OK, so Newt Gingrich’s senior staff have quit. But Newt’s not the news. At least according to the political prediction markets. The real news is that Texas Governor Rick Perry is likely to enter the Republican nomination race. The connection, of course, is that many of the staffers who quit have close ties to Governor Perry.
The figure below tells the story. Since yesterday’s announcement, you can see the markets have re-evaluated Perry’s chances of winning the nomination from around 5%, up to 11%. There’s a tip here for newsgatherers: Focus on the details, and you’ll notice that the Perry’s prediction market rally began just after 11am. But the story broke three hours later, just before 3pm.
Of course, the rally was so strong because much of the uncertainty about Rick Perry was never about his viability— uber-pundit Nate Silver reckons he’s got a great shot—but rather about his intentions. And so this signal about his intentions has a large effect.
By contrast, Gingrich wasn’t particularly viable at the start—trading at around a 2% chance of winning—and his odds have slipped to less than 1%. So he’s gone from being a non-story to being a non-story.