Recovering from The Beltway Bailout

Like the Secretary of the Treasury, the President, and the House leadership, we are also licking our wounds from yesterday's calamity in Congress.

Clearly, Politickr wasn't the only one to bet big on the rescue bill. 

If you, too, failed to bail out on your Intrade bailout contracts before the collapse, here's what you can do to get back on your feet:

Buy Barack - If you're still holding out, it's time to get on board the Barack bandwagon before this week's Palin-Biden debate. With Palin's political stock now plunging faster than financials on Wall Street, and with every sentence she utters provoking similar shudders, Barack obviously stands to benefit. Although he is currently overpriced at nearly 63 on Intrade, there's no telling how high he could go if the much-harried hockey mom has another cringe-inducing night. 

Short Palin - The above notwithstanding, we still think it's unlikely the McCain campaign will follow Fareed Zakaria's advice and throw Palin under the bus, even if the wheels are nearly off the Straight Talk Express. Then again, after a string of uneven weeks and downright dismal poll numbers for the Republican ticket, Steve Schmidt, McCain's head political strategist, could call for a new distraction. Bank on Palin to stay in place, but don't forget this is a campaign prone to suspending itself.

Buy Democrats to Hold the House - The contract, which is currently trading at around 94, is a good way to balance out riskier investments. After all, if the Democrats don't manage to hold the House this year, all bets are off.

Short Biden to be Withdrawn - Even though die-hard Hillary supporters still maintain there's no way they'll support Obama, don't look for the Demoncratic nominee to placate the PUMAS with a last-minute VP switch. The Biden-t0-be-Withdrawn contract is only selling around 5.5, but shorting it is a sure way to make money in these uncertain times.

 

   

   

Buy Wall St. Bailout Contracts Now

There's one obvious way Main Street can benefit from the unprecedented Wall Street bailout - by buying bundles of stock in the impending Congressional approval of the rescue plan.

While you were sleeping, Speaker Pelosi and Secretary Paulson emerged to announce that they'd ironed out a tentative deal. 

As of this writing, the contract on Intrade for Congressional approval of the bailout is selling at 86, suggesting that traders are still asleep at the switch. As a result, there's easy money to be made for early risers.

Sure, Politickr admits that it's entirely possible Congressional Republicans could once again scuttle the deal. The chance, however, that this bailout breakthrough will collapse is remote since the word from Washington is that both parties are now on board.

Bottom Line - There's clearly something ironic about buying stock in the biggest Wall Street collapse since the Great Depression, but it's far less risky than actually buying stock on Wall Street these days. With Congressional approval seemingly imminent (certainly by Monday), it's an opportunity you can't afford to miss.

David Brooks: Bet on Obama

David Brooks, the conservative New York Times columnist, urged the presidential campaigns to "double down on weirdness" in a column last week that argued Obama was at his best early on in the campaign when he was at his most unconventional. While Brooks' advice to political traders was less explicit, he implied on the NewsHour with Jim Lehrer on Friday that wise traders should be doubling down on Obama. 

"I still think it's very unlikely McCain is going to win," said Brooks. "I still think the McCain campaign is basically like a football team with a weak offensive line. They have pulled off some good razzle-dazzle plays to stay close, but the fundamentals are so terribly against them."

Despite the tightening polls and renewed hand-wringing by breathless Democrats (noted in Gail Collins' column), it's not time for Obama to panic, said Brooks. "If I were them, I would not be changing strategy," he said.

Bottom Line - Traders should also not panic. The sudden Obama sell off that followed Palin's RNC speech provided a good opportunity to double down on the Democrat. If you haven't bought Barack's stock lately, now is the time to heed Brooks' advice. Obama is trading below 50 on Intrade and several points behind McCain. If nothing else, he's bound to rebound at least several points in the short term. Cash in while you still can.

 

Join Politickr on Facebook

Politickr is calling on all political traders to join our community on Facebook. If you're interested in talking about your trading strategy, tracking prediction market news, teaching newcomers how to trade, or just helping to develop our site, look for the "political prediction markets" group on Facebook.


Here's some of what we have planned in the coming days:

• Meetups for traders looking to connect with others active on Intrade
• A daily newsletter to keep traders aware of political prediction market developments
• Seminars on trading strategies and how beginners can get started on Intrade
• The Politickr Fund

If you have any questions or suggestions, or if you just want to be kept in the loop about Politickr developments, email Politickr at gmail.

Bill Clinton: Bet on Barack

Bill Clinton, who not long ago famously criticized Barack Obama's stance on Iraq as "the biggest fairy tale I've ever seen," is now foreshadowing a fairy tale ending on Election Day. With his party on the mend and his own political stock finally showing some strength, the former president-turned pundit-in-chief is doubling down on a new prediction: Barack Obama is going to win big!

"I predict that Senator Obama will win and win pretty handily," said Clinton, who met Barack Obama for lunch at the former president's Harlem office.

For his own part, the Democratic nominee seemed convinced. "He knows a little something about politics," said Obama.

Bottom Line - If you buy the fact that Bill Clinton has regained his magical political touch, it's time to buy Obama on Intrade.

Matthews: 80 Million Americans Will Watch First Presidential Debate

Politickr is as giddy as Chris Matthews to watch the first presidential slug fest slated for Sept 26. Still, we think the Hardball host may have gone a tad too far when he predicted on his show that at least 80 million people would tune in on a Friday night for the first presidential debate.

Mathews made his own prediction after citing some statistics he said he had his intern dig up about the first presidential fireworks between Kennedy and Nixon. More than a third of Americans reportedly tuned in for the first presidential debate in 1960, which, coincidentally, also aired on Sept 26. What Matthews failed to mention, however, was that Sept. 26 fell on a Monday in 1960.

When asked by the host whether an equal or greater proportion of Americans (100+ million) would tune for the Obama-McCain debate, his guests could have been forgiven for responding with Matthews' signature "HA!" Or they could have simply referred him to this.

While Intrade has yet to announce a contract on the size of the audience for the first debate, politickr has suggested one. Let the trading begin!

Countdown to...Oct. 15?

NBC News Political Director Chuck Todd, appearing tonight on Countdown with Keith Olbermann, predicted that the 20-month election campaign will come to an early end.

"Because there's so much early voting in this country, where the race is on October 15 is where it's going to be," said Todd.

Approximately half the states allow for some form of early voting, according to the National Conference of State Legislatures. Still, it should be noted that Virgina, New Hampshire, and Ohio are conspicuously absent from that list.

Any predictions on where Intrade will be on Oct. 15?