I’ve been
recently tracking the Presidential odds on PaddyPower, an Ireland
domiciled online gambling site. Here are the current
odds:
For those
not in the world of gambling, you can interpret the odds by saying
the first number is the amount of cash you will win given a cash
outlay of the second the number. You can see then that
Hillary is a clear favourite. It requires a $3 cash outlay to
win $1 if she takes the Presidency. A winning bet on Trump,
however, brings in $5 for only a $2 cash outlay. This means
people don’t see it as a very probable outcome.
But let me
show you why this is almost certainly a true arbitrage
scenario. Have a look at the following chart.
So what we
have in the above chart are all the states that have had total
manufacturing compensation (nominal salaries and wages) declines
since 2007 (source: BEA), the last year before the financial crisis
which led to the still in play, trickle down economic
policies. Note there are 29 states that have lost
manufacturing income (which incidentally continues to decline).
But
perhaps more interesting is that of these 29 states, 27 have had
primary elections. Of those 27, 25 voted for Tump outright
and 1 state was essentially split with Cruz (i.e. Maine).
Only Kansas bucked this almost perfect predictor and voted heavily
for Cruz. If we look at the 2 remaining negative
manufacturing income states that have yet to hold their primaries,
namely, NJ and WV, we can conclude that WV will now not go to
Hillary, given her attack on coal miners.
So looking
at the general election what can we predict? Well let’s start
by looking at the 2012 general election results.
What we
find is that of the 29 negative manufacturing income states 19 of
them voted democrat in the 2012 general election. Now to win
the general election one needs a total of 270 of the possible 538
electors up for grabs. In the last election Republicans ended
up with 206 electors or 64 short of a win. Let’s assume it
will be very difficult for Hillary to pick up states that went
Republican in the last general election. But there is an
extremely high probability that Trump will pick up some of these 19
negative manufacturing income states that voted Democrat in the
2012 election.
If we
break it down we find that these 19 states offer up a total of 232
electors. Now we can pretty much say up front that Trump will
take his home away from home (already a swing) state of
Florida. So that’s 29 electors of the 64 needed, meaning
Trump at this point only has to take 35 additional electors from
these remaining 18 states that have been adamant supporters of his
America First policies. With many of these states already
considered ‘swing’ states like Ohio and Pennsylvania having many
unions that normally back Democrats now publicly endorsing Trump,
there is almost zero probability that Trump doesn’t secure 35 of
the remaining 203 electors from these 18 states.
And so if
you’re a betting man (or woman) I’d say the 5:2 odds being given by
PaddyPower on a Trump Presidency is free money and your arbitrage
trade of the day.
Learned that playing the racetrack for 50 years and from growing
up on the streets of Brooklyn, NY. If it looks too good to be
true, it usually is.
PaddyPower, much like other Irish and British bookmakers, is
nobody's fool. They've been setting odds on all kinds of
events for nearly 30 years, and are in the business of turning a
profit. It 's tough gaining an edge, especially on a
political event as 'exposed' as the US presidential
election.
Betting Trump might be a winning wager...and it might not, but
it's certainly not a gimme. Thinking it is will only get you
into trouble. Loved reading your analysis, but from my
vantage point, there are far too many potential twists and turns to
bet with conviction. Have a go at 5-2, just don't bet your
house on it.
Posted by sbaxman111 on 10th of May 2016 at 02:10 pm
I would have preferred winning the 5000-1 odds for the
English soccer league winners - who 2 years ago were on the verge
of being kicked out of the league. $10 would have done quite
"nicely".
I much prefer the odds that Technical analysis gives me
over "Paddypower" odds.
I think the crux of the article was that the author could
see the possibility of votes going in a certain direction based on
unhappy workers in manufacturing states. I just wonder what the
odds are of more QE or some other form of stimulus appearing if the
economy stumbles further? Just in time to help the Democratic
candidate? But, check out the latest news about big Obamacare
premium hikes slated to be announced just days before the election.
That news might just change a few votes when they see 15-30%
increases in some places.
Best Arbitrage Trade in the World Today
Posted by sbaxman111 on 10th of May 2016 at 10:58 am
From: FirstRebuttal.com
I’ve been recently tracking the Presidential odds on PaddyPower, an Ireland domiciled online gambling site. Here are the current odds:
For those not in the world of gambling, you can interpret the odds by saying the first number is the amount of cash you will win given a cash outlay of the second the number. You can see then that Hillary is a clear favourite. It requires a $3 cash outlay to win $1 if she takes the Presidency. A winning bet on Trump, however, brings in $5 for only a $2 cash outlay. This means people don’t see it as a very probable outcome.
But let me show you why this is almost certainly a true arbitrage scenario. Have a look at the following chart.
So what we have in the above chart are all the states that have had total manufacturing compensation (nominal salaries and wages) declines since 2007 (source: BEA), the last year before the financial crisis which led to the still in play, trickle down economic policies. Note there are 29 states that have lost manufacturing income (which incidentally continues to decline).
But perhaps more interesting is that of these 29 states, 27 have had primary elections. Of those 27, 25 voted for Tump outright and 1 state was essentially split with Cruz (i.e. Maine). Only Kansas bucked this almost perfect predictor and voted heavily for Cruz. If we look at the 2 remaining negative manufacturing income states that have yet to hold their primaries, namely, NJ and WV, we can conclude that WV will now not go to Hillary, given her attack on coal miners.
So looking at the general election what can we predict? Well let’s start by looking at the 2012 general election results.
What we find is that of the 29 negative manufacturing income states 19 of them voted democrat in the 2012 general election. Now to win the general election one needs a total of 270 of the possible 538 electors up for grabs. In the last election Republicans ended up with 206 electors or 64 short of a win. Let’s assume it will be very difficult for Hillary to pick up states that went Republican in the last general election. But there is an extremely high probability that Trump will pick up some of these 19 negative manufacturing income states that voted Democrat in the 2012 election.
If we break it down we find that these 19 states offer up a total of 232 electors. Now we can pretty much say up front that Trump will take his home away from home (already a swing) state of Florida. So that’s 29 electors of the 64 needed, meaning Trump at this point only has to take 35 additional electors from these remaining 18 states that have been adamant supporters of his America First policies. With many of these states already considered ‘swing’ states like Ohio and Pennsylvania having many unions that normally back Democrats now publicly endorsing Trump, there is almost zero probability that Trump doesn’t secure 35 of the remaining 203 electors from these 18 states.
And so if you’re a betting man (or woman) I’d say the 5:2 odds being given by PaddyPower on a Trump Presidency is free money and your arbitrage trade of the day.
Happy trading!
There is no such thing as 'free money'
Posted by RichieD on 10th of May 2016 at 01:33 pm
Learned that playing the racetrack for 50 years and from growing up on the streets of Brooklyn, NY. If it looks too good to be true, it usually is.
PaddyPower, much like other Irish and British bookmakers, is nobody's fool. They've been setting odds on all kinds of events for nearly 30 years, and are in the business of turning a profit. It 's tough gaining an edge, especially on a political event as 'exposed' as the US presidential election.
Betting Trump might be a winning wager...and it might not, but it's certainly not a gimme. Thinking it is will only get you into trouble. Loved reading your analysis, but from my vantage point, there are far too many potential twists and turns to bet with conviction. Have a go at 5-2, just don't bet your house on it.
Arbitrage Trade
Posted by sbaxman111 on 10th of May 2016 at 02:10 pm
I would have preferred winning the 5000-1 odds for the English soccer league winners - who 2 years ago were on the verge of being kicked out of the league. $10 would have done quite "nicely".
I much prefer the odds that Technical analysis gives me over "Paddypower" odds.
I think the crux of the article was that the author could see the possibility of votes going in a certain direction based on unhappy workers in manufacturing states. I just wonder what the odds are of more QE or some other form of stimulus appearing if the economy stumbles further? Just in time to help the Democratic candidate? But, check out the latest news about big Obamacare premium hikes slated to be announced just days before the election. That news might just change a few votes when they see 15-30% increases in some places.
I would put a few
Posted by a_l_ on 10th of May 2016 at 11:38 am
I would put a few bucks on Biden as a hedge.