March Madness for Politics

If you, like us, had an even harder time with your NCAA basketball bracket this year than you did with your Palm Beach Butterfly Ballot, MSNBC is offering a way to redeem yourself: A new interactive feature on their website allows you to play pundit and predict John McCain's running mate from a field of 32 contenders.

Even more enticing than the Republican Veepstakes itself is the scintillating, Sports Center-esque commentary from political reporter David Gregory and political director Chuck Todd that accompanies the contest. Here are some highlights on how they're handicapping the first round:

Sarah Palin v. Rob Portman:
David Gregory - "I'm going to go for Portman here - a former leader in the House, southern Ohio, strong conservative, young, dynamic, future of the party. I think he's a very attractive candidate to be a number two."

Chuck Todd - "I tell you Sarah Palin - she's a mother, five children, just gave birth, sitting governor of Alaska. Conservatives love her. Don't be surprised if she's got some grassroots movement."
Meg Whitman v. Kay Bailey Hutchison
David Gregory - "Kay Bailey Hutchison has been around a long time. Too establishment I think. Meg Whitman, on the new economy, could sure up a real potential weakness for McCain in a year when this could be issue #1 that people vote on."

Lindsey Graham v. Bobby Jindal
Chuck Todd - "Bobby Jindal - When you can biologically be McCain's grandson, it might not be the right pick."

Mike Huckabee v. J.C. Watts Chuck Todd - "Mike Huckabee could do well in something like this. His voters still seem to be fairly energized about him."

David Gregory - "J.C. Watts - Does he pick an African American to try to balance out Obama? It's a little cynical to reach for someone who doesn't necessarily have the national following just because he's black."

While many of the pairings are thought-provoking, several of the seedings seem strange. How Jeb Bush secured a #2 seed in a year when the Bush name is poisonous in politics defies reason. Condoleeza Rice, who has repeatedly denied any interest in the number 2 slot, also somehow wound up with a #2 seed. Clearly the bracketologists behind the Republican Veepstakes weren't looking at Intrade, where Condi has been trading at around 4.5 for the Republican VP nomination.

Take a look at the screen shot of our picks and chime in with your own in the comments.

Edwards' Stock Tanks After Obama Endorsement

John Edwards' endorsement of Barack Obama in Michigan yesterday may have buoyed his own political future, but it did nothing to help the political futures of traders banking on the former NC senator's place on the 2008 ticket. By quickly slamming the door on a VP run in the full court press that followed his endorsement, Edwards sent shares of his VP stock on Intrade plummeting 7.5 cents on the day.

Asked by Matt Lauer on the Today Show this morning whether he'd be Barack Obama's vice presidential pick, Edwards dismissed the possibility. "No, won't happen," he said. Pressed by Lauer to categorically deny any chance of a 2004 replay, Edwards was happy to oblige. "It's just not something I'm interested in," he said. See the full clip below.



Bottom Line: Holding Edwards stock at this stage is even more futile than hoarding Hillary's. Put your money on Clinton for VP a(t least in the short run, until the press coverage reaches a crescendo), or take a look at The National Journal's speculation and pick a favorite.

CFTC Considers Regulating Prediction Markets

In what may be the biggest news for the nascent industry yet, the Commodity Futures Trading Commission (CFTC) is hinting that it may be ready to regulate political prediction markets. A recent press release touts the evolution of markets and encourages members of the public to submit comments about whether they should be grantd full legal status in the United States:

CFTC Requests Public Input on Possible Regulation of “Event Contracts”
Washington, DC – The Commodity Futures Trading Commission (CFTC) is asking for public comment on the appropriate regulatory treatment of financial agreements offered by markets commonly referred to as event, prediction, or information markets.

During the past several years, the CFTC has received numerous requests for guidance involving the trading of event contracts. These contracts typically involve financial agreements that are linked to events or measurable outcomes and often serve as information collection vehicles. The contracts are based on a broad spectrum of events, such as the results of presidential elections, world population levels, or economic measures.

“Event markets are rapidly evolving, and growing, presenting a host of difficult policy and legal questions including: What public purpose is served in the oversight of these markets and what differentiates these markets from pure gambling outside the CFTC’s jurisdiction?” said CFTC Acting chairman Walt Lukken. “The CFTC is evaluating how these markets should be regulated with the proper protections in place and I encourage members of the public to provide their views.”

See full press release here

Obviously, great news for traders, entrepreneurs, and armchair prediction-market pundits alike. Whether you've studied the accuracy of prediction markets, written about the tax implications of legalizing them, or are simply looking for a recession-proof way to make a bundle while Wall Street gets walloped, it's time to chime in. Submit your comments to secretary@cftc.gov.