Breaking: Pawlenty Crashes, Romney Rejected, Sarah Palin Surges

In a blog post entitled "Pawlenty Out of the Running for McCain's Vice President," the NY Times' Michael Cooper wrote: "Gov. Tim Pawlenty of Minnesota said in a radio interview on Friday morning that he planned to be at the Minnesota state fair on Friday, not here in Dayton with Senator John McCain. When he was asked if that means he would not be Mr. McCain’s running mate, Mr. Pawlenty told WCCO radio that 'I think that’s a fair assumption.'’’

So much for this Red State report from last night.

NBC and FOX claim Romney isn’t McCain’s selection, sending his shares spiraling more than 65 points on Intrade in the last hour.

Alaska Governor Sarah Palin, however, is up more than 45 points this morning in frantic trading. Mark Halperin reports that a a Gulfstream IV arrived in Middletown, Ohio from Anchorage, Alaska Thursday night. Middletown is not far from Dayton, where McCain seems poised to shock the punditocracy with his pick.

Republican VP Market Roundup

With McCain slated to announce his VP choice later today, here's the latest on where the prediction markets stand:

Intrade
Tim Pawlenty - 65%
Mitt Romney - 22%
Joe Lieberman - 5%
Carly Fiorina - 5%

Predictify (242 predictions)
Mitt Romney - 48%
Tim Pawlenty - 24.4%
Other - 13.3%
Mike Huckabee - 5.4%
Kay Bailey Hutchinson - 5%
Joe Lieberman - 4.2%

HubDub (866 predictions)
Mitt Romney - 53%
Other - 39%
Joe Lieberman - 6%

CNN Political Market
Tim Pawlenty - 81.6%
Mitt Romney - 14.3%
Sarah Palin - 1.78%
Joe Lieberman - 1.16%

FTPredict
Tim Pawlenty - 64%
Mitt Romney - 26.9%
Other - 8.1%
Hutchinson - 4.1%

Pawlenty Peaks

CNN's Wolf Blitzer just announced that Tim Pawlenty, the Minnesota governor on McCain's ever-shrinking VP short list, abruptly cancelled his appearance this afternoon on The Situation Room. As the speculation reaches a fevered pitch with word that McCain has made his choice, The Atlantic is also reporting that Pawlenty cleared his schedule for today and tomorrow.

News that Pawlenty might be McCain's pick appears to be moving political prediction markets. On Intrade, the Minnesota governor peaked today at 50, up more than 25 points since yesterday's close. Although Mitt Romney still leads the pack of would-be VPs at 50, he's down nearly 25 points in recent trading, and is now only 10 points ahead of Pawlenty.

The Bottom Line - If you haven't purchased any Pawlenty yet, don't miss your chance. While most pundits are still predicting Romney, Politickr thinks this news means it's time to diversify.

Politickr's Picks

With the big news reportedly only "hours away," according to the AP, here's what Politickr recommends:

Buy Biden - We're with Huffington, Brooks, and just about everyone else on this one. Buying Biden is still a no-brainer. He's now trading at almost 60 on Intrade, and he remains the clear favorite.

Buy Edwards - No, not that one. Chet Edwards, the Democratic congressman from George W. Bush's district, reportedly made Obama's short list. While we don't recommend political day traders dig deep on this one, we do think it's a good idea to cover just in case Obama pulls a last-minute surprise.

Short Sebelius - The Kansas governor doesn't stand a chance. With polls showing Clinton supporters still feeling snubbed, there's no way Obama will choose another woman just to spite them. She's only trading at 50 cents/share, but shorting Sebelius can still make you some easy money.

Short Clark - Although the general's stock soared after the invasion in Georgia, there's no way Obama will go with this unproven wild card. Currently trading at 10, Wesley Clark is a screaming short.

Short Clinton - Her supporters are still holding out hope, but the prospect of The Dream Ticket looks dead (despite the aforementioned polls). Still, we were surprised to find Clinton in second place among VP hopefuls in afternoon trading, edging out Evan Bayh. At 15/share, it's time to sell Clinton.

Mitt Might Be It: How Romney Can Make You Rich

McCain may be banking on Romney's business expertise to help his own political fortunes, reports Time's Mark Halperin. Citing two unnamed Republican sources, Halperin writes that the presumptive Republican nominee has settled on the former Mass. Governor as his VP pick.

Whether or not Mitt is it, the former Bain analyst and Republican presidential candidate will do wonders for your political portfolio. The news that McCain had decided on the long-rumored, so-called "safe choice" sent Romney shares soaring this morning in early trading on Intrade.

While Romney's stock is already up nearly 23 points today, there's plenty of up side to investing now. Republican operatives, eager to deflect attention away from Obama's imminent VP announcement and happy to have someone other than Lieberman to discuss, are likely to ride the story all day on cable news.

Bottom Line - On the day after McCain was pounded for forgetting how many mansions he has, pundits will surely debate the wisdom of his decision to go with the richest Republican as his Number Two. Still, there's no debating whether to buy Romney's VP stock right now. Bet the house on it.

Bet Big on Biden

Howard Fineman is convinced, and it's time to take action. In an analysis on MSNBC's website, he said: "Barring a big surprise or last-minute change of heart, the choice is likely to be Sen. Joe Biden of Delaware, chairman of the Foreign Relations Committee."

Chuck Todd, appearing on Countdown with Keith Olbermann tonight, pointed out the grin on Biden's face during his non-denial denial and noted the top VP contender's decision to go golfing instead of sitting home and sulking today was telling.

Bottom Line - While it would have been better to have gotten on board the Biden bandwagon last week, when he was still selling for $1/share, it's not too late. The Biden stock is still a steal at its current $3/share, and is likely to spike, at least in the short term, while the Biden speculation builds. Buy as much as you can, and, just to be on the safe side, short Clinton, Clark, and Sebelius.