Thursday Night NFL Nov 30

YES, i'm back. This is just a game that I can't let go. I must post this one, it just seems too good for me to not share it with you guys

The Pittsburgh Steelers felt like they were hit with a lead pipe last week when the Baltimore Ravens buried them 27-0. Now fellow AFC North club Cincinnati becomes the next team to try to derail the Ravens' express. To the Bengals advantage they get the Ravens at home but to their disadvantage they haven't played well there, going 2-3 straight-up and 1-4-1 ATS. Overall the Bengals are 6-5 and need this game to stay afloat in the AFC wildcard regatta. Cincinnati was almost as impressive as the Ravens last week, burying Cleveland on the road 30-0. It was the Bengals second consecutive win following a three-game slide with the middle loss coming at Baltimore by a 26-20 score. The Ravens have won five in row to get to 9-2 on the year (7-4 ATS) and can clinch the AFC North with a win.

Baltimore: 14-4 Under as an underdog
Cincinnati: 0-6 ATS at home off BB wins

JEDI THOUGHTS: Despite the fact that Cincy is 0-6, Doesn't count that this game means way more than those six loses they losed after after back to back home wins. If this game goes under, it'll be decided by who scores to 17 points first. And I clearly see Cincy scoring that in the first half. Take this game and thank me later =)

Jedi Pick: Cincinnatti -3
Be sure to check out my other blog, it's going after ANOTHER CONSENSUS TONIGHT on the CFB MAC Championship game. Check it out at www.pregameconsensus.blogspot.com the consensus is at 7-1, and 7 sweeping days of daily picks this month.

Geniuses appear to be morons

Early in the life of this blog, I posted about core drivers (even needs), an insider's view, about those of us who enjoy trading futures on TS. A snippet:

An even higher aspiration than wrestling with one's fellow man, there is something in each one of us that wants to be able to predict the future. To see farther, to understand more, to know Truth. If we can make the call to go left vs right, to take the shortcut, to go for it on fourth down, to see the incoming missile and get to cover in time, we can save ourselves and our loved ones. We'd be qualified to lead others to safety, and even to the Promised Land.

Now, two of my favorite bloggers, Scott Adams and Alex Tabbarok, have taken up the subject of being radically correct, even while being accused as being wrong. The cartoonist says:

And you probably know from your own experience that if you have an incredible idea of your own – the sort that is later proven to be genius because it works – that people around you will consider you a moron right up until the point your idea works. Then they’ll think you’re a lucky moron. Genius looks just like stupidity to the observer.

The professor says, about Milton Friedman (my favorite economist):

Friedman sets up a very simple model, Z(t)=X(t)+Y(t) where Z(t) is income at time t, X(t) is what income would be if there were no counter-cyclical government policy and Y(t) is the amount added to or subtracted from X(t) by the history of government policy.

You wouldn't think that much could come out of such a simple model but Friedman takes the model, notes that the formula for the variance of two random variables is V(Z)=V(X)+V(Y)+2 r(X,Y) Sd(X) Sd(Y) (where V is variance, r correlation and Sd is standard deviation) and proceeds to show that:

In order to cut the variance of income fluctuations in half (which would cut the standard deviation by less than a third), r(x,y) must exceed .7.

But was Friedman right? In the thirty or so years after he wrote, when counter-cyclical policy was in vogue, the variance of the US economy was much lower than in the pre-World War I years. Reality it appeared, refuted Milton Friedman.

Friedman, however, lived to see his simple model proved correct (Essays in Positive Economics!). In a series of papers beginning in 1986, Christina Romer showed that the pre-WWI volatility was an artifact of the way the data was collected. Once the pre-WWI and post-WWII data were collected consistently, using the same methods, the post-WWII economy showed no big drop in volatility.

Almost nothing in, a surprising and powerful result out, and an implicit prediction proven correct after thirty years. That's the Friedman magic.

A Teacher long ago also once said as much, in stating "a prophet has no honor in his hometown".

So for those of you who are being accused as morons: if your trading P/L is consistently positive, don't listen to the peanut gallery. But if you are not profitable, maybe the gallery is right.

Polls or Tradesports? Which is more accurate?

I came across this article on Kausfiles at Slate this morning and the author does a modest analyzation of the 4 major polling firms (Rasmussen, Mason-Dixon, Survey USA, Zogby) vs the results of the actual 2006 results. The order of finish according to the spread or difference of the final polls were as follows: Mason-Dixon, Rasmussen, Survey USA, Zogby. Read the article for more info. Now I know in 2004, Tradesports predicted every race except one according to a Dartmouth study if I am not mistaken; but does anyone know how TS did this year? I know for example on the GOP Senate control (trading in the 60-70s) lost big while if you looked at the state by state contracts for Senate the Democrats were actually winning. I also think off of the top of my head TS was wrong on the gubernatorial election in Minnesota where Pawlenty pulled it out over Hatch (the TS contracts were pretty heavily tilted in Hatch's favor, but lack of liquidity could be the culprit). I wish I had more time to fully analyze the results but let me know what you found to be the case. While I believe polls tend to give the general "temperature" per se of the race (whether the race is close or not), I still believe TS is the better indicator of not only the closeness of the race but who wins as long as there is great enough liquidity.


http://online.wsj.com/public/article/SB116360961928023945-o2r3vkEjvrPBUlECMJ5Vz2_mUWg_20061215.html?mod=tff_main_tff_top

Could a Mormon be elected President?

This seems to be a hot topic over at National Review Online right now with Mitt Romney as one of the "Big Three" for the GOP nomination. The main question is: Will conservatives vote for a Mormon? Now, depending on what you mean by conservative the question is up in the air. Generally there are two types of conservatives out there: 1) fiscal and/or 2) social. Now of the two types, I would say fiscal conservatives outnumber social conservatives. I believe all conservatives want a balanced budget, less spending, less taxes, and generally smaller gov't in size. Now most social conservatives I believe are fiscal as well but not as many fiscal conservatives are social conservatives. What is interesting about this is that Mitt Romney is aligned fairly strongly with social conservatives based on his values as a Mormon. The ironic thing about this is that despite being a social conservative, I believe more of Romney's support will come from fiscal conservatives (even though I am personally suspicious that Romney is a Big Govt Conservative). The reason for this is that many social conservatives are also Evangelical Christians. Mormons and Evangelical Christians have similar values but the latter distance themselves from Mormons based on the LDS' extra-Biblical teaching. This may not rub a soley fiscal conservative the wrong way but it could be hard for Romney to pick up the Evangelical vote precisely because of this. What could also very well hurt Romney is coverage by the media were he to win the GOP nomination. The media already picks on Christianity enough as it is, it will be interesting to see how the press reacts to the more quirky Mormonism (do your due diligence and you will know what I am talking about). Bottom line: I think Romney is a solid politician but like his other two front-runners, seems to face obvious challenges uniting the Conservative base. I would look for a dark horse candidate to make a run late (not necessarily Newt but Newt's ideas will set the campaign dialogue/debate).

Why do people both buy lottery tickets and insurance against losses?

Hat tip to Tyler Cowen. He says:

For a long time I didn't think much of Milton's seminal 1948 article on expected utility theory, but it turns out the joke is on me...

The Friedman-Savage piece starts with an obvious puzzle: why do people both buy lottery tickets and insurance against losses? That would seem to make them both risk-loving and risk-averse at the same time. The proffered answer is simple: part of the utility function is concave, and part is convex. Across the lower range we wish to play it safe, but above a certain margina we are willing to take gambles (by the way, here is some evidence, and why it might follow from market constraints).

I admit that I have bought about 100 lottery tickets in my lifetime, whenever the (overstated) pot is over $20 million, which usually yields the (false) expected value > 1.0. The reasons why the pot and expected value are false:

1) The pot figure is a total of future payments, usually over 20 years. The lump sum payout option is about half of the advertised pot, and that is before taxes.

2) There is a material risk of splitting the pot with identical tickets.

But even knowing this, I still have spent the $100 over the last 20 years. Silly me.

Since we are on the topic of utility, awhile back, I posted a reference to Pascal's Wager. Jason Ruspini recently linked to Alex Tabarrok's paper on the rationality of taking the wager, which I had read a long time ago. If you ever find yourself estimating your personal utilities beyond your estimated life expectancy, I suggest you read the whole paper.

Newt for Prez in 2008

Hello all, I returned from Jamaica this weekend and am back in the great state of Texas. At work I came across this article on cnnmoney.com regarding a Fortune interview with Newt Gingrich. Those of you who know me know Newt is my #1 candidate for the GOP nomination because right now, he is the only leader I know of that will lead from conservative principles and actually has ideas of transforming healthcare, the economy, and our energy dependency. Here is an excerpt:

But Armey adds: "He's never been a parochial member of Congress. He has big ideas, and has had them for a long time. He's not going to appear to have just discovered them for the purposes of an election. And that's a good place to be for an '08 candidate."

http://money.cnn.com/2006/11/20/magazines/fortune/newt.fortune/index.htm?postversion=2006112013

Brandon Lang's 75 Dimer

Since I haven't been doing much, and other have been saying I should give it up. I thought I might as well post another handicappers pick. This is from the great Brandon Lang and his insights of his picks. Bet wisely, I usually don't follow this guy, but maybe he's better luck than I am.

BRANDON LANG SUNDAY75 DIME
Denver Broncos
I dont get this line or why people really believe the Chargers are going to come in here and win this game. Not going to happen tonight.First of all, they are playing in a place they have lost 10 of their last 11 games including 6 in a row. I am talking about 6 in a row here folks.Secondly, they have a head coach who has lost 13 of his last 17 to the Denver Broncos. Not exactly confidence building numbers heading into this game tonight.Now, let me point out that with Merriman out of the lineup for the Chargers they have been torched for 25 points at home by Cleveland in a 32-25 failing to cover as a 13 point home favorite.Then last week, they travel all the way cross country and get in the highest scoring game of the year with the Bengals, coming from 28-7 down at the half to win 49-41 in a game that I got tired watching.Now they travel all the way back home only to go up to the altitude of Denver without their best defensive player against a team they just cant beat. I dont know about you but you couldnt ask for a better spot to hammer the Broncos.Now, I know Denver has struggled a bit offensively but if you really look a little closer you will see that not to be true. Let me take you to the numbers.They put up 31 at home against Indy and then go to Pittsburgh and get 31. Now just because they struggled last week in Oakland scoring 17 points, everyone thinks they are struggling. I give the Raiders 50 % credit for shutting down the Broncos and the other 50% to the Broncos being in a huge flat spot off the Colts and Steelers games.Let me also point out the Raiders have the 2nd rated pass defense in the NFL and 9th ranked defense overall. Just because they have no offense, people lose sight of just how good the Raiders are playing defensively all year.Denver will be refreshed tonight, playing at home, versus a defense that in their last 5 games has given up 19 to the Niners on the road, 30 on the road to the Chiefs, 24 at home to the Rams, 25 at home to the Browns and 41 on the road at Cincinnati. Do you have confidence in this Chargers defense, on the road again, without their best defensive player, to stop this Denver team and Mike Shanahan? I know I dont and I will force them to step up and do just that. My money says they cant and the Broncos are a huge play for me today.
75 Dime Winner Denver

PregameConsensus SWEEPS Daily Picks AGAIN!

Yesterday I posted 4 plays. And AGAIN the daily picks page SWEEPS the board for the 4th time this month. And a consensus record at 5-0 WOW! I'd like to thank the people that I have posted on the blog and to keep up the good work. Ronniedizel has a great pick today (is actually GOY#2), you can find it on my blog also, and other great picks for today. www.pregameconsensus.blogspot.com

Michigan @ Ohio St.

There's a berth in the BCS Title game at stake Saturday in Columbus, Ohio when the #2 Michigan Wolverines come calling on the #1 Ohio State Buckeyes. But this game might not settle the issue. If the game is close, a classic, an overtime thriller, then the call will go out for a rematch in the Championship Game. The call will be even louder if #2 Michigan earns a narrow victory: certainly the former #1 Buckeyes will demand and deserve a rematch. Of course, Ohio State isn't supposed to lose this one. Favored by seven points the 11-0 Buckeyes (8-2-1 ATS) are 4-1 vs. Michigan under coach Jim Tressel and are 4-2-1 straight-up (5-2 ATS) the last seven played at Columbus. But Michigan is also undefeated (11-0) and a fine spread team (6-4-1 ATS).

JEDI THOUGHTS: Troy Smith plays too good in big games. If Michigan can stop him with their great defense then it'll be tough. Considering Michigan's former coach just passing away, Michigan will play with HEART! Which can lead them to winning this game (would of been a major factor if they were playing at the big house rather than the horseshoe) But i'm still thinking 7 points is way to much for a great defensive game. DEFENSE WINS GAMES! But OHIO WILL STOMP ALL OVER E'M

Jedi Pick Of the Day: Ohio St. -7

PREGAME STEAM ALERT!
There's a PREGAME STEAM pick today, which made my Pregame Consensus blog. They're going for another dent in the winning column. Check it out, you know where to find it.

Pittsburgh GETS WHOOPED!

As you guys should have already known, that Pitt couldn't play up against WV. They hung in there with e'm for awhile but couldn't even keep up within 11 points. If you guys have check out my other blog www.pregameconsensus.blogspot.com you know they those guys went 5-0 on consensus last night on the ohio/akron game. I did post that game late on that site, but I did post before game time. I didn't have much of a bad day last night, got my money back and more from the Ohio, Warriors game. And didn't do so great on Pitt here, so I'm releasing my GAME OF THE YEAR later this afternoon, this is going to be my biggest wager in NFL this season. I'll try to post it by this afternoon so the spread doesn't jump any higher. I'm a 100, 200 dollar bettor, and i'm layind down 3000 on this game. I've been watching this game for two weeks now. So come back later afternoon for my release.

West Virginia @ Pittsburgh

West Virginia @ Pittsburgh

The Backyard Brawl will play out on National TV as #8 West Virginia visits Pittsburgh Thursday night on ESPN. West Virginia (8-1, 3-1) was knocked out of the national title hunt with a 44-34 loss at then-No. 5 Louisville on Nov. 2. But it rebounded with a 42-24 win over Cincinnati in its last and with wins over Pitt, South Florida and Rutgers can stay in the BCS Hunt with an 11-1 finish. Meanwhile Pitt is Bowl-eligible at 6-4 but has dropped three straight and has this contest and Louisville next so could be looking at five straight losses and a .500 finish. The Panthers lost Saturday 46-45 defeat in double overtime at Connecticut as an 8.5-pt. favorite. Pitt blew a 14-point, fourth-quarter lead in that contest. Check out daily plays at www.pregameconsensus.blogspot.com these guys hit ANOTHER PERFECT day yesterday! Still doing homework on this game. Be sure to check back later before game time, on tonights game. And they're now a perfect 4-0 on consensus

West Virginia: 8-1 ATS after forcing 3+ turnovers
Pittsburgh: 12-25 ATS off an Over

JEDI'S PICK: Pittsburgh +11

JEDI THOUGHTS: Theres a system I use that if you're a home underdog with more of a time possession handling the ball, and controlling the ball with yardage by passing or rushing, take the home dog!

ALERT THERE'S A CONSENSUS PLAY at www.pregameconsensus.blogspot.com they're 4-0 with another pick tonight, check it out!

Slim chance of overturning the ban

My good friends, BUCWILD and ****73NJ, were asking me about this article, which starts:

Casino executives and a poker lobby group said that they hope a change in power brought by the midterm elections will help them overturn an Internet gambling ban rushed through Congress while Republicans were still in control.

I don't think so. My reasons?

1. The GOP was obtuse enough to pass this ban, while excepting for state lotteries, horses, and casinos. The Dems are historically more obtuse.

2. This was not a major issue in the midterm elections.

3. As Dick Armey said today, the only place where avoiding any economic understanding furthers a career is in Congress. While the futures markets did not predict these recent election results perfectly, they still seem to outperform polls. So if information futures are bad, polls are worse. And if information futures are better than polls, then if used properly, we may improve lives and policy. Why would we expect Congress to improve lives and policy?

4. The article talks about how states can determine internet policy, just like with casinos. Duh!!! What is the point of the internet, if sites are excluded by state? Another terrible idea.

Here are some ideas from Jason Ruspini and Tom Bell, about some legislative possibilities. An excerpt:

Tom W. Bell's suggestion that lobbying campaigns take place at the state level could therefore be helpful. Efforts that would be ineffectively small at the federal level could be marshaled and directed at the most favorable states. The markets would only be legally open to those states' residents, and the operators of the markets should make the good-faith practice of blocking clients from states were gambling is clearly illegal. But there is reason to suspect that if such a law is passed in one state, others will follow, in part from precedent, in part as a tax-dollar rush. At some point, a network effect will help the process along. Within a couple of years, a "confederation" of states where prediction markets are legal could be bootstrapped.

Milton Friedman, my favorite economist, dead today

1912-2006. More to come.

UPDATE: According to his autobiography, Friedman considered his television series Free To Choose, among his outstanding achievements. The summary of this series, and Friedman's priceless body of work to us:

Free To Choose is about freedom, the interrelationship of personal, political and economic freedom. Free To Choose is about the ideas of Milton and Rose Friedman, ideas that still dominate public policy debates decades after they were first proposed. Free To Choose is about those who refined and continue to extend these ideas.

Why am I still slightly bearish on the Dow

The DJIA will trade over 12300 today. A few weeks ago, I called a retreat down to 11600 through early 2007. I am now revising that target to 11800.

Why am I still more bearish than the market? I think the market is obsessed with docile inflation (like the nice CPI that came out today), and also the prospects of a Fed funds cut--which are contrarian forces pushing against each other.

I am still looking more at economic growth and corporate earnings. Those are no longer growing faster than stock prices. One indicator of that: the price/earnings ratio of the S&P 500 has increased by 0.25% over the last couple of months.

The Pit is better if there are fewer smart people in there

How can I say such a thing? I didn't, Scott Adams did. And he's pretty smart. Read the whole thing, especially his finding that Mensa geniuses are losers. Here's an excerpt:

In prior posts I’ve mentioned how much I’d like to see political polls that are limited to the smart, well-informed people. I have to confess, I thought I was stating a universal truth along the lines of “it’s better to have good health than poor health.” It seemed to me that being smart and well-informed was almost the same thing as being wise. Who doesn’t want the benefit of wisdom to inform their choices?

I was surprised at how many of my readers rushed to support the high quality of decisions made by stupid, uninformed people who are guided by superstition.

Some people accused me of being an elitist trying to assign a higher value to my own smarty-pants decisions. That’s a perfectly reasonable assumption, and I would have made it myself if I were in your Birkenstocks. But the truth is that I want to know the opinions of people who are both smarter and more informed than me. Why would I limit the quality of my advice to people who don’t know any more than I do?

And yes, I agree that Carter was "smarter" than Reagan, in the academic sense. I do not think that Reagan would have flourished at the Naval Academy. But Adams and I seem to agree that Reagan was a whole lot more effective.

UPDATE: It looks like Adams and I have another thing in common: we both have bought some GOD.EXISTS, as Adams concludes with "Alternately, we can keep voting for the guy with the best hair while waiting for the Rapture. That might work too." Check out the latest rounds at Midas Oracle: Jason Ruspini chuckles, Chris Masse celebrates, and Alex Forshaw is maybe a little more testy than me.

PregameConsensus STRIKES AGAIN!

WOW! Need I say more? These guys are hitting like crazy. Jeff Bonds STRIKES AGAIN! Hits his Premium Pick Tryout at pregame. This pick was a daily pick at pregameconsensus.blogspot.com MAN THIS IS CRAZY! These guys won't stop winnning! As you guys already know. I had ANOTHER stop last night OUCH! I can't hit a two game winning streak. But my advice to you guys. Check out my other blog. These guys are winning like crazy. I'll update again tomorrow morning for their picks on college, so be sure to check it out before game time. GL everyone.

Louisville vs. Rutgers

Ok Ok, here it is, everyone is hammering Rutgers tonight, and Louisville is a big public favorite. So i'm going to leave the pick to the consensus (they are 3-0) at www.pregameconsensus.blogspot.com and tonight i'm taking the under at 51 only because Rutgers is going to play a good defensive game tonight.

Jedi Pick Of the Day: Louisville/Rutgers UNDER 51

Redemptive Cynicism

Or Cynical Redemption, perhaps? Chris Masse has spurred me to engage my brain on voting, and I think the best thing I've read in a long time is what Glen Whitman said about Bryan Caplan's Irrational Voter. Caplan says:

But why are there some areas – like politics and religion – where irrationality seems especially pronounced? My answer is that irrationality, like ignorance, is sensitive to price, and false beliefs about politics and religion are cheap. If you underestimate the costs of excessive drinking, you can ruin your life. In contrast, if you underestimate the benefits of immigration, or the evidence in favor of the theory of evolution, what happens to you? In all probability, the same thing that would have happened to you if you knew the whole truth.

In a sense, then, there is a method to the average voter's madness. Even when his views are completely wrong, he gets the psychological benefit of emotionally appealing political beliefs at a bargain price. No wonder he buys in bulk.

And Whitman reflects:

Bryan focuses on economics as an area in which voters are particularly likely to be wrong, and he shows this by contrasting the opinions of voters and professional economists. I find the argument compelling – but then again, I’m an economist. Besides, as I argued in the post linked earlier, economists may be less vulnerable to psychological rent-seeking because their training imbues them with an awareness of trade-offs and a tendency to balance competing goals (since nearly any goal is subject to diminishing returns at some point). Thus, Bryan may be biasing the case in his favor by choosing an area in which the experts are less susceptible to the sort of bias we should be concerned about.

Arguably, one aspect of voters’ irrationality is their credulity about the claims of supposedly public-minded experts. As Bryan’s colleague Don Boudreaux points out, a candidate’s being “pro-teacher” is quite different from the candidate’s being “pro-education.” Similarly, “pro-union” does not necessarily mean “pro-worker.” Yet voters will often conflate the two. Although I agree with Bryan’s overall perspective, I wonder if his deference to the opinions of experts might exacerbate a prominent source of voter error.

You might call it Heisenberg's Uncertainty Principle; I call it baggage. Voter baggage. We all have post-modern 3D Xray glasses on now.

That said, I think that Caplan's antireligious bias may cost him more than anything he is able to measure, at least, according to Pascal's Wager. In sum, Pascal reasons that a Bettor should Buy GOD.EXISTS and definitely not Sell Him. The downside of expiring the contract at 0 is very small (i.e. you aren't going to Heaven, no biggie), compared to the huge upside of ending up in the money--and the huge downside if you are caught short (i.e. you spend eternity surrounded by hot brimstone).

I have 3 words for trading futures contracts, and the same 3 words for the eternal soul:

Risk Adjusted Returns

By another Way: For what does it profit a man to gain the whole world, and forfeit his soul?

Louisville @ Rutgers

For the second week running the Louisville Cardinals face an unbeaten Big East Conference foe on Thursday night TV. Louisville (8-0, 3-0) vaulted to No. 3 in the Bowl Championship Series standings with last week's 44-34 victory over then-No. 3 West Virginia as a two-point home dog. This time around the Cardinals are on the road versus #15 Rutgers which is also 8-0 on the year and 3-0 in Conference play. The Cardinals, who have never opened 9-0, have outscored their opponents 315-122 while racking up 492.6 yards of offense per game. Rutgers has done it with defense, holding opponents to 227.3 yards/game and outscoring them 234-73. Louisville took last year's meeting at home 56-5 as a 21.-5-pt. chalk.

Louisville: 10-3 ATS off a combined score of 70+ points
Rutgers: 6-1 Under this season

Check out www.pregameconsensus.blogspot.com to see what these guys are taking. They're HOT 3-0 on consensus, and went 2-0 on their Daily Picks yesterday. Check out their DailyPicks on tonights game. I'll be posting my play here on this game later today. I just came off a great win on Tuesday's game taking Toledo, hopefully I can push the momentum to tonight.

Masse's response to my response

is here. To be clear, I share the goals stated in his note to me, specifically:

• that US-based (AND offshore) real-money prediction exchanges (a.k.a. betting exchanges) be legalized
• that prediction markets become more mainstream, especially in their forecasting dimension

and I also advocate against noncompetitive markets, including, as Chris puts it "an illegal and unregulated Irish prediction exchange having a de facto monopoly on prediction markets in America, with US citizens and US residents being forbidden to set up on US soil a competitor to this offshore operator. Crazy and unfair."

The material difference between us at this point in time is that I believe increasing the liquidity--more participants in the information markets and more accurate outcomes from that greater participation--will advance our cause more effectively than shutting a monopoly down. The NYSE and Major League Baseball are two market mechanisms that are effective monopolies (by congressional charter), and I advocate that the NYSE become more like Nasdaq and MLB like NFL. But I do not believe that shutting them down improves them, nor improves competition--it destroys it.

We have the same hopes, and the same antagonists. I believe that we are right, and that the current majority of legislators do not appreciate it. But realistically, elected legislators are not necessarily good at public policy or the law, they are good at getting votes. And a majority of voters are not good at public policy or the law, either.

Hopefully this blog is one voice that can change that over time, specifically when it comes to free trading of information futures. Thanks again for calling me out, Chris.

Some additional thoughts for Chris and my esteemed readers

I have had the benefit of sleeping on Chris' letter, and in terms of expressing my own view on what makes for good government, I would say the following 4 attributes:

1. pro-freedom, pro-family: individuals should be allowed to express their personal preferences and advocate for their children and parents

2. pro-market: individuals should be allowed to allocate their resources without barriers

3. pro-property: individuals should be able to transact with counterparties with effective enforcement of contracts

4. pro-stabilization: individuals should be protected from the threats of having their freedom, markets, and property unjustly taken away from them

Most partisan candidates tend to be pro-freedom at the expense of being pro-market, or vice versa. Libertarian sentiment emphasizes the first two, but is mostly silent on the role of government when it comes to property rights and defense. Here's hoping that we see more candidates who can advocate for all of the abovementioned points. Unfortuantely, I did not see any on my ballot in this past Tuesday's elections.

Chris Masse, writes me an open letter

I must respond, as Chris is a good friend, and so I am doing so here and now.

Dear Chris:

I apologize for this delayed response to your letter. I regret not providing specific instructions on how the hundred or so readers of this four-month-old blog should vote in their respective districts, and the apparent confusion this may have caused some.

As I trust an unfettered pricing mechanism as a superior source of information, so I also trust a federalist two-party democracy as a superior form of national leadership transition.

In each case, it is the individual actor who must buy, sell, and vote. Aggregating the actions of all the actors together yields a better outcome than trying to identify a machiavellian proxy to make those buy/sell/vote decisions away from all the actors.

Hopefully, this blog has provided some limited examples of pro-information markets leaders (e.g. Barney Frank) as well as antagonists (John Kyl, scroll down) in its limited lifespan.

My blogging intent, as stated in the header above, is to increase trading liquidity at TS. I believe that increased liquidity in information futures trading will benefit our society, as better information leads to better decision making. The benefits will flow to individuals as well as cooperative groups.

And while I pursue this goal, I do not want to distort the market or election mechanisms. I concede that some actors will make better decisions than others, and in the end, worst case, we get what we deserve. While I can strenously express my own opinion, I welcome that all others do the same, and realize that changing perspectives requires persistence and patience. In sum: I did not see the benefit of categorizing democrats, republicans, libertarians (or FIELD) as worthy of voting for, or against.

Perhaps you could enlighten me as to the type of instructions that I was remiss to provide the esteemed (and realtively few) readers of the blog. Then I can improve, applying what I can learn from you towards our shared goals.

Thanks for speaking to me directly and candidly. I believe we can be stronger partners in the future by wrestling through the issue you have raised.

Sincerely, CB.

The letter states:

My Dear “Caveat Bettor”,

I appreciate your linking to our modest group blog, Midas Oracle. How kind of you. I’m humbled by your gesture.

That said, I asked you a specific question in my previous blog post:

- You urged your fellow TradeSports traders to go to the polling stations en masse (no pun intended) so as to protest the recent damn law and save TradeSports. I made the remark to you that DEMOCRATS, TOO, VOTED FOR THE DAMN LAW IN THE U.S. HOUSE. (In the U.S. Senate too, but there the law was packaged with a Port law.)

- So my question to you (if you don’t mind), my dear “Caveat Bettor”, is this: WHAT ARE YOUR VOTE INSTRUCTIONS, EXACTLY?

I would appreciate a precise answer to my specific question.

I thank you very much for your time and your attention.

(Please don’t hesitate to explain things in plain English. I’m a little bit dumb, as everybody knows on this blog.)

Signed: Chris Masse

"The Dems are coming… the Dems are coming!"

Well a lot has taken place over the last 48 hours. The Democrats just took the Republicans behind the wood shed in the House, their about to take the Senate, and as I am writing this they apparently took out Rumsfeld. For what it is worth this is my analysis.

The Republicans had a lot of support from independent voters, and like all successful political parties had some help from multiple segments. Two main segments that have given the Republicans power have been the religious fundamentalists and the libertarians. The Republicans have failed both over the years, so the question is who will they court in the 08 run for the Presidency? Will they “stay the course” on the moral authority hypocritical high road, or will they steer the party in Reagan’s direction and relearn fiscal responsibility?

My guess is that based on McCain’s contract to win the primary that has just jumped nine points in half a day, the party will start to cater toward the libertarians. For that I am hopeful (the libertarian lean… not McCain which is a whole different subject). The though that five years from now the Democrats will have the means to instill their ideals on us scares me. Just think, five years from now Hillary could be signing a bill to provide national healthcare.

It also makes the Republican back dooring the gambling law that much more disturbing considering our government will get NOTHING done over the next two and a half years.

Post Election Wrap and a Few Words

First off, let me say my call for FL-16 was wrong and SellSellSell (aka WaveRider, WaveWarrior) was right, although he would have to admit it was closer than he thought. Last night was, well, a blood bath for the GOP. I do not have much to say that cannot be summed up by hopefully soon to be Minority Leader Mike Pence:


WASHINGTON, DC - U.S. Congressman Mike Pence released the following statement today on the GOP's midterm election loss:

"Election day 2006 will be remembered as a turning point in American political history. Twenty-five years after the Reagan Administration came to Washington with a conservative agenda of limited government, the American people chose a different course.

"It is the duty of the losing party in a free election to humbly accept defeat and to acknowledge that the people are sovereign in the People's House.

"As we examine the results of this election, it is imperative that we listen to the American people and learn the right lessons.

"Some will argue that we lost our majority because of scandals at home and challenges abroad. I say, we did not just lose our majority, we lost our way.

"While the scandals of the 109th Congress harmed our cause, the greatest scandal in Washington, D.C. is runaway federal spending.

"After 1994, we were a majority committed to balanced federal budgets, entitlement reform and advancing the principles of limited government. In recent years, our majority voted to expand the federal government's role in education, entitlements and pursued spending policies that created record deficits and national debt.

"This was not in the Contract with America and Republican voters said, 'enough is enough.'
"Our opponents will say that the American people rejected our Republican vision. I say the American people didn't quit on the Contract with America, we did. And in so doing, we severed the bonds of trust between our party and millions of our most ardent supporters.

"As the 110th Congress convenes next year, Republicans must cordially accept defeat and dedicate ourselves to advancing our cause as the loyal opposition knowing that the only way to retake our natural, governing majority, is to renew our commitment to limited government, national defense, traditional values and reform."


I will be getting married this weekend and in Jamaica the following week. Hope you all have a great weekend.


Update: A few words from Jeb Hensarling


Tuesday, November 7, 2006 (202) 225-1841
Hensarling Statement on Elections“Republicans have experimented with Big Government and it has failed.The era of Republican Big Government is over”
WASHINGTON, D.C. - Rep. Jeb Hensarling (TX-05) today issued the following this morning following Republican election losses:
“I am extremely disappointed with the outcome of today’s elections. Our party will see many good public servants leave our ranks, taking our Majority with them. I am deeply saddened by their departure, and I wish each of my departing colleagues and their families the very best.
“With loss comes a time for reflection. As Republicans, it is time for our party to look in the mirror and reflect on where we have gone wrong. Today, the American people have sent us a clear message, and that message is that we’ve deviated from our principles and values.
“The American people empowered us because of a shared commitment to reform government, to balance federal budgets, and to promote individual freedom while remaining true to our American values. Instead, over the last several years, Republicans have experimented with big government, and we have now seen the result. The Bridge to Nowhere has led us here. The era of Republican Big Government is over.
“There is no doubt that great anxiety over the War in Iraq played a role in our defeat. There is also no doubt that the American people and our fellow Republicans grew sick and tired of the scandals that too often plagued our Majority. Yet, all of the problems that have led to the defeat of our Majority are traceable back to one issue: an out-of-control government.
“To return to our Majority, we must renew our commitment to the principles of Ronald Regan and the Contract of America. Our core vision of limited government, individual empowerment, a strong national defense and traditional values enabled us to effectively establish a trust with the American people. We will now return to these principles and communicate our vision effectively, building a new Republican Majority in the process.”

Check out Midas Oracle, Prediction Markets Blog, if you haven't yet

I've been crazy busy, and should have blogrolled my good friend Chris Masse's new joint venture a month ago. Chris is the subject matter expert for prediction markets.

The latest link is relevant to today's election, and those handicapping with the help of exit poll data:

Biased And Inaccurate Predictions Have Led To Poor GOP Exit Poll Showings In Past Three National Election

UPDATE: Another nice link from Midas Oracle, to OpinionJournal's John Fund reporting on how exit poll reporting will have reduced bias. It starts:

This year the networks say they are guarding their exit poll results as if they were crown jewels. The results will be delivered to a "quarantine room," access to which will be granted to only two staffers from each network and wire service, who must surrender all cell phones, BlackBerrys and similar devices before entering the room. Such precautions are designed to prevent preliminary results, often wrong in 2000 and 2004, from being posted on Web sites like the Drudge Report.

Only at 5 p.m. will the occupants of the quarantine room be allowed to reveal the exit polls to their bosses. The networks claim to have completely revamped their exit-poll methodology, which in 2004 had surveys in which the results, collected mostly by female graduate students, consistently favored Democrats. The changes will mean the networks will be slower to call the winners. That and the difficulty of adjusting for the large number of absentee ballots could mean a longer night than usual.

Friends of Tradesports: Please vote today!

My good friend in the Pit, drugtest, reminds me that legalized information futures trading is not a major issue for our nation. However, may I suggest that you still consider it as a tertiary factor as you choose who will govern you in 2007 and beyond.

UPDATE NCAA Football Nov. 7

Hello again everyone, i'm back and ready to go. I've been out with a broken computer (darn viruses) and plus I was taking a break. While I was gone, I had a friend start another blog for me to post up my picks, because there have been alot of people emailing me about when i'm going to get my picks back up again. So I had a friend make another blog. I'll still be posting on here, and also on my blog. He's also done a good job with keeping track with Pregame and posting their consensus. They've gone 3-0 on consensus and I believe they've been hammering their daily picks. So if you want to check it out go to pregameconsensus.blogspot.com From here i'll leave you guys with tonights Toledo N. Illinois Game

Toledo @ N. Illinois

It's Tuesday Night Football from the Mid-American Conference as Northern Illinois hosts Toledo. The host Huskies dropped to 5-4 a week ago Saturday with a 24-14 loss at Iowa but got the cover as a two-touchdown dog. Covering is something NIU has not been doing this year: that got it to 2-6 ATS on the year. At home the Huskies are 3-1 straight-up but 0-3 ATS with their last a 43-21 win over Temple as a 31-point chalk. NIU is 3-2 in league play and won at Toledo last year 35-17 as an 11-pt. dog. Before that the Rockets had won nine straight in the series going back to 1992 and were 6-0 ATS. Toledo has won the last five at NIU, going 3-0 ATS, but has fallen on hard times this year with a 3-6 record and a 3-5 spread mark. .

Toledo: 7-0 Under away off a conference win

Northern Illinois: 11-2 ATS after gaining 125 or less passing yards

JEDIMINDTRICKS Pick Of the Day: Toledo +12

Is the Sleeper awakening?

Novak agrees, now the New York Times is catching up:


http://www.nytimes.com/2006/11/02/us/02foley.html?ei=5065&en=e89d75b8939debb7&ex=1163048400&partner=MYWAY&pagewanted=print


Could be the House Spoiler!

Hold onto your hats; we are heading under 12000

Nonfarm productivity was reported as 0.0%. Unit labor costs continue to rise quickly at a 3.8% pace (although this also means that households are enjoying significant income gains). Jobless data was fairly steady.

I am sticking with my DOW.TOUCH.11600.JAN2007 call from last month.

Dem Value/Sleeper Plays

Unfortunately, my original post was accidentally deleted as I was allowing pop-ups to run spell check so my analysis will not be as in-depth.

Dem Value Play:

NM-01.HOUSE.DEM This race has pitted Democratic challenger Patricia Madrid against incumbent Republican Heather Wilson. Early polling had Wilson up but has since reversed and is trending to Madrid who now has the lead. This district went for Kerry 51/48 in 2004 and with Madrid last trading at 44 and Wilson at 30; this is a toss-up race/lean dem that is also a strong value.

Dem Sleeper Play:

NV.GOVERN06.DEM The incumbent Republican Guinn is no longer running for office and this pits Republican Jim Gibbons vs. Democrat Dina Titus. Gibbons has had a lead in every poll except for a recent Zogby Interactive poll where he was trailing by 1% pt. What makes this race interesting is that Gibbons has not received Guinn's direct endorsement and his lead is now within the margin of error according to a recent Rasmussen poll with Gibbons lead of only 2% points. His lead has been shrinking steadily and this state went for Bush 50/48 in 2004. Right now Titus last traded at 25 vs. Gibbons at 75. This could be an upset that would return nicely.


UPDATE: Robert Novak has surprisingly included FL-16 as a GOP retention in his final outlook, which just so happens to be my sleeper pick for the GOP. http://www.humanevents.com/evansnovak.php?id=17809#2

Full Disclosure: I do not own the above stated positions, my money got taken from me in the infamous DOW -50 close glitch.


Clarification: I had originally posted this on the first attempt before I accidentally deleted it. There are two main theories about the election: 1) there will be a Democratic "wave" or 2) the GOP still has a shot at keeping both Houses. The above picks try to keep both theories in mind, that in a close race either has a shot at going to the Dems. I personally subscribe to theory #2; however, if there is a wave these races are definately in play, and NM-1 is a key race for both parties.