Newt’s Not the News: Prediction Markets Double Rick Perry’s Chances for GOP Nomination

Photo: markn3tel

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.

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  1. Eric in Lubbock says:

    Does the timing of the prediction market rally suggest insider trading?

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  2. Marcus Kalka says:

    We must recall that Gov. Rick Perry was the one who mentioned the possibility of Texas seceding from the Union in the future.

    http://politicalticker.blogs.cnn.com/2009/04/16/texas-governor-says-secession-possible/

    And now Gov. Perry may run for President?? I’m a bit confused [and concerned] as to whom President Perry’s loyalties would lie.

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    • Tea Party Junkie says:

      Rick Perry’s quote that drew so much attention (he’d just been asked why some in a crowd had chanted “secede”): “We’ve got a great union. There’s absolutely no reason to dissolve it. But if Washington continues to thumb their nose at the American people, you know, who knows what might come out of that. But Texas is a very unique place, and we’re a pretty independent lot to boot.”

      Perry has helped Texas “succeed,” having created more private sector jobs than all other states combined (see this graph: http://www.willisms.com/archives/2011/06/trivia_tidbit_o_931.html). Obama, meanwhile, has seceded from the Constitution, from reality, and from prosperity.

      Hot debate. What do you think? Thumb up 11 Thumb down 10
      • Uthor says:

        Did he help “create” those jobs, or are they just jobs that have moved into the state from other states? One is impressive, the other does nothing to help national unemployment.

        The population in Texas has increased by 4.2 million (http://www.usatoday.com/news/nation/census/2011-02-17-texas-census_N.htm), so adding 700,00 jobs doesn’t seem that impressive.

        Also, the population in Texas is large. 700,000 jobs doesn’t really mean much without comparing it to the size of the state. New jobs in Texas are 2.96% of the total population. AZ added 1/8 as many jobs as Texas, but compared to total population, they only did half as well (1.36%). Utah has also added only 1/8 as many jobs as Texas, but that represents 3.23% of the total population, which is better than TX.

        Unemployment in Texas was hovering around 4% in 2001 and is now around 7.5-8% (http://www.google.com/publicdata?ds=usunemployment&met_y=unemployment_rate&idim=state:ST480000&dl=en&hl=en&q=unemployment+texas). He may have created a lot of private sector jobs, but obviously it’s less than population growth.

        The jobs numbers are fairly impressive compared to most of the country, but no where near the best. The economy of Texas as a whole is in the fourth quintile, doing slightly better than the country as a whole (2.8% growth versus 2.6% growth), but there are 17 states doing better than it right now. (http://www.bea.gov/newsreleases/regional/gdp_state/gsp_newsrelease.htm)

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  3. mfw13 says:

    Governor Perry is dead in the water as soon as his shenanigans surrounding the wrongful execution of Cameron Todd Willingham are revealed. Perry basically signed off on the execution of a man he knew to be almost certainly innocent for political reasons.

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  4. kruijs says:

    Please be sure to include other prediction markets on this topic as well. example:
    http://www.knewthenews.com/Tag/GOP

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