Here Comes Health Care Reform

In a blog post this morning headlined "Health Care Resurrection," Paul Krugman alluded to the latest Intrade odds on reform. The likelihood of a health care overhaul is now trading at 62.5%, which is up nearly 10 points since yesterday and over 20 points since early last week.

Krugman claims he isn't completely convinced of the predictive power of political prediction markets, but he is keeping a close eye on Intrade.

"Betting markets don’t have any mystical power, but they do summarize conventional wisdom pretty well," he said, "and judging from Intrade, health reform has gone from a long shot to more likely than not."

But Business Insider suggests there's a better reason to pay even closer attention to the Intrade price on health care than Krugman purports: "What we're witnessing is the equivalent of political insider trading," said Joe Weisenthal. "This doesn't just reflect conventional wisdom. No, this is Washington DC insiders speaking here."

Weisenthal contacted Intrade CEO John Delaney, who said that a lot of the volume on the health care contract is coming from the Washington DC area.

The Bottom Line - If you haven't already invested in the health care contract, now might be a good time to get on board. Senator Specter just told MSNBC "momentum is building." Dan Rather, Katty Kay, Andrea Mitchell, and Joe Klein all predicted on Chris Matthews' Sunday show that health care reform will pass. Health and Human Services Secretary Sebellius told David Gregory on Meet the Press on Sunday that "we'll have the votes." Rachel Maddow predicted last night on her show that health care reform can't be stopped. Even if Pelosi loses her grip on the House and Congressman Stupak and his Blue Dog supporters somehow thwart the final effort, the contract is likely to keep climbing on Intrade in advance of the final whip count.

Politickr TV

Politickr, which tracks daily developments at prediction markets around the web, is going digital. Check out our first video on today's political trading news, and chime in with any ideas for future coverage.

The Race to Replace Gillibrand in the House

Scott Murphy, the conservative Democrat running to replace Kirsten Gillibrand in the NY-20 special election next week,  now leads his Republican rival by 4 points according to the latest poll released by Siena Research. 

In very early trading on Intrade, however, the story is quite different. Republican Jim Tedisco still enjoys a 60-40 margin. Obviously, since only 61 shares have been traded, the contract is not yet a reliable indication of where things are headed over the weekend.  

Wiser Than The Crowd, in a post published before this morning's latest poll results were released, pegged the race at 50/50.

It's also unclear if and how the hatchet job published in today's NY Times about Kirsten Gillibrand's time as a lawyer at Davis Polk & Wardwell, a firm at which Politickr also once worked, will impact the race in the final weekend. 

Bottom Line - This is bound to remain a tight race, but there's an opportunity for some short term gains if you buy undervalued shares of Murphy now. He will likely benefit from even tepid endorsements from the White House and a last-minute push from the DNC.

Follow Politickr on Twitter

For breaking political prediction market developments, please follow Politickr at http://www.twitter.com/politickr.