet upon--Alaska and Georgia--I never had any position. I didn't trust the Alaska voters to throw Stevens out--correctly--nor did I expect Georgia voters to throw out the nearly-as-infamous Saxbe Chambliss.

For the record, there's a huge bid-ask gap on Alaska Dem, 42 to 60 (except for one lonely seller at 52)--not much betting support for Begich at present, and there's some support on the Stevens side at 50-55% (and some resistance at 70% or so). It's close to 50-50, but the market is unstable. Georgia's a very different situation--stable at about 80-20 in favor of the Republican, but a runoff seems near-certain, so this one will not be resolved for a month or so.

If Alaska ends up with Stevens and Minnesota with Coleman, then the probabilities on the Dem 51-55/Dem 56-60 question will end up riding on the outcome of the Georgia runoff (and should switch toward 80-20 in favor of the lower number of Dem seats). Based on that expectation, I'm holding on to my longer position for the lower number.

The House may have several seats yet to be decided, but 95% of the probability on Rasmussen lies with the range 251-260 Democratic seats. That's the one I had bet on, actually.

Rasmussen will go on beyond the election and its aftermath, I think, though it may need to find some other items for people to bet on to maintain interest. My initial stake of $10k was halved back on Super Tuesday (poorly-timed bets by this newbie on the California and New Mexico primaries, as I recall), and I've gradually worked it back to near where I started. I had small wagers that won on states like Ohio, Indiana, and North Carolina--I didn't believe but wanted to profit if Obama could pull them out--and a much larger, more successful one on Nevada, where I did believe. I made a bunch on Obama--mostly from early days, when I "bought him" at 30% or so, and betting against McCain--I was short on him averaging about 30-40% (I increased my stake in September when he briefly got up to 50% or so), but most of those gains were "marked to market" and showed up in my account a month or so ago.

My success on CNN's market game has been much greater--my $5k is up to $12k, and I'm in the top 3% of traders--but the interest level is lower. The markets there always had a heavy Democratic bias, so I was mostly reduced to shopping here and there for bargains (again, I did well betting on Nevada). I did OK on some of the individual House races, but missed a few as well. There are no open markets, so I suspect CNN may shut it down (rather than open betting on, say, who will get Cabinet posts).