Wednesday, April 30, 2014

Election 2016: the Early Handicapping

Most readers of this blog know I was a big fan of Intrade, which set up publicly traded markets in current events, including political elections. As you may know, betting markets tend to have greater predictive accuracy than polling because people are more honest with their money than they are with an anonymous pollster calling at dinner time. I used data from Intrade to construct my electoral model, which had great success the last three elections.

Alas, Intrade's founder died within 100 feet of the summit of Mt. Everest, and there were some financial irregularities, so the site was shut down. It was a blow. Fortunately, I have found a substitute of sorts, Betfair. They don't have as many political markets, but at least we can have a peak at where the early money is for 2016.

First the Republicans...

Odds of Nomination

Jeb Bush                 18%
Marco Rubio          15%
Rand Paul               10%
Chris Christie           9%
Scott Walker            6%
Paul Ryan                5%
Ted Cruz                  5%
Bobby Jindal           4%
Mitt Romney           3%
Mike Huckabee       3%
Rick Perry               1%

There are markets on others, but this list probably includes all the serious possibilities.

This is both a more conservative group and a better-qualified group than last time. It's also wide open, which should make for fun. Some observations:

Note: my buy, sell, and hold recommendations are versus the current odds.

Jeb Bush: With the Christie sun setting over the George Washington Bridge, the establishment is desperately trying to draft Bush. Anyone but those Tea Partiers! He speaks Spanish, and he's from a big swing state, but really? Another Bush? Still, the establishment is not without power, and more Christie supporters will likely move over. Hold.

Marco Rubio also speaks Spanish and is from Florida, although short on experience. The base will think him squishy on immigration, but solid otherwise. Has impressed his Senate colleagues, to which I say, who cares? But the Tea Party already likes him and it might make him acceptable to the establishment. Marginal Buy.

Rand Paul is trying to craft a new alignment of social moderates and free market conservatives. Has his father's database and recently got a standing O at Berkeley. Great debater. Buy.

Chris Christie: We all know about Bridgegate, which was blown out of proportion. If it were only that, Christie might have survived. But now there are serious conflict of interest allegations around the Port Authority, and that may be too much. Further, the base will not forgive "the hug." My prediction: he doesn't even run. Sell.

Scott Walker may be the most mild-mannered stud on the planet. You might think you were talking to an accountant, but this guy stared down some vicious unions as well as a six-inch stack of death threats to win the day on labor reform. The results have been spectacular for Wisconsin. Great experience, plus being from a left-leaning, but possibly-in-play state make, plus appeal to establishment and Tea Partiers alike make Walker compelling. Needs to survive re-election, though, and needs to find some charisma. Strong Buy.

Paul Ryan did a credible job running for Veep, but he didn't really light anyone's fire, did he? Came across vaguely nebbish. Hard to see him finding his way in what looks to be a much tougher field than '12. Sell.

Ted Cruz is a formidable debater and a huge intellect. I have written here about meeting him a few months ago. The base loves him but the establishment thinks he's a dangerous loose cannon. But here's the thing, I don't think the base is going to give a crap what the consultants and Beltway Republicans have to say this time, because they've been burned too many times by people saying, "We have to nominate someone who can win," who then, of course, doesn't... Cruz does have a hang-dog look about him, and the media has somewhat succeeded in Palin-izing him. At 5%, though, he's a Marginal Buy.

Bobby Jindal: Great guy, great experience, but are we ever going to get over "The Speech?" Sell.

Mitt Romney: Hmm. I've heard some establishment guys lately talking about how it's possible to "re-invent" yourself as a politician and come back to win the White House. Think Nixon. Well, maybe, but I don't see it in a potentially much-tougher field than last time. Still, at 3%, Mitt's a Hold.

Mike Huckabee: not sure about Huck, but he's popular with the base, and will do well in Iowa. Unclear if he will run. Hold.

Rick Perry has done wonders in Texas, and his message is great. Still, some things you never recover from, and in Perry's case, it's forgetting the names of the three federal departments he'd eliminate during a debate. Hey, we've all had those moments, but this makes it too easy for the media to cast him as another dumb Texan. Sell.

The only person I couldn't find odds on that deserves serious consideration is John Kasich. Never dismiss a potential candidate from Ohio.

Next up: the Democrats. Is Hillary inevitable? Maybe, maybe not...