Today's post comes to you from The Sneak, my brilliant and wonderfully understanding girlfriend. Her father has done extensive humanitarian work in Honduras, and she has traveled there with him on several occasions.
A lot of conflicting reports coming out of Honduras. I think one of the things news outlets up here don't understand is that their ratio of politically interested people to people with political power is completely different than ours. Hondurans have a lot of free time and really minimal general education. It's incredibly easy to get people to rally behind a candidate, but there's not an effective means of getting information out/controlling its spread for a largely illiterate population. The most common campaigning technique is still driving around in a truck and talking out of the roof-mounted loudspeakers. Political rivalries there are honestly more like sports rivalries than anything else, deeply felt but not deeply thought. It allows the illusion of flourishing, passionate democracy while concentrating actual power in the hands of a few wealthy familes. Honestly, I didn't see much difference between modern Honduras and the plantation system at higher levels of political organization.
One of the things that's kept Honduras politically stable compared to other countries in the region for the past 25 years is also one of the things that's kept its government inefficient: that iron-clad constitutional term limit. Dad's actually in pretty good with a former beloved president, Carlos Flores. We met his wife randomly and it turns out she's from a tiny town in Tennessee - they met at Bible college in the States, and she's awesome. Flores was a really great president for the country, rebuilding after Hurricane Mitch and cracking down on crime. Too bad, out at the end of the term limit. No way to ensure follow-through with his policies, just hope the next guy thinks they're important enough to keep funding. This is a poor way to run a country that doesn't already have a stable legislative culture, but an excellent way to keep a popular president from becoming president for life.
Enter Maduro, Flores' successor. Maduro is the Honduran John Walsh: his son was kidnapped and killed, highly publicized. He ran primarily on being tough on crime, the number one issue for more conservative Hondurans. I'm pretty sure saw him speak once in the front of the hotel where we used to stay - I didn't realize he was going to be important then. Seriously, we were there to have a Coke in the air conditioning. Being president of Honduras is a little like being the mayor of Boston on the international recognition scale.
He was really, really popular with the common people and acceptable enough to the upper caste (educated in the States, career diplomat/politician). But there was a problem - he didn't fit the constitutional requirement of being a natural-born Honduran citizen. You think the Obama thing was bad? I think I saw 4 or 5 different Maduro birth certificates in the English language Honduran paper we used to get. He runs anyway, gets elected, is allowed to serve in spite of the constitution. Term limit rolls around, Maduro's out.
Enter Zelaya, who, except for being from the other party, has pretty much the same popularity as Maduro. While there's some emphasis on crime in his policies, he's definitely more focused on economic and social equality and decentralizing the government, giving more autonomy to the different regions and cities. This makes him a big ol' dirty hippy with dangerous friends. The whole folderol with this non-binding referendum about term limits was to put pressure on the upper caste to change the term limit. While they could accept some constitutional chicanery from well-heeled conservative Maduro, Zelaya's seen as taking the first step towards Chavez-style dictatorship. The global economic crisis hit Honduras pretty hard - this time last year, dad was getting reports of food shortages and being unable to afford staples from people who have enough money and education to call, e-mail, or write him. Poor, but not the poorest by any stretch. The majority of Hondurans are really unhappy and aren't really sure why because of that same difficulty with getting quality information out in a way people can understand. If I owned a mango plantation or three, I'd have been sweating bullets and liquidating assets for the past 18 months.
What Zelaya was trying to do was clearly unconstitutional but, more importantly, it makes the upper caste in both parties nervous. The Honduran Supreme Court is never going to back him because lawyers are the first people who get tarred, feathered, and put out of business in a dictatorship. The military is almost exclusively controlled by the upper class. I don't think they want to take over at all. I think they love getting a fat paycheck and fatter bribes for not doing a whole lot of work. Zelaya's popularity has shot up with the same people who got him elected but have been less and less satisfied into his term - unions, working and non-working poor. Zelaya's going to see how much support he can garner and try to get reinstated as president with international pressure.
International pressure of course means international aid. Honduras is a consumer country, nobody is going to embargo in this economy, but they'd love to stop cutting them a check. The real question is how far the Honduran establishment is willing to take things. I don't think they'll risk being cut off from aid, especially when they know the same people threatening to do that unless they reinstate the president are even less inclined to see him be president for life. All sectors of Honduran society, from the top to the bottom, depend on that money.
Swine flu resources
From the comments:
There was actually quite a bit of information towards the end of the week that the final update would put the count above 25,000. I had been tracking the counts on the websites of individual states' health departments. From what information was available, it looked like those were rising at an increasing rate. The only way the final number would be less than 25,000 would be if the CDC screwed up the collection of state data as it had the previous week.
I'll share my collection of bookmarks. These states have been the ones with rapidly growing case counts. Most of them don't update daily. If anyone's interested, I also have a spreadsheet with state-wise records from the past month -- I used this to see how the state numbers compared to the numbers on the CDC website.
AL
AZ
CA
CT
HI
ID
IL
IN
KS
KY
ME
MA
MI
MN
MS
NE
NH
NJ
NM
NY
NC
OH
OR
PA
RI
TN
TX
UT
VT
VA
WV
WY
Milwaukee (proxy for WI)
After last week's report, there was nothing that showed that the 25,000 number should be anything more than a coinflip. But it traded from 75 to 80 for most of the week. The reason I pegged it at a coinflip, (there is no way to say if it was or wasn't a coinflip), is because the weekly delta was dropping off, and if the weekly delta stayed about the same from one week to the next, it would be a very very close race.
There was actually quite a bit of information towards the end of the week that the final update would put the count above 25,000. I had been tracking the counts on the websites of individual states' health departments. From what information was available, it looked like those were rising at an increasing rate. The only way the final number would be less than 25,000 would be if the CDC screwed up the collection of state data as it had the previous week.
I'll share my collection of bookmarks. These states have been the ones with rapidly growing case counts. Most of them don't update daily. If anyone's interested, I also have a spreadsheet with state-wise records from the past month -- I used this to see how the state numbers compared to the numbers on the CDC website.
AL
AZ
CA
CT
HI
ID
IL
IN
KS
KY
ME
MA
MI
MN
MS
NE
NH
NJ
NM
NY
NC
OH
OR
PA
RI
TN
TX
UT
VT
VA
WV
WY
Milwaukee (proxy for WI)
I was robbed
This is my biggest loss to date. About a month ago, I bet around $6000 that the total number of confirmed cases would be less than 25,000 by the end of June. Since the CDC website now has it above 27,000, it looks like I lose.
I'm not really sure what went wrong. For the first 6 weeks of the crisis, the case count rose at a basically linear rate of about 350 cases per day. It was clear at the time that these confirmed cases were just the tip of the iceberg, that there were many many more actual cases than lab-confirmed. So the bet was basically about how much testing the health authorities would do.
At the time I made my bets, the initial panic about the disease had worn off. It was clear that H1N1 was mild, and also that efforts to contain it had failed. All the signs were there that testing should drop off. If an average person came to the doctor with flu symptoms, the treatment was the same whether it was seasonal flu or swine flu. Extensive testing served no particular public health purpose.
Epidemiologically, there was reason to expect the spread of the flu would slow down. Seasonal flu basically disappears from the country after May 31st -- that's why it's called seasonal flu. There was no reason to expect H1N1 to behave any differently.
At the state level, things also looked encouraging. Individual states' health departments declared that they were curtailing testing. Case count growth slowed down in California, Arizona, and New Mexico.
What I didn't expect was that other states would take up testing. In June, cases in Minnesota went from 47 to 537. Hawaii cases went from 44 to 465. Pennsylvania went from 95 to 1483. Maybe this represents a misunderstanding on my part of how public health authorities operate, but I see very little value in, say, Wisconsin serotyping 4273 flu cases.
As a side note, the CDC has been sloppy in the way it updates its case count. Here are the numbers for Wisconsin over the past 3 updates:
June 5th: 2217
June 12th: 3008
June 19th: 3008
June 25th: 4273
I'm a little bitter.
Intrade has posted new contracts for case counts at the end of July. I plan to avoid these, because the number measured is so artificial. We already knew we were trading on lab-confirmed cases rather than the actual spread of the disease. Now the bets are more about whether states will communicate their case counts to the CDC in time for its web page update, or whether the CDC will stop counting altogether.
I'm not really sure what went wrong. For the first 6 weeks of the crisis, the case count rose at a basically linear rate of about 350 cases per day. It was clear at the time that these confirmed cases were just the tip of the iceberg, that there were many many more actual cases than lab-confirmed. So the bet was basically about how much testing the health authorities would do.
At the time I made my bets, the initial panic about the disease had worn off. It was clear that H1N1 was mild, and also that efforts to contain it had failed. All the signs were there that testing should drop off. If an average person came to the doctor with flu symptoms, the treatment was the same whether it was seasonal flu or swine flu. Extensive testing served no particular public health purpose.
Epidemiologically, there was reason to expect the spread of the flu would slow down. Seasonal flu basically disappears from the country after May 31st -- that's why it's called seasonal flu. There was no reason to expect H1N1 to behave any differently.
At the state level, things also looked encouraging. Individual states' health departments declared that they were curtailing testing. Case count growth slowed down in California, Arizona, and New Mexico.
What I didn't expect was that other states would take up testing. In June, cases in Minnesota went from 47 to 537. Hawaii cases went from 44 to 465. Pennsylvania went from 95 to 1483. Maybe this represents a misunderstanding on my part of how public health authorities operate, but I see very little value in, say, Wisconsin serotyping 4273 flu cases.
As a side note, the CDC has been sloppy in the way it updates its case count. Here are the numbers for Wisconsin over the past 3 updates:
June 5th: 2217
June 12th: 3008
June 19th: 3008
June 25th: 4273
I'm a little bitter.
Intrade has posted new contracts for case counts at the end of July. I plan to avoid these, because the number measured is so artificial. We already knew we were trading on lab-confirmed cases rather than the actual spread of the disease. Now the bets are more about whether states will communicate their case counts to the CDC in time for its web page update, or whether the CDC will stop counting altogether.
That's not a compromise
Ayatollah Ahmad Khatami gave Friday prayers today (This is not the reformist ex-President Khatami, but a hardline conservative cleric.)
Most of the important stuff is going on behind closed doors now.
“I want the judiciary to punish leading rioters firmly and without showing any mercy to teach everyone a lesson.”
Reuters quoted him as saying that demonstrators should be tried for waging war against God. The punishment for such offenses under Islamic law is death, Reuters said.
Most of the important stuff is going on behind closed doors now.
Iran: Compromise Coming?
Reza Aslan cites "multiple sources" reporting that a runoff election might be in the works. This seems to be the least bad of an array of terrible options.
From the point of view of the protesters, this is going badly. Many of them have been beaten or killed in the streets. Others have been arrested and tortured in police stations. Mousavi is apparently under house arrest. Given the Basij's effective riot control, they have been unable to mount the massive rallies of last week. There is no clear path for them to succeed.
From the authorities' point of view, this situation is also terrible. The mass rallies may have stopped, but riots continue throughout the country, and people shout Allah-u-Akbar and Marg bar Diktator to show their displeasure at night. The economy is slowed, and there is the chance of a general strike. Khamenei has lost his legitimacy as an apolitical independent arbiter of Islamic law. Iran has been tremendously weakened internationally. Tehran is under martial law, and will need to remain so for the indefinite future. Iran risks becoming a North Korea-lite police state.
Neither side is likely to score a knockout blow. After much consideration, I doubt that the Assembly of Experts will act to remove Khamenei (this picture is worth a thousand words). Some sort of compromise must be in the offing. The key will be Khamenei's words at Friday Prayer tomorrow.
From the point of view of the protesters, this is going badly. Many of them have been beaten or killed in the streets. Others have been arrested and tortured in police stations. Mousavi is apparently under house arrest. Given the Basij's effective riot control, they have been unable to mount the massive rallies of last week. There is no clear path for them to succeed.
From the authorities' point of view, this situation is also terrible. The mass rallies may have stopped, but riots continue throughout the country, and people shout Allah-u-Akbar and Marg bar Diktator to show their displeasure at night. The economy is slowed, and there is the chance of a general strike. Khamenei has lost his legitimacy as an apolitical independent arbiter of Islamic law. Iran has been tremendously weakened internationally. Tehran is under martial law, and will need to remain so for the indefinite future. Iran risks becoming a North Korea-lite police state.
Neither side is likely to score a knockout blow. After much consideration, I doubt that the Assembly of Experts will act to remove Khamenei (this picture is worth a thousand words). Some sort of compromise must be in the offing. The key will be Khamenei's words at Friday Prayer tomorrow.
Opening the echo chamber
Contrarian day on Iran today. A couple of fascinating interviews with people on the side of Ahmadinejad and Khamenei.
Why are the Basij so dedicated? According to this interview they're being paid $200 a day. [Update: I just found a link to the entire interview. I doubt it is real.] Iran's per capita GDP is $3117, and the average income for rural villagers is much less. They've made more over the past 10 days than they make in a year. It's hard to expect much desertion with that kind of money. If the security forces stop enforcing, it will be because of decisions at the highest levels, not defection by the rank and file.
This isn't going to bankrupt the regime. Let's do some back of the envelope calculations. Each Basiji is paid $200 per day. There are roughly 25,000 - 50,000 militia members putting down riots right now. Overhead costs for supplies, housing, administration are about 100% as much as salaries. That would mean the government is spending $10-$20 million per day on riot control. In the context of a $60 billion annual government budget, that's sustainable for quite some time.
This interview with a conservative cleric is an even more interesting read. This guy is a Hojjat-ul-Islam, roughly the equivalent of a bishop or archbishop in the Catholic church.
The interviewer is very well informed. He has clearly been reading Western media reports closely, and is asking good questions. The cleric has a very cohesive, internally consistent set of answers to these questions. They're just delusional.
I really think he believes what he's saying. He's within an echo chamber. He probably talks only to people who have very similar world views. He's never really had reason to doubt what's shown on state TV. Is he representative of the clerical establishment?
Western commentators, too, are in an echo chamber. We all generally detest the Iranian regime, and we're all sympathetic to popular revolutions. People watching and the crisis and writing about it in English will have a tendency to believe rumors they like and discount what they don't like. With that in mind, I present this article from Stratfor, which argues that Ahmadinejad was probably the true winner of the election, and that the revolution has already failed.
I always want to read well-written opposing viewpoints, but I think they get some of their facts wrong. In particular, they claim that "while large, the demonstrations primarily consisted of the same type of people demonstrating... they failed to note just how many of the demonstrators spoke English and had smartphones" Several commentators have noted the opposite, that a wide range of demographics participated. Many of the protests took place in working-class South Tehran, as opposed to the more upscale northern part of the city. I've been concerned about this issue as well, and have seen in videos of the protests (especially the larger non-violent ones early on) plenty of conservatively dressed older men and women mixed in with younger people.
________________________
This afternoon I think it is more likely that some kind of compromise will be worked out. I doubt either side in the Khamenei/Rafsanjani feud will score a knock-out blow, at least in the next couple months. However, the form of this compromise remains to be seen. Some have floated a run-off election between Ahmadinejad and Mousavi. Others suggested a power-sharing agreement. I can't make a call without knowing more about what's happening in Qom.
Why are the Basij so dedicated? According to this interview they're being paid $200 a day. [Update: I just found a link to the entire interview. I doubt it is real.] Iran's per capita GDP is $3117, and the average income for rural villagers is much less. They've made more over the past 10 days than they make in a year. It's hard to expect much desertion with that kind of money. If the security forces stop enforcing, it will be because of decisions at the highest levels, not defection by the rank and file.
This isn't going to bankrupt the regime. Let's do some back of the envelope calculations. Each Basiji is paid $200 per day. There are roughly 25,000 - 50,000 militia members putting down riots right now. Overhead costs for supplies, housing, administration are about 100% as much as salaries. That would mean the government is spending $10-$20 million per day on riot control. In the context of a $60 billion annual government budget, that's sustainable for quite some time.
This interview with a conservative cleric is an even more interesting read. This guy is a Hojjat-ul-Islam, roughly the equivalent of a bishop or archbishop in the Catholic church.
The interviewer is very well informed. He has clearly been reading Western media reports closely, and is asking good questions. The cleric has a very cohesive, internally consistent set of answers to these questions. They're just delusional.
Now Tehran has millions of people, and bringing out a few thousand to protest is not such a big feat. When some of these people were going back recently, they were arrested by the Iranian intelligence and questioned. They said that they were neither with Ahmadinejad, nor with Mousavi. In fact, they said they hadn't even voted at all. They said that they had specifically received orders from a lady in England named Zohra, which I think is a fake name, who had given them orders to do all of this breaking and damaging and violence. They recorded her phone calls, and showed it on TV here. I saw it myself. She would call them and give them orders to go out and destroy things, set fire to gas stations, and so on.
I really think he believes what he's saying. He's within an echo chamber. He probably talks only to people who have very similar world views. He's never really had reason to doubt what's shown on state TV. Is he representative of the clerical establishment?
Western commentators, too, are in an echo chamber. We all generally detest the Iranian regime, and we're all sympathetic to popular revolutions. People watching and the crisis and writing about it in English will have a tendency to believe rumors they like and discount what they don't like. With that in mind, I present this article from Stratfor, which argues that Ahmadinejad was probably the true winner of the election, and that the revolution has already failed.
I always want to read well-written opposing viewpoints, but I think they get some of their facts wrong. In particular, they claim that "while large, the demonstrations primarily consisted of the same type of people demonstrating... they failed to note just how many of the demonstrators spoke English and had smartphones" Several commentators have noted the opposite, that a wide range of demographics participated. Many of the protests took place in working-class South Tehran, as opposed to the more upscale northern part of the city. I've been concerned about this issue as well, and have seen in videos of the protests (especially the larger non-violent ones early on) plenty of conservatively dressed older men and women mixed in with younger people.
________________________
This afternoon I think it is more likely that some kind of compromise will be worked out. I doubt either side in the Khamenei/Rafsanjani feud will score a knock-out blow, at least in the next couple months. However, the form of this compromise remains to be seen. Some have floated a run-off election between Ahmadinejad and Mousavi. Others suggested a power-sharing agreement. I can't make a call without knowing more about what's happening in Qom.
What is Rafsanjani doing?
Akbar Hashemi Rafsanjani is a former President of Iran, and, after Supreme Leader Khamenei, is perhaps the second-most powerful person in the country. Following Khomeini's death in 1989, Rafsanjani played an important role in the elevation of Khamenei to Supreme Leader, but the two have since developed an intense feud. Rafsanjani is now the head of the Assembly of Experts, the clerical body which oversees and has the power to remove the Supreme Leader.
Rafsanjani is not personally popular in Iran. Perhaps the closest analogue in American politics would be Richard Nixon, if Nixon had continued to be active behind the scenes after he left office. Rafsanjani is seen as selfish in his goals and Machiavellian in his methods. Nevertheless, he hold power both through elected office and through connections with business interests and other politicians.
Many see the struggle between Mousavi and Ahmadinejad as a proxy fight between Rafsanjani and Khamenei. Since the protests began, Rafsanjani has kept a very low profile. He hasn't made any public appearances or statements. Most rumors have him traveling to Qom, where the Assembly members live, to coordinate behind the scenes. Various news stories, all relying on anonymous sources, have suggested that he has 40 of the 43 votes necessary to remove Khamenei.
Other rumors suggest that Rafsanjani has the support of the uniformed army, though I don't see why that should be true.
Andrew Sullivan strings together several tweets from a reliable source:
I hope he's right, but this strikes me as too optimistic. Rafsanjani will play his hand to benefit himself. If he sees that the reformers will win, he'll provide the final push to the regime. If not, he'll make nice with Khamenei and give political cover to the continuing repression.
Khamenei knows that his biggest threat inside the government is Rafsanjani. He mentioned Rafsanjani by name during Friday prayers. Since then several members of Rafsanjani's family have been arrested and subsequently released. There's just not enough information to read between the lines here. All I can say is, whichever side Rafsanjani chooses will be the winner.
_______________
Updated probabilites:
New elections, Khamenei stays in power. The IRGC has strongly indicated that they will not annul the election, though they have extended the deadline for a few days. It's not clear why. I suppose it's possible Khamenei might see his own position threatened and call new elections as a last resort. 3%
Khamenei thrown out by the Assembly of Experts. One view is that Khamenei and Ahmadinejad are caught in a vice -- if they don't crack down, massive protests will undermine their legitimacy. If they do, the resulting violence will turn moderate clerics against them. Today's strikes seem to have had mixed success. I think the new strategy of gathering in the bazaars is tactically brilliant. 25%
Power-sharing deal. Mousavi's spokesman categorically ruled this out today, but things can change quickly. 5%
Repression. One of the keys to a successful revolution is for the security apparatus to break down and join the protesters. There have been unconfirmed rumors that a general in the Revolutionary Guard was arrested for refusing to move against protesters, but for the most part the Basijis are happy to keep beating people up. Unless that changes, the current situation can be maintained for quite some time. 69%
Revolution. The Assembly doesn't act, but protests and strikes eventually wear down the regime. Unlikely because I think the government will bend before it breaks. 3%
Civil war is unlikely. Ethnic divisions are not nearly as important as they are in other countries. Turns out Khamenei himself is an Azeri.
Rafsanjani is not personally popular in Iran. Perhaps the closest analogue in American politics would be Richard Nixon, if Nixon had continued to be active behind the scenes after he left office. Rafsanjani is seen as selfish in his goals and Machiavellian in his methods. Nevertheless, he hold power both through elected office and through connections with business interests and other politicians.
Many see the struggle between Mousavi and Ahmadinejad as a proxy fight between Rafsanjani and Khamenei. Since the protests began, Rafsanjani has kept a very low profile. He hasn't made any public appearances or statements. Most rumors have him traveling to Qom, where the Assembly members live, to coordinate behind the scenes. Various news stories, all relying on anonymous sources, have suggested that he has 40 of the 43 votes necessary to remove Khamenei.
Other rumors suggest that Rafsanjani has the support of the uniformed army, though I don't see why that should be true.
Andrew Sullivan strings together several tweets from a reliable source:
Rafsanjani is waiting 4 Gov to show world extent of their suppression of ppls. Rafsanjani is also waiting for wave of support to grow both in & out of country. Rafsanjani is slowly eroding support for Khamenei from behind scene. Rafsanjani is standing back to see who is who - who support who - to see who is trusted. Rafsanjani is allowing Revolutionary Guard commanders to choose their side - with ppl or against - trusted or not. When all positions clear - Rafsanjani has the military, financial & clerical power to mobilise. The process is slow - but certain - when Rafsanjani speaks - he will be heard.
I hope he's right, but this strikes me as too optimistic. Rafsanjani will play his hand to benefit himself. If he sees that the reformers will win, he'll provide the final push to the regime. If not, he'll make nice with Khamenei and give political cover to the continuing repression.
Khamenei knows that his biggest threat inside the government is Rafsanjani. He mentioned Rafsanjani by name during Friday prayers. Since then several members of Rafsanjani's family have been arrested and subsequently released. There's just not enough information to read between the lines here. All I can say is, whichever side Rafsanjani chooses will be the winner.
_______________
Updated probabilites:
New elections, Khamenei stays in power. The IRGC has strongly indicated that they will not annul the election, though they have extended the deadline for a few days. It's not clear why. I suppose it's possible Khamenei might see his own position threatened and call new elections as a last resort. 3%
Khamenei thrown out by the Assembly of Experts. One view is that Khamenei and Ahmadinejad are caught in a vice -- if they don't crack down, massive protests will undermine their legitimacy. If they do, the resulting violence will turn moderate clerics against them. Today's strikes seem to have had mixed success. I think the new strategy of gathering in the bazaars is tactically brilliant. 25%
Power-sharing deal. Mousavi's spokesman categorically ruled this out today, but things can change quickly. 5%
Repression. One of the keys to a successful revolution is for the security apparatus to break down and join the protesters. There have been unconfirmed rumors that a general in the Revolutionary Guard was arrested for refusing to move against protesters, but for the most part the Basijis are happy to keep beating people up. Unless that changes, the current situation can be maintained for quite some time. 69%
Revolution. The Assembly doesn't act, but protests and strikes eventually wear down the regime. Unlikely because I think the government will bend before it breaks. 3%
Civil war is unlikely. Ethnic divisions are not nearly as important as they are in other countries. Turns out Khamenei himself is an Azeri.
Oh please please please be true
Taking a break from Iran for the moment.
MSNBC's First Read:
MSNBC's First Read:
Check out this set of facts. Fact 1: Gov. Mark Sanford went missing Thursday and hasn't been seen since. Fact 2: His staff has since told us that the governor has been hiking the Appalachian Trail. Fact 3: Sunday was "Naked Hiking Day" on the Appalachian Trail. We kid you not.
Iran -- Future Scenarios
Update 4:11 PM ET: New info from the Guardian Council indicates they will not likely overturn the election. Estimates changed to reflect this.
________
For the past week or so, I've been reporting what I think are the important bits of news to come out of Iran. It occurred to me last night that one way I can add value is by explicitly estimating the probability of various outcomes. This is a skill that most people are not inherently good at. I think people who aren't gamblers or statisticians tend to estimate probabilities as "very unlikely," "unlikely," "50-50," "likely," and "very likely." These correspond roughly with expected likelihoods of 0-5%, 5-40%, 40-60%, 60-95%, and 95-100%. For most people, a 15% chance and a 25% chance "feels" about the same. (As a topic for another post, I think the use of this estimation technique is a big reason why prediction markets often price probabilities inaccurately.)
I will admit, Iran is not a particularly good place to start. It's very difficult to tell exactly what's going on, either in the streets or behind the scenes. This cloudiness means my estimates can't be much more precise than the intuitive "5 categories" technique I just criticized. Still, here are my estimates of what might happen next.
-New elections, Khamenei stays in power. Pressure from outside protesters and moderate insiders lead the IRGC (the final authority on the elections) to declare them flawed and order a re-do.17% 3%
-Khamenei leaves. Rafsanjani organizes the Assembly of Experts to remove Khamenei as Supreme Leader. New elections follow.7% 14%
-Compromise. Mousavi and Karoubi join Ahmadinejad in some kind of power-sharing arrangement. Bad blood and statements from both sides make this unlikely, but it is the solution which would end the crisis with both sides saving some face.6% 8%
-Repression now, revolution later. Mousavi and Karoubi are arrested. A new spasm of protests and strikes is put down, and life eventually returns to almost normal. When Khamenei dies, or there is some other spark, demonstrations flare up again.68% 72%
-Revolution now. The ruling clerics are too inflexible, and cannot co-opt or put down the popular uprising. No constitutional solution can be found, and the regime breaks apart.2% 3%
-Civil war. Iran is only 51% Persian -- the rest of the country are ethnic minorities, mainly Azeris and Kurds. I've seen almost no news out of the Azeri part of the country, but, since Mousavi is Azeri, I'm sure protests and police retribution are even more severe there than in Tehran. Ethnic infighting breaks out, similar to Iraq in the past 6 years. Neighboring Azerbaijan provides assistance to its ethnic brother. This is less likely because the nation of Iraq was a construction of the British after WWI, while Iran has been a unified political entity for thousands of years. <1%
To repeat my earlier caveat, things are very cloudy, and I could make an argument to change any of these numbers by 10%.
________
For the past week or so, I've been reporting what I think are the important bits of news to come out of Iran. It occurred to me last night that one way I can add value is by explicitly estimating the probability of various outcomes. This is a skill that most people are not inherently good at. I think people who aren't gamblers or statisticians tend to estimate probabilities as "very unlikely," "unlikely," "50-50," "likely," and "very likely." These correspond roughly with expected likelihoods of 0-5%, 5-40%, 40-60%, 60-95%, and 95-100%. For most people, a 15% chance and a 25% chance "feels" about the same. (As a topic for another post, I think the use of this estimation technique is a big reason why prediction markets often price probabilities inaccurately.)
I will admit, Iran is not a particularly good place to start. It's very difficult to tell exactly what's going on, either in the streets or behind the scenes. This cloudiness means my estimates can't be much more precise than the intuitive "5 categories" technique I just criticized. Still, here are my estimates of what might happen next.
-New elections, Khamenei stays in power. Pressure from outside protesters and moderate insiders lead the IRGC (the final authority on the elections) to declare them flawed and order a re-do.
-Khamenei leaves. Rafsanjani organizes the Assembly of Experts to remove Khamenei as Supreme Leader. New elections follow.
-Compromise. Mousavi and Karoubi join Ahmadinejad in some kind of power-sharing arrangement. Bad blood and statements from both sides make this unlikely, but it is the solution which would end the crisis with both sides saving some face.
-Repression now, revolution later. Mousavi and Karoubi are arrested. A new spasm of protests and strikes is put down, and life eventually returns to almost normal. When Khamenei dies, or there is some other spark, demonstrations flare up again.
-Revolution now. The ruling clerics are too inflexible, and cannot co-opt or put down the popular uprising. No constitutional solution can be found, and the regime breaks apart.
-Civil war. Iran is only 51% Persian -- the rest of the country are ethnic minorities, mainly Azeris and Kurds. I've seen almost no news out of the Azeri part of the country, but, since Mousavi is Azeri, I'm sure protests and police retribution are even more severe there than in Tehran. Ethnic infighting breaks out, similar to Iraq in the past 6 years. Neighboring Azerbaijan provides assistance to its ethnic brother. This is less likely because the nation of Iraq was a construction of the British after WWI, while Iran has been a unified political entity for thousands of years. <1%
To repeat my earlier caveat, things are very cloudy, and I could make an argument to change any of these numbers by 10%.
Iran Update
Sporadic protests continue in Iran today. The massive police presence on the streets of Tehran have quelled the mass protests at least temporarily. The police strategy is to disperse protesters before they can reach a critical mass where they can challege the police force. Consequently the biggest estimates I've heard for today's protests were around 10,000, with the actual number likely lower.
This has not happened because people suddenly like the government. It's because the government has been effective in blocking communications between protesters, and in breaking up large crowds before they can form. If the Basij relaxed their aggression, there would be a 500,000+ strong march tomorrow.
Because of the crackdown, Mousavi and Karoubi have decided to pause and regroup. It is not possible at present to instantly coordinate tens of thousands of protesters -- they need more lead time. Karoubi has called for another large protest on Thursday, location to-be-determined.
There are also rumors of a coming general strike. In 1979, strikes by petrochemical workers were an important factor in the fall of the Shah. Oil and gas were shut off, and Iran was forced to buy oil from the US. Today oil and gas are even more important, providing the regime with cash which it uses for patronage, bribes, and corruption. If that source of cash is cut off, it's only a matter of time before the government falls.
The head of the Guardian Council announced on state TV that in 50 cities, there were more votes than voters, which could have accounted for 3 million votes. Some think this statement might be an opening for re-running the elections. That's possible, but based on other remarks by the Council, I think it's a ham-handed attempt at damage control. They're saying the irregularities were not as widespread as the opposition claims, and did not change the outcome since Ahmadinejad won by 11 million votes.
This has not happened because people suddenly like the government. It's because the government has been effective in blocking communications between protesters, and in breaking up large crowds before they can form. If the Basij relaxed their aggression, there would be a 500,000+ strong march tomorrow.
Because of the crackdown, Mousavi and Karoubi have decided to pause and regroup. It is not possible at present to instantly coordinate tens of thousands of protesters -- they need more lead time. Karoubi has called for another large protest on Thursday, location to-be-determined.
There are also rumors of a coming general strike. In 1979, strikes by petrochemical workers were an important factor in the fall of the Shah. Oil and gas were shut off, and Iran was forced to buy oil from the US. Today oil and gas are even more important, providing the regime with cash which it uses for patronage, bribes, and corruption. If that source of cash is cut off, it's only a matter of time before the government falls.
The head of the Guardian Council announced on state TV that in 50 cities, there were more votes than voters, which could have accounted for 3 million votes. Some think this statement might be an opening for re-running the elections. That's possible, but based on other remarks by the Council, I think it's a ham-handed attempt at damage control. They're saying the irregularities were not as widespread as the opposition claims, and did not change the outcome since Ahmadinejad won by 11 million votes.
Conflicting Reports from Assembly of Experts
The Iranian Assembly of Experts is an elected body of 86 clerics charged with overseeing the Supreme Leader. The Iranian constitution gives them the power to remove the Supreme Leader, though this has never been seriously contemplated before. Given Khamenei's hard-line tack and unwavering support for Ahmadinejad, action by the Assembly appears to be the only way the reformists can win within the current constitutional framework.
Two pieces of news have come out about the Assembly. First, Iranian state media claim that the Assembly has endorsed the Supreme Leader. The Assembly's official website does not confirm this exactly. It does feature a letter by a top hardline cleric, Mohammad Yazdi. This letter, dated last Thursday, states his strong support for Khamenei. However, it is not signed by any other member of the Assembly.
In contrast, Al Arabiya is reporting that "religious leaders are considering an alternative to the supreme leader structure." Rather than a single Supreme Leader, a group of ayatollahs would perform the same role. This discussion seems to be led by Rafsanjani, the former President and head of the Assembly.
It's not clear whether either of these reports are true. However, I have seen multiple confirmations that Rafsanjani's daughter and 4 other relatives have been arrested. It seems the regime's plan is to hold them hostage to try to restrain Rafsanjani from moving against Khamenei. Meanwhile, Khamenei reached out to Rafsanjani during Friday prayers. Posters on Twitter claim that Rafsanjani has the loyalty of the army, but I don't give those rumors much credence.
What happens next? It's very hard to tell what's going on in the streets, but there appear to be scattered street protests. There are a few videos making the rounds showing groups of at least several thousand. It's impossible to tell if those are from today or earlier protests.
The next push by the Mousavi camp will be for nationwide strikes. Strikes would be disruptive to daily life, would express the level of popular opposition to the authorities, and are much more difficult than marches to crack down against. You can beat a protester with a baton, but what can you do when someone stays home from work? Grand Ayatollah Montazeri, the most prominent dissident cleric, has called for three days of mourning for those killed yesterday. This may take the form of general strikes Wednesday through Friday.
Two pieces of news have come out about the Assembly. First, Iranian state media claim that the Assembly has endorsed the Supreme Leader. The Assembly's official website does not confirm this exactly. It does feature a letter by a top hardline cleric, Mohammad Yazdi. This letter, dated last Thursday, states his strong support for Khamenei. However, it is not signed by any other member of the Assembly.
In contrast, Al Arabiya is reporting that "religious leaders are considering an alternative to the supreme leader structure." Rather than a single Supreme Leader, a group of ayatollahs would perform the same role. This discussion seems to be led by Rafsanjani, the former President and head of the Assembly.
It's not clear whether either of these reports are true. However, I have seen multiple confirmations that Rafsanjani's daughter and 4 other relatives have been arrested. It seems the regime's plan is to hold them hostage to try to restrain Rafsanjani from moving against Khamenei. Meanwhile, Khamenei reached out to Rafsanjani during Friday prayers. Posters on Twitter claim that Rafsanjani has the loyalty of the army, but I don't give those rumors much credence.
What happens next? It's very hard to tell what's going on in the streets, but there appear to be scattered street protests. There are a few videos making the rounds showing groups of at least several thousand. It's impossible to tell if those are from today or earlier protests.
The next push by the Mousavi camp will be for nationwide strikes. Strikes would be disruptive to daily life, would express the level of popular opposition to the authorities, and are much more difficult than marches to crack down against. You can beat a protester with a baton, but what can you do when someone stays home from work? Grand Ayatollah Montazeri, the most prominent dissident cleric, has called for three days of mourning for those killed yesterday. This may take the form of general strikes Wednesday through Friday.
Battles in the streets
Protestors defied Ayatollah Khamenei and went into the streets for a 7th straight day. The riot police and Basijis used unprecedented force to fight them. The authorities created a wide cordon around the intended starting point of the march, and appear to have prevented the people from joining in a single crowd. Most of the day has been taken up with running battles in the streets.
Iranian state media has reported a suicide bombing at the Ayatollah Khomeini shrine. It's unclear whether this is true, and if it is, whether it was bombed by the state, protesters, or other radical groups. Some say the damage was minimal, with just a broken window.
The police/Basij have been using water cannons, tear gas, and live bullets. Some reports have helicopters dropping water mixed with tear gas capsules on protesters. Video has come out of several protesters dying in the streets from bullet wounds. However, this is not yet Tiananmen Square -- the number dead is likely somewhere between 5 and 25, not in the hundreds or thousands.
This is not the end of the protests.
In political action, Mousavi has committed himself to the protesters. Previous Iranian protests died out when political leaders backed away from their supporters in the streets. That does not look to be the case here. Towards the end of the day, Mousavi made a speech, beginning with a quote from the Koran, "We come from God, and to God we return." He said he had performed the ritual cleansing in preparation for martyrdom.
Night has fallen in Iran, and the shouts of Allah-u-Akbar have begun again. They are louder tonight than ever before. On Friday night, Mousavi and Karoubi had called on their followers to protest Saturday afternoon. I haven't heard of any such plans for tomorrow, but there will no doubt be more chaos in the streets. As in the 1979 revolution, public funerals for the fallen will provide a pretext for another march.
Khamenei has fully committed himself. He has no room for compromise. This will resolve itself only with increasingly brutal repression, or with Khamenei resigning/ousted/killed.
I have extreme doubts about the success of any crackdown. There is perhaps no country on earth whose people are more psychologically prepared for revolution. The Islamic Republic of Iran was founded on a bloody revolt against the Shah. For 30 years, it has turned those revolutionaries into idols, and has indoctrinated its children in the holiness of righteous revolt. Islam itself encourages martyrdom. The same promise of heaven which drives some Muslims to suicide bombings is now driving Iranians to march against fascism. The government will need to kill thousands to put this down.
Iranian state media has reported a suicide bombing at the Ayatollah Khomeini shrine. It's unclear whether this is true, and if it is, whether it was bombed by the state, protesters, or other radical groups. Some say the damage was minimal, with just a broken window.
The police/Basij have been using water cannons, tear gas, and live bullets. Some reports have helicopters dropping water mixed with tear gas capsules on protesters. Video has come out of several protesters dying in the streets from bullet wounds. However, this is not yet Tiananmen Square -- the number dead is likely somewhere between 5 and 25, not in the hundreds or thousands.
This is not the end of the protests.
In political action, Mousavi has committed himself to the protesters. Previous Iranian protests died out when political leaders backed away from their supporters in the streets. That does not look to be the case here. Towards the end of the day, Mousavi made a speech, beginning with a quote from the Koran, "We come from God, and to God we return." He said he had performed the ritual cleansing in preparation for martyrdom.
Night has fallen in Iran, and the shouts of Allah-u-Akbar have begun again. They are louder tonight than ever before. On Friday night, Mousavi and Karoubi had called on their followers to protest Saturday afternoon. I haven't heard of any such plans for tomorrow, but there will no doubt be more chaos in the streets. As in the 1979 revolution, public funerals for the fallen will provide a pretext for another march.
Khamenei has fully committed himself. He has no room for compromise. This will resolve itself only with increasingly brutal repression, or with Khamenei resigning/ousted/killed.
I have extreme doubts about the success of any crackdown. There is perhaps no country on earth whose people are more psychologically prepared for revolution. The Islamic Republic of Iran was founded on a bloody revolt against the Shah. For 30 years, it has turned those revolutionaries into idols, and has indoctrinated its children in the holiness of righteous revolt. Islam itself encourages martyrdom. The same promise of heaven which drives some Muslims to suicide bombings is now driving Iranians to march against fascism. The government will need to kill thousands to put this down.
Tomorrow's the Big Day
Khamenei's speech, via Twitter: "Ajad won, u are all going to take it, if u don't my goons will murder u."
I'm totally unsurprised that Khamenei offered no compromise in his speech. However, I think (hope) that the crack down will come too late. If there had been a massive police presence in the first day or two after the election, it would have had a better chance. Now the people have marched successfully many times, and driven off smaller Basij efforts. They know if they stay together they will be safe. And what happens when Khamenei tries his hardest to stop the protests, and they still go on?
As a prelude to tomorrow's protests, people are again chanting Allah-u-Akbar from their balconies.
I'm totally unsurprised that Khamenei offered no compromise in his speech. However, I think (hope) that the crack down will come too late. If there had been a massive police presence in the first day or two after the election, it would have had a better chance. Now the people have marched successfully many times, and driven off smaller Basij efforts. They know if they stay together they will be safe. And what happens when Khamenei tries his hardest to stop the protests, and they still go on?
As a prelude to tomorrow's protests, people are again chanting Allah-u-Akbar from their balconies.
Big Sale
I just sold more than 1500 Ahmadinejad contracts between 84.7-85. This is risking about $2300 to win about $13,000. I think fair value on these contracts is much lower, around 60.
Counting my pre-election betting against Mousavi, here's what I'm looking at. If Ahmadinejad prevails, I lose $2100. If Mousavi wins, I win $27,100. If neither Mousavi nor Ahmadinejad is the next president, I win $31,600. I like those odds.
Counting my pre-election betting against Mousavi, here's what I'm looking at. If Ahmadinejad prevails, I lose $2100. If Mousavi wins, I win $27,100. If neither Mousavi nor Ahmadinejad is the next president, I win $31,600. I like those odds.
Iran: What happens next?
News for this morning:
-Today's march is estimated at one million people, the biggest so far. All of these crowd counts must be taken with a healthy dose of skepticism.
-One unverified report that the Ahmadinejad-aligned Basiji militiamen have begun to cover their faces. If true, it would support a turning of the tide of popular opinion -- those who have been retaliating against protesters are now themselves afraid of retaliation.
-Khamenei will give Friday prayers tomorrow. Some reports say this will take place at Tehran University, which was the site of severe crackdowns (raids on the dormitories, resulting in arrests and several students' deaths). There will be massive crowds including both Mousavi and Ahmadinejad supporters. What will he say, and how will the crowd react?
I'm writing a longer post about the differences between successful and unsuccessful revolutions. One thing that's come out of my research has been that in the Rose Revolution in Georgia, the Orange Revolution in Ukraine, and the Cedar Revolution in Lebanon, the ruling powers made major concessions after 7-10 days of protests. I don't expect Khamenei to back down on Friday -- he'll probably stick to his plan of "recounting" the vote. By Monday, when that hasn't calmed the crowds, he may decide to throw Ahmadinejad to the wolves.
-Today's march is estimated at one million people, the biggest so far. All of these crowd counts must be taken with a healthy dose of skepticism.
-One unverified report that the Ahmadinejad-aligned Basiji militiamen have begun to cover their faces. If true, it would support a turning of the tide of popular opinion -- those who have been retaliating against protesters are now themselves afraid of retaliation.
-Khamenei will give Friday prayers tomorrow. Some reports say this will take place at Tehran University, which was the site of severe crackdowns (raids on the dormitories, resulting in arrests and several students' deaths). There will be massive crowds including both Mousavi and Ahmadinejad supporters. What will he say, and how will the crowd react?
I'm writing a longer post about the differences between successful and unsuccessful revolutions. One thing that's come out of my research has been that in the Rose Revolution in Georgia, the Orange Revolution in Ukraine, and the Cedar Revolution in Lebanon, the ruling powers made major concessions after 7-10 days of protests. I don't expect Khamenei to back down on Friday -- he'll probably stick to his plan of "recounting" the vote. By Monday, when that hasn't calmed the crowds, he may decide to throw Ahmadinejad to the wolves.
New Developments in Iran
These protests are not going away. A BBC correspondent is reporting more than 500,000 Iranians are silently marching in Tehran (3:30pm in this liveblog)
The Iranian national soccer team, playing in South Korea in a World Cup qualifier, wore green wristbands in support of the protests.
In any coup or revolution, the support of the uniformed military is usually decisive. That's why it's encouraging that the regular Iranian army has thus far stayed out. This report says a group of 500 Iranian uniformed special forces worked to protect Mousavi protesters from beatings by Ahmadinejad supporters. Also, "quite a lot of policement are beginning to smile towards the demonstrators of Mr Mousavi." The report claims 1 million people marched on Sunday.
I said yesterday that eyes should be on the Assembly of Experts. This group, headed by Mousavi ally Rafsanjani, has the power to remove Khamenei as Supreme Leader. Reza Aslan reported on CNN that Rafsanjani has called an emergency meeting of the Assembly. Who knows whether this is an attempt to remove Khamenei or just pressure him, but if Khamenei falls, Ahmadinejad will as well.
This is absolutely the best piece I've read about why the coup happened.
The Iranian national soccer team, playing in South Korea in a World Cup qualifier, wore green wristbands in support of the protests.
In any coup or revolution, the support of the uniformed military is usually decisive. That's why it's encouraging that the regular Iranian army has thus far stayed out. This report says a group of 500 Iranian uniformed special forces worked to protect Mousavi protesters from beatings by Ahmadinejad supporters. Also, "quite a lot of policement are beginning to smile towards the demonstrators of Mr Mousavi." The report claims 1 million people marched on Sunday.
I said yesterday that eyes should be on the Assembly of Experts. This group, headed by Mousavi ally Rafsanjani, has the power to remove Khamenei as Supreme Leader. Reza Aslan reported on CNN that Rafsanjani has called an emergency meeting of the Assembly. Who knows whether this is an attempt to remove Khamenei or just pressure him, but if Khamenei falls, Ahmadinejad will as well.
This is absolutely the best piece I've read about why the coup happened.
Iran gets cloudier
It’s getting even harder to find out what’s really happening there. Foreign reporters have been restricted to their offices and hotel rooms. The news that was coming in from Twitter is now mixed with disinformation from the Iranian government.
Most of the people talking about it in English don’t really understand the political structures of Iran. You can find a particularly uninformative discussion here. Anyone who refers to Mousavi as a “reformist” is poorly informed. Essentially the election/coup is a battle between the Old Guard of the revolution (Mousavi, Rafsanjani, etc.) and a new movement that wants to establish a military dictatorship. But this guy really knows what he's talking about.
Eyes should be on the Assembly of Experts, which is a body of ayatollahs empowered to remove Khamenei as Supreme Leader. Rafsanjani is the head, and the majority of the body is allied with him. The real question is whether he can round up enough support to remove or at least pressure Khamenei.
At this point, though, it’s not clear what solution could occur. A recount is ridiculous. A new election or a Mousavi/Ahmadinejad runoff is possible, but who would trust the results? I don’t see how any leader can achieve legitimacy now. One solution I’ve heard floated is to have Ahmadinejad remain president, but to give Mousavi and other Old Guard important cabinet positions. If Mousavi et al would accept that, that would be the most stable solution.
Other news:
-The rally today was even bigger than the rally yesterday. Unless it wasn't.
-Ahmadinejad has left Iran for a meeting in Russia. This trip had been planned some time in advance. He delayed his departure for one day. It's an odd time to leave. Generally when one's grip on the levers of power is in question, one doesn't leave the country. For Ahmadinejad to leave now is an extraordinary show of confidence. Or else he doesn't want to be associated with the crackdown.
Most of the people talking about it in English don’t really understand the political structures of Iran. You can find a particularly uninformative discussion here. Anyone who refers to Mousavi as a “reformist” is poorly informed. Essentially the election/coup is a battle between the Old Guard of the revolution (Mousavi, Rafsanjani, etc.) and a new movement that wants to establish a military dictatorship. But this guy really knows what he's talking about.
Eyes should be on the Assembly of Experts, which is a body of ayatollahs empowered to remove Khamenei as Supreme Leader. Rafsanjani is the head, and the majority of the body is allied with him. The real question is whether he can round up enough support to remove or at least pressure Khamenei.
At this point, though, it’s not clear what solution could occur. A recount is ridiculous. A new election or a Mousavi/Ahmadinejad runoff is possible, but who would trust the results? I don’t see how any leader can achieve legitimacy now. One solution I’ve heard floated is to have Ahmadinejad remain president, but to give Mousavi and other Old Guard important cabinet positions. If Mousavi et al would accept that, that would be the most stable solution.
Other news:
-The rally today was even bigger than the rally yesterday. Unless it wasn't.
-Ahmadinejad has left Iran for a meeting in Russia. This trip had been planned some time in advance. He delayed his departure for one day. It's an odd time to leave. Generally when one's grip on the levers of power is in question, one doesn't leave the country. For Ahmadinejad to leave now is an extraordinary show of confidence. Or else he doesn't want to be associated with the crackdown.
Tide Turning in Iran
Josh Marshall beat me to the punch.
I've been wondering why Khamenei went along with this coup. Now it seems he's having doubts as well. Monday's events seem to signal a sea change in the way the regime deals with the protests. Along with Khamenei's about-face, Press TV, the Iranian-government-funded English-language broadcast, has begun to feature sympathetic coverage of the demonstrators.
I'm very glad I hedged my positions. This remains a situation which outsiders cannot grasp clearly, and which can change radically very quickly. I just sold 1000 contracts of Ahmadinejad at 86.4.
For much of the weekend it seemed that the Iranian reformists were set for one of those righteous defeats, in which a united phalanx of state power stands down rioting protesters who must be content that their defiance will lay the groundwork for change not today but at some unknown point in the future. But this morning we awoke to word that Supreme Leader Ayatollah Ali Khamenei has directed the country's Guardian Council to review claims that the election was tainted by fraud. And Mousavi himself reportedly appeared at a rally today in Tehran, his first appearance post-election...
[T]he decision to break the united front, to get into a discussion of the legitimacy of claims against the regime, usually signals internal dissension that is making that united stance unsustainable.
I've been wondering why Khamenei went along with this coup. Now it seems he's having doubts as well. Monday's events seem to signal a sea change in the way the regime deals with the protests. Along with Khamenei's about-face, Press TV, the Iranian-government-funded English-language broadcast, has begun to feature sympathetic coverage of the demonstrators.
I'm very glad I hedged my positions. This remains a situation which outsiders cannot grasp clearly, and which can change radically very quickly. I just sold 1000 contracts of Ahmadinejad at 86.4.
Iran Update
As everyone knows by now, there is a shitstorm brewing in Iran. The latest reports are that Moussavi has been put under house arrest, and phone access to the outside world is cut off. It's difficult for outsiders to get a clear view of what is happening, but we can be fairly certain that the election was rigged for Ahmadinejad, and possible that the results were made up out of whole cloth.
What's going to happen next? Let's first be clear about what this election was about. It was not about challenging Islamic fundamentalism as a basis of government. It was not about stopping the development of nuclear weapons. It was not a referendum on Obama. In fact, it had very little to do with the outside world.
As this exhaustive pre-election report makes clear, it was about whether Ahmadinejad's brand of fundamentalism would consolidate its grip on power. In brief, for the past 4 years, Ahmadinejad's allies in the militias and Revolutionary Guard have been taking increasing control of the Iranian economy, while his political allies have been taking control of the political institutions. It has been a movement away from the democratic elements of the 1979 election and toward a sort of fascism. Moussavi was a "reformer" only in the sense that he opposed Ahmadinejad's actions.
What surprises me is the acquiescence of Supreme Leader Ayatollah Khamenei. He has validated the election results, and thus put his blessing on the election. If he hadn't been on board, he could have called for new elections. Why has he gone along? One aspect of the Ahmadinejad movement has been a consolidation of power outside the hands of the ayatollahs.
Most likely what will happen is, there will be continued street protests for some days, which will be met with increasingly brutal repression. The police and army chiefs know that Ahmadinejad's victory secures for them a key spot in the new order. Still, this is a cloudy and fluid situation.
I've taken my profits and hedged my positions. Specifically, I now have large bets against both Moussavi and Ahmadinejad. There is a small chance that both of these expire at zero.
I find it interesting that there is at least one other trader putting up lots of money on the other sides of my trades. Someone was very excited about Moussavi before the election, and someone is very excited about Ahmadinejad tonight. I made my covering trade in a single block of more than 500 contracts, which is the biggest single trade I've made in months.
Good links:
Juan Cole on why the election was probably stolen.
Gary Sick on Iran's political coup.
Brian Ulrich on why this may have been orchestrated by the military.
What's going to happen next? Let's first be clear about what this election was about. It was not about challenging Islamic fundamentalism as a basis of government. It was not about stopping the development of nuclear weapons. It was not a referendum on Obama. In fact, it had very little to do with the outside world.
As this exhaustive pre-election report makes clear, it was about whether Ahmadinejad's brand of fundamentalism would consolidate its grip on power. In brief, for the past 4 years, Ahmadinejad's allies in the militias and Revolutionary Guard have been taking increasing control of the Iranian economy, while his political allies have been taking control of the political institutions. It has been a movement away from the democratic elements of the 1979 election and toward a sort of fascism. Moussavi was a "reformer" only in the sense that he opposed Ahmadinejad's actions.
What surprises me is the acquiescence of Supreme Leader Ayatollah Khamenei. He has validated the election results, and thus put his blessing on the election. If he hadn't been on board, he could have called for new elections. Why has he gone along? One aspect of the Ahmadinejad movement has been a consolidation of power outside the hands of the ayatollahs.
Most likely what will happen is, there will be continued street protests for some days, which will be met with increasingly brutal repression. The police and army chiefs know that Ahmadinejad's victory secures for them a key spot in the new order. Still, this is a cloudy and fluid situation.
I've taken my profits and hedged my positions. Specifically, I now have large bets against both Moussavi and Ahmadinejad. There is a small chance that both of these expire at zero.
I find it interesting that there is at least one other trader putting up lots of money on the other sides of my trades. Someone was very excited about Moussavi before the election, and someone is very excited about Ahmadinejad tonight. I made my covering trade in a single block of more than 500 contracts, which is the biggest single trade I've made in months.
Good links:
Juan Cole on why the election was probably stolen.
Gary Sick on Iran's political coup.
Brian Ulrich on why this may have been orchestrated by the military.
Ahmadinejad steals it
I am shocked -- shocked -- that a brutal theocracy did not put on a free and fair election.
Polls Close in Iran
Enormous turnout on election day is encouraging for the Moussavi supporters. Moussavi's trading in the low 70s, and touched 80 at one point last night. It took me a while to understand why people think high turnout is good news for Moussavi.
Elections in Iran are governed by the ayatollahs--only candidates approved by the top religious council can run for office. Thus many Iranians believed that the elections didn't matter. No matter who you voted for, you got a hardline Islamist. The only real way to protest was not to vote. Now, that attitude is changing, and some Iranians are coming to the view that the only way to change the system is by electing the more reformist of the available candidates, and boycotting is not as popular an option. High turnout, then, is associated with support for reform. In 1997, when reformer Khatami won a surprise victory with 69% of the vote, turnout was 80%. That's higher than previous or subsequent elections when conservatives won.
That said, we don't really know where the turnout is or how high it really is. Ahmadinejad's support is among the rural and urban poor, while Moussavi's is with the middle classes. More than likely, Ahmadinejad's allies in government have reduced the number of polling stations in middle class neighborhoods, while making it easier for rural and poor areas to vote. Reporters stationed in Tehran will see long lines at stations in Moussavi areas. We don't know how well that will translate into actual votes.
Daily Chuck has a few other reasons why the turnout may not signal a Moussavi victory.
Both Ahmadinejad and Moussavi's representatives are claiming that they won. No surprise or information there.
I'm selling more Moussavi in the 70s. I still think Ahmadinejad is the favorite.
Elections in Iran are governed by the ayatollahs--only candidates approved by the top religious council can run for office. Thus many Iranians believed that the elections didn't matter. No matter who you voted for, you got a hardline Islamist. The only real way to protest was not to vote. Now, that attitude is changing, and some Iranians are coming to the view that the only way to change the system is by electing the more reformist of the available candidates, and boycotting is not as popular an option. High turnout, then, is associated with support for reform. In 1997, when reformer Khatami won a surprise victory with 69% of the vote, turnout was 80%. That's higher than previous or subsequent elections when conservatives won.
That said, we don't really know where the turnout is or how high it really is. Ahmadinejad's support is among the rural and urban poor, while Moussavi's is with the middle classes. More than likely, Ahmadinejad's allies in government have reduced the number of polling stations in middle class neighborhoods, while making it easier for rural and poor areas to vote. Reporters stationed in Tehran will see long lines at stations in Moussavi areas. We don't know how well that will translate into actual votes.
Daily Chuck has a few other reasons why the turnout may not signal a Moussavi victory.
Both Ahmadinejad and Moussavi's representatives are claiming that they won. No surprise or information there.
I'm selling more Moussavi in the 70s. I still think Ahmadinejad is the favorite.
Swine Flu Update
New official numbers out from the CDC. New total is 17855. If case counts continue to grow at this rate, the final number will be 27123. I'm watching this closely, and hoping the growth rate bends downward. This could be my biggest loss ever.
For the record
There's a very motivated bettor on Moussavi in the Iranian election contracts. I sold 250 contracts this afternoon at an average of 51.8. $1200 is about as much as I want to bet on this at these odds. I'll sell more if the price moves up.
New Intrade Blog
I'd like to welcome www.daily-chuck.com to the blogging-about-Intrade community. He's been blogging for a few days now, and has a good beginner's guide to Intrade and a write-up of the Iranian elections which concludes (as I did) that Ahmadinejad is the favorite.
Iranian Elections tomorrow
Every 4 years, Americans are reminded that Iran is a partial democracy. We're told by the Western media that this year's contest comes down to the incumbent Ahmadinejad and the "reformer" Mir Hossein Mousavi. There will be a primary election, and if no candidate wins 50% of the vote, there will be a runoff two weeks later between the top two candidates.
Here's why I think Mousavi is less than 50% to win:
-In the 2008 legislative elections, after substantial intervention by the ayatollahs, conservative parties trounced reformers. Conservatives who supported Ahmadinejad won more than twice as many seats as any other party.
-Polls are very unreliable. This wiki page lists about 20 polls, with radically different results. Most of the write-ups are in Arabic, so I can't evaluate them. I know of one US-based poll, which shows Ahmadinejad with a big lead, 34% to Mousavi's 14%.
-There is a structural bias in the Western media. Everybody wants to write a story about the Iranians tossing out their angry leader and getting along better in the international community. Thus the stories we read about this election being a toss-up are probably too optimistic. The internals of that US-based poll are probably tilted against Ahmadinejad, and he still has a 20 point lead.
-No incumbent president has lost in the 30-year history of the Islamic Republic. Granted, that's not a lot of elections, but it hints that the field is tilted. The president controls many levers of power, such as patronage networks, or the location of election stations. I'm certain Ahmadinejad is doing everything he can to win, and I'm certain there will be little post-election blowback in the government-monitored media.
-Similarly, the ayatollahs control other levers of power, and will tend to support conservatives over reformers. In the 2005 elections, the 2nd- and 3rd-place candidates alleged that military forces were used to mobilize support for Ahmadinejad. I expect similar interventions to happen this time.
I placed bets against Mousavi around 50%, against Khatami at 2.5% (He dropped out of the race in March), and on Rezaei at 1.1% (He hasn't been mentioned much over here, but he's a conservative, he's placed 2nd in some of the polls, and he might make it into the runoff.)
Here's why I think Mousavi is less than 50% to win:
-In the 2008 legislative elections, after substantial intervention by the ayatollahs, conservative parties trounced reformers. Conservatives who supported Ahmadinejad won more than twice as many seats as any other party.
-Polls are very unreliable. This wiki page lists about 20 polls, with radically different results. Most of the write-ups are in Arabic, so I can't evaluate them. I know of one US-based poll, which shows Ahmadinejad with a big lead, 34% to Mousavi's 14%.
-There is a structural bias in the Western media. Everybody wants to write a story about the Iranians tossing out their angry leader and getting along better in the international community. Thus the stories we read about this election being a toss-up are probably too optimistic. The internals of that US-based poll are probably tilted against Ahmadinejad, and he still has a 20 point lead.
-No incumbent president has lost in the 30-year history of the Islamic Republic. Granted, that's not a lot of elections, but it hints that the field is tilted. The president controls many levers of power, such as patronage networks, or the location of election stations. I'm certain Ahmadinejad is doing everything he can to win, and I'm certain there will be little post-election blowback in the government-monitored media.
-Similarly, the ayatollahs control other levers of power, and will tend to support conservatives over reformers. In the 2005 elections, the 2nd- and 3rd-place candidates alleged that military forces were used to mobilize support for Ahmadinejad. I expect similar interventions to happen this time.
I placed bets against Mousavi around 50%, against Khatami at 2.5% (He dropped out of the race in March), and on Rezaei at 1.1% (He hasn't been mentioned much over here, but he's a conservative, he's placed 2nd in some of the polls, and he might make it into the runoff.)
New Contract Suggestion -- California to Default on its Debts
California State Controller: Out of Cash in 50 Days
There's no question the state of California is in about as good of financial shape as Citibank. Voters just turned down ballot initiatives to raise taxes. Will California get bailed out? Stop paying its workers? Stop paying its bondholders?
If you're interested in trading this, post in the comments.
There's no question the state of California is in about as good of financial shape as Citibank. Voters just turned down ballot initiatives to raise taxes. Will California get bailed out? Stop paying its workers? Stop paying its bondholders?
If you're interested in trading this, post in the comments.
Creigh Deeds WOO WOO!
The final polls had Deeds up by 13 points; in the actual election he won by 24 points.
Marc Ambinder has a column up, "Why Deeds Won in Virginia: Five Theories." He leaves out the biggest reasons:
-Brian Moran is a by-the-book lefty, who fought a good fight leading the minority party in the state legislature. He would do well in a state like Connecticut, but not so much in Virginia.
-Reasonable people can disagree about whether Terry McAuliffe is a human being, an alien, or a malfunctioning robot. No campaign war chest can overcome the fact that a candidate is in the uncanny valley.
Marc Ambinder has a column up, "Why Deeds Won in Virginia: Five Theories." He leaves out the biggest reasons:
-Brian Moran is a by-the-book lefty, who fought a good fight leading the minority party in the state legislature. He would do well in a state like Connecticut, but not so much in Virginia.
-Reasonable people can disagree about whether Terry McAuliffe is a human being, an alien, or a malfunctioning robot. No campaign war chest can overcome the fact that a candidate is in the uncanny valley.
Turnout light in VA Primary
Looks like my estimate of 10-12% turnout was WAY too high. "Election and party officials believe less than 5 percent of the state's 5 million registered voters will take part." Thunderstorms are no doubt contributing to low turnout.
I think this is good news for Deeds. In polls, he had the most dedicated support, while 2nd-place McAuliffe held a lot of support from people who hadn't thought about the race much.
That said, when turnout is this low, anything can happen. The pundits are all claiming Deeds will have the weakest ground game, but it's not clear what that's based on. What is clear is that there is a dedicated "anybody but McAuliffe" vote, and that vote consolidated behind Deeds over the past week.
Deeds is a very strong favorite, but with the wildcard of ultra-low turnout, I'm not betting more at the 90% odds available right now.
I think this is good news for Deeds. In polls, he had the most dedicated support, while 2nd-place McAuliffe held a lot of support from people who hadn't thought about the race much.
That said, when turnout is this low, anything can happen. The pundits are all claiming Deeds will have the weakest ground game, but it's not clear what that's based on. What is clear is that there is a dedicated "anybody but McAuliffe" vote, and that vote consolidated behind Deeds over the past week.
Deeds is a very strong favorite, but with the wildcard of ultra-low turnout, I'm not betting more at the 90% odds available right now.
Swine flu: CDC Intern hung over. Again.
Man, I was all set to test my theory that Friday's jump in case count was just a statistical blip. And then I find that the CDC has gone from updating the case count every day, to Monday-Wednesday-Friday, to just Friday. As of this morning, none of the states had updated their counts either.
As someone with a large short position, I suppose this is good news. In practice it means that the last update before the Intrade contracts expire will be June 26th. Just 18 more days. To finish with more than 25,000 cases, there will need to be an average of 562 new cases each day. The average over the last month is 391. I guess we'll have to wait till Friday to see...
As someone with a large short position, I suppose this is good news. In practice it means that the last update before the Intrade contracts expire will be June 26th. Just 18 more days. To finish with more than 25,000 cases, there will need to be an average of 562 new cases each day. The average over the last month is 391. I guess we'll have to wait till Friday to see...
Virginia Governor: Deeds running away with it
New PPP poll out Sunday night has Deeds at 40%, McAuliffe at 26%, and Moran at 24%. Their blog has a whole bunch of worthwhile analysis. Basically, Deeds has consolidated the anti-McAuliffe vote, and the undecideds have broken exclusively for him. As the most conservative Democrat, he's also pulling in independents and Republicans who don't have a serious race to vote on on Tuesday.
The poll didn't ask about prior voting history or whether voters might change their minds, but Deeds led on those measures in past polls. Survey USA will have another poll out Monday. We'll see if they've got the same results.
I bet more on Deeds at 75%, against McAuliffe at 25%, and against Moran at 10%. Would gladly take more action at those prices.
The poll didn't ask about prior voting history or whether voters might change their minds, but Deeds led on those measures in past polls. Survey USA will have another poll out Monday. We'll see if they've got the same results.
I bet more on Deeds at 75%, against McAuliffe at 25%, and against Moran at 10%. Would gladly take more action at those prices.
Swine flu models fail
I had this great graph all set to go showing how remarkably linear the testing rate of swine flu has been. In fact, I'm going to post it anyway, just to show how much sense it makes.
And then the actual data has to go and get involved. From that analysis, I expected the case count to grow by an average of 412 cases per day. Which would put make the total 11466 on Thursday and 11878 on Friday. In yesterday's conference call, the CDC put the case count at 11468. Great. And then today, the official tally is updated to... 13217.
Here's a graph.
I really don't know why the case count is spiking now. All the health authorities are scaling back their testing. The Texas Health Department issued a directive last week advising against further testing for swine flu. Wisconsin "demobilized" its H1N1 emergency response team. And yet the counts in those two states have risen more over the past week than any other states.
I believe today's numbers are a one-time spike. Previously the numbers listed by the state health departments significantly lagged the numbers reported by the CDC. Even immediately after an update, many of the numbers would be off by hundreds. This morning, at least in the states which still update their pages, nearly everything matches the CDC numbers.
Time will tell, but if the model turns out wrong, at least I have company. Remember those elaborate models some academics put out when this thing first started? The ones that predicted a worst-case scenario of 2000 cases at the end of May? That didn't work out so well. The New York Times revisited them a couple days ago, in a giant Nelson-esque "Haw Haw!" I feel for them -- they did the best they could with very limited initial data. Though they probably should have hedged their conclusions a lot better. What can I say? Predictions are a hard business.
And then the actual data has to go and get involved. From that analysis, I expected the case count to grow by an average of 412 cases per day. Which would put make the total 11466 on Thursday and 11878 on Friday. In yesterday's conference call, the CDC put the case count at 11468. Great. And then today, the official tally is updated to... 13217.
Here's a graph.
I really don't know why the case count is spiking now. All the health authorities are scaling back their testing. The Texas Health Department issued a directive last week advising against further testing for swine flu. Wisconsin "demobilized" its H1N1 emergency response team. And yet the counts in those two states have risen more over the past week than any other states.
I believe today's numbers are a one-time spike. Previously the numbers listed by the state health departments significantly lagged the numbers reported by the CDC. Even immediately after an update, many of the numbers would be off by hundreds. This morning, at least in the states which still update their pages, nearly everything matches the CDC numbers.
Time will tell, but if the model turns out wrong, at least I have company. Remember those elaborate models some academics put out when this thing first started? The ones that predicted a worst-case scenario of 2000 cases at the end of May? That didn't work out so well. The New York Times revisited them a couple days ago, in a giant Nelson-esque "Haw Haw!" I feel for them -- they did the best they could with very limited initial data. Though they probably should have hedged their conclusions a lot better. What can I say? Predictions are a hard business.
More Virginia Polls
Things are looking pretty good for Deeds.
There's a new SUSA poll out which puts the race at McAuliffe 35%, Deeds 29%, and Moran 26%. There's also a Suffolk University poll which has Deeds 29%, McAuliffe 26%, and Moran 23%.
As always, it's hard to poll primaries in off years. Let's delve into the numbers a bit more closely. Based on similar races in the past, turnout will be quite low. I expect it to be in the range of 10-12% of registered voters. The SUSA poll identified 517 "Likely Democratic Primary Voters" out of 1701 Registered Voters surveyed, or 30%. That is far too high. Probably only 150 or so of the 517 will actually vote. That makes it very significant that Deeds is ahead among voters who say their minds are made up.
The Suffolk poll was done a little differently from most. They first asked which candidate a voter would vote for, which resulted in Deeds 27%, McAuliffe 20%, Moran 20%, and Undecided/Refused 32%. They then followed up with the Undecided/Refused voters, "If you were standing in the voting booth today would you vote for McAuliffe, Moran, or Deeds?" McAuliffe took 17%, Moran 8%, and Deeds only 4%. These "probed" Undecided voters will almost certainly not vote, and in my opinion should not have been included in the sample.
Suffolk also asked voters which of the candidates would be more successful on a series of issues and character qualities -- transportation, the environment, experience, leadership, cares about people like you, most negative campaign. On all 6 of these questions, Deeds got the best evaluation.
Things are looking pretty good for Deeds. With these poll numbers, I'd rather be Deeds than McAuliffe. If I were Deeds, I'd be hoping for bad weather to discourage McAuliffe's less-motivated voters. The weather report is calling for isolated thunderstorms throughout Virginia on Tuesday.
Accordingly, I've put bets on Deeds and against McAuliffe. I'd really like some more volume on these!
There's a new SUSA poll out which puts the race at McAuliffe 35%, Deeds 29%, and Moran 26%. There's also a Suffolk University poll which has Deeds 29%, McAuliffe 26%, and Moran 23%.
As always, it's hard to poll primaries in off years. Let's delve into the numbers a bit more closely. Based on similar races in the past, turnout will be quite low. I expect it to be in the range of 10-12% of registered voters. The SUSA poll identified 517 "Likely Democratic Primary Voters" out of 1701 Registered Voters surveyed, or 30%. That is far too high. Probably only 150 or so of the 517 will actually vote. That makes it very significant that Deeds is ahead among voters who say their minds are made up.
The Suffolk poll was done a little differently from most. They first asked which candidate a voter would vote for, which resulted in Deeds 27%, McAuliffe 20%, Moran 20%, and Undecided/Refused 32%. They then followed up with the Undecided/Refused voters, "If you were standing in the voting booth today would you vote for McAuliffe, Moran, or Deeds?" McAuliffe took 17%, Moran 8%, and Deeds only 4%. These "probed" Undecided voters will almost certainly not vote, and in my opinion should not have been included in the sample.
Suffolk also asked voters which of the candidates would be more successful on a series of issues and character qualities -- transportation, the environment, experience, leadership, cares about people like you, most negative campaign. On all 6 of these questions, Deeds got the best evaluation.
Things are looking pretty good for Deeds. With these poll numbers, I'd rather be Deeds than McAuliffe. If I were Deeds, I'd be hoping for bad weather to discourage McAuliffe's less-motivated voters. The weather report is calling for isolated thunderstorms throughout Virginia on Tuesday.
Accordingly, I've put bets on Deeds and against McAuliffe. I'd really like some more volume on these!
Cold Fusion
There's a longish thread on the Intrade forums about cold fusion. Now, theoretically, cold fusion should be just as good a topic for prediction markets as politics or economics. If cold fusion is real, it has enormous implications for society as a whole. This particular contract, though, doesn't really reveal much of anything about whether we'll all be driving around in cars powered by Mr. Fusion.
The contract is about whether Yoshi Arata's cold fusion demonstration will be replicated and published in a peer-reviewed journal. So far, so good. Replication and peer review are the heart of the modern scientific method. Here's one problem. One of the dirty little secrets of science is that almost anything can get through peer review if you send it to a crappy enough journal. Arata's original paper was published in the Journal of the Japanese High Temperature Society. Hell, the Creationists founded their own peer-reviewed journal so they could slap the "peer-review" stamp on their anti-evolution diatribes.
Another problem is that mere replication is not enough to demonstrate that cold fusion is real. There are legitimate criticisms of the experimental design. In essence, these criticisms say, "You can replicate the finding a hundred times, but it doesn't prove that cold fusion is real, because you're seeing an artifact of the way the experiment was designed." The best evaluation I've read can be found here--see comment #15 for an in-depth technical discussion.
Finally, cold fusion is something of a backwater. The research is done mainly by labs with little credibility in the larger physics community. Their results get hyped by a bunch of non-scientists who really really want cold fusion to be real. No highly skilled physicists have gone into that field. Think about it. Say you're a very smart grad student, and you have a choice of which lab to work in -- do you choose the high-profile lab in a hot topic with plenty of money? Or the emeritus professor puttering around with a shoestring budget in a topic that's synonymous with bad science? The cream of the crop choose the hot topic, with the result that the unpopular field will often make important mistakes.
My guess is that Arata has a replicable but meaningless result. I expect there will be a replication published before too long, probably somewhere like the East Asian Journal of Low Energy Nuclear Reactions.
The contract is about whether Yoshi Arata's cold fusion demonstration will be replicated and published in a peer-reviewed journal. So far, so good. Replication and peer review are the heart of the modern scientific method. Here's one problem. One of the dirty little secrets of science is that almost anything can get through peer review if you send it to a crappy enough journal. Arata's original paper was published in the Journal of the Japanese High Temperature Society. Hell, the Creationists founded their own peer-reviewed journal so they could slap the "peer-review" stamp on their anti-evolution diatribes.
Another problem is that mere replication is not enough to demonstrate that cold fusion is real. There are legitimate criticisms of the experimental design. In essence, these criticisms say, "You can replicate the finding a hundred times, but it doesn't prove that cold fusion is real, because you're seeing an artifact of the way the experiment was designed." The best evaluation I've read can be found here--see comment #15 for an in-depth technical discussion.
Finally, cold fusion is something of a backwater. The research is done mainly by labs with little credibility in the larger physics community. Their results get hyped by a bunch of non-scientists who really really want cold fusion to be real. No highly skilled physicists have gone into that field. Think about it. Say you're a very smart grad student, and you have a choice of which lab to work in -- do you choose the high-profile lab in a hot topic with plenty of money? Or the emeritus professor puttering around with a shoestring budget in a topic that's synonymous with bad science? The cream of the crop choose the hot topic, with the result that the unpopular field will often make important mistakes.
My guess is that Arata has a replicable but meaningless result. I expect there will be a replication published before too long, probably somewhere like the East Asian Journal of Low Energy Nuclear Reactions.
Take your Haterade outside, son
Midasoracle has been busy hatin' the playa and hatin' the game.
I agree with him that the prediction markets are rarely very accurate. I've made a bunch of money being, well, wiser than the crowd, because the crowd gets the price wrong so often. Here's one contributing factor: none of the individual participants have an interest in making the price right. If I think a market is overpriced, I want to short as much as I can at as high a price as I can. I don't immediately sell every available bid that's above 0.1% of my estimate of fair value -- I put out offers that are some level above fair value in hopes someone else will take them.
It's only in very competitive markets where I'll be more aggressive with my price-making. If I see or expect other smart people with deep pockets, I'll move to be ahead of them. That really doesn't happen all that often. Based on my Intrade blog, the Intrade forum, and emails and PMs I've received, I'd estimate the number of sharp traders with more than $10,000 to trade is in the single digits. Many of them have different specialties (entertainment, financials, politics, etc.) and don't compete with one another.
Fundamentally, in order to have prices reliably reflect the crowd's consensus (and it's a whole other issue how accurate that is) you need to have at least half a dozen well-educated and well-funded gamblers trading it. This is only rarely achieved on Intrade.
I agree with him that the prediction markets are rarely very accurate. I've made a bunch of money being, well, wiser than the crowd, because the crowd gets the price wrong so often. Here's one contributing factor: none of the individual participants have an interest in making the price right. If I think a market is overpriced, I want to short as much as I can at as high a price as I can. I don't immediately sell every available bid that's above 0.1% of my estimate of fair value -- I put out offers that are some level above fair value in hopes someone else will take them.
It's only in very competitive markets where I'll be more aggressive with my price-making. If I see or expect other smart people with deep pockets, I'll move to be ahead of them. That really doesn't happen all that often. Based on my Intrade blog, the Intrade forum, and emails and PMs I've received, I'd estimate the number of sharp traders with more than $10,000 to trade is in the single digits. Many of them have different specialties (entertainment, financials, politics, etc.) and don't compete with one another.
Fundamentally, in order to have prices reliably reflect the crowd's consensus (and it's a whole other issue how accurate that is) you need to have at least half a dozen well-educated and well-funded gamblers trading it. This is only rarely achieved on Intrade.
New Poll in Virginia
PPP has a new poll out showing Creigh Deeds taking the lead in the VA governor's primary. A couple weeks ago, PPP had McAuliffe ahead 29-20-20. Today Deeds is ahead with 27%, McAuliffe at 24%, and Moran at 22%. PPP attributes the shift to the Washington Post's endorsement of Deeds, along with Moran running negative ads against McAuliffe in certain areas.
The race is still quite fluid with many voters still undecided and nearly half who have a preference saying they could change their minds.
Polls will be inaccurate for this race. Primaries and special elections come down to turnout, which is difficult to predict. This election is happening in an off year, with only one interesting race, with no particularly compelling candidates, so I expect overall turnout will be quite low. With that in mind, the cross tabs have a very good result for Creigh Deeds.
The vote preference is broken down by whether respondents voted in only the 2008 primary or the '05, '06, or '07 primaries as well. Here's the breakdown:
Deeds' lead is much larger among the dedicated voters who come out in off years. This morning I bet on him and against McAuliffe.
The race is still quite fluid with many voters still undecided and nearly half who have a preference saying they could change their minds.
Polls will be inaccurate for this race. Primaries and special elections come down to turnout, which is difficult to predict. This election is happening in an off year, with only one interesting race, with no particularly compelling candidates, so I expect overall turnout will be quite low. With that in mind, the cross tabs have a very good result for Creigh Deeds.
The vote preference is broken down by whether respondents voted in only the 2008 primary or the '05, '06, or '07 primaries as well. Here's the breakdown:
Deeds' lead is much larger among the dedicated voters who come out in off years. This morning I bet on him and against McAuliffe.
May Results: eh.
Pretty much flat for the month of May. I've withdrawn a total of $27,500, and my Available+Frozen balances sum to $35,300. Subtract about $500 for losing positions that haven't expired yet, and I'm up about $1000 in May and $62,300 since starting with $50 in fall of 2007.
It was a good feeling getting this in the mail:
In other good news, this site has a PageRank of 6! PageRank is the heart of Google's search algorithm; it is a measure from 0 to 10 of how important a site is on the internet. This is determined mainly by how other often other important sites link to it. For reference, the biggest political blogs like dailykos have PR 8. Popular specialty blogs like fivethirtyeight have PR 7. Intrade.com itself is a 7. Midasoracle.org, perhaps the most prolific predictions market blog, is a 6. For having spent zero effort on search-engine optimization, I'm very happy with this.
By the way, I have failed utterly at making money from this blog. What, you guys don't want to click links to sketchy stock-futures trading sites? Or declare bankruptcy in Virginia?
It was a good feeling getting this in the mail:
In other good news, this site has a PageRank of 6! PageRank is the heart of Google's search algorithm; it is a measure from 0 to 10 of how important a site is on the internet. This is determined mainly by how other often other important sites link to it. For reference, the biggest political blogs like dailykos have PR 8. Popular specialty blogs like fivethirtyeight have PR 7. Intrade.com itself is a 7. Midasoracle.org, perhaps the most prolific predictions market blog, is a 6. For having spent zero effort on search-engine optimization, I'm very happy with this.
By the way, I have failed utterly at making money from this blog. What, you guys don't want to click links to sketchy stock-futures trading sites? Or declare bankruptcy in Virginia?
Free Money
One of the Intrade forum posters mentioned recently that he had over half of his margin tied up in a single contract, which was a mortal lock. In his words, it's not a huge rate of return, but it is in the double digits. I respect this guy's intelligence, and I'm sure he did find a mortal lock. The thing is, that's not that hard to do!
I browsed through the available contracts today. Here's a list of about 15 that are sure things (>99%) with standing bids that offer free money. I've reversed the prices of some of them so that the free money rate is easier to see (e.g. changing US.UNEMPLOY.DEC09.7.75% from 95.1 to 4.9). Click to expand.
And this is just what's out there with standing bids! No doubt there are many other mortal lock contracts where you could put out an offer at 15-20 and get action.
Disclosure: I'm not buying any of these because the free money rate of return is lower than what I can achieve by taking risk. One exception is the US.RECESSION.2009, of which I own 100 contracts.
I browsed through the available contracts today. Here's a list of about 15 that are sure things (>99%) with standing bids that offer free money. I've reversed the prices of some of them so that the free money rate is easier to see (e.g. changing US.UNEMPLOY.DEC09.7.75% from 95.1 to 4.9). Click to expand.
And this is just what's out there with standing bids! No doubt there are many other mortal lock contracts where you could put out an offer at 15-20 and get action.
Disclosure: I'm not buying any of these because the free money rate of return is lower than what I can achieve by taking risk. One exception is the US.RECESSION.2009, of which I own 100 contracts.