Monday Call – July 12 2004

Monday Call – July 12 2004

Updated 1-50pm
Democratic conventions

    Will the Kerry-Edwards price tighten even further?

At the end of the month thousands of Democrat delegates will head for their party’s Convention in Boston to endorse formally the Kerry-Edwards ticket and start the campaign. The choice of John Edwards for the V-P place has gone down well in the polls and they are scenting victory.

Yet at the turn of the year, as the following shows, nobody gave the party a chance of ousting Bush from the White House in November.
Odds on Democrats winning 2004 Presidential Election

December – Howard Dean firm favourite – 5/2
January – before the primaries started – 21/10
February – Kerry’s nomination becomes clear – 7/4
March – after “Super Tuesday” – 6/4
April – Iraq problems for Bush mount – 7/5
May – We make our “Back Kerry call” – 6/5
July – Edwards chosen as running mate – 1/1
August – after the Boston Convention – ??
November – election day – ??

The only reason for betting now in a long-term market is if you think prices are going to tighten. This is hard to predict but last week, after the Edwards V-P choice was announced, the Bush price on the Iowa Electronic Exchange where “political futures” are traded dropped to 21/20. Our BACK Kerry call remains even though the value is decreasing.

Other White House race bets are available on Tradesports – the US-focussed betting exchange including 6/1 on the result not being certain for six weeks – perhaps after another Florida-type debacle.

Thursday’s By-Elections. William Hill have now reopened their markets on the Leicester South and Birmingham Hodge Hill by-elections. In addition there is now a betting exchange market with Betfair. As of time of this update – 1-50pm – only about £1,500 had been matched on the betting exchange. The heavy favourites are Labour in Birmingham and the Lib Dems in Leicester. We will be looking at this in more detail tomorrow.

General Election. The only General Election bets worth placing this week are on the Tories – and we think that Labour is going to win. Most Tory prices should tighten over the next few days which promises to be a very tricky period for the Government.

The Populus Poll in the Times last week caused Labour to harden and the Tories to move out. Gamblers should note that in what we think was the first national election where one of its polls could be tested against real results, last month’s Euros Elections, Populus-

  • Failed to get any of the first four parties in the right order
  • Over-estimated the Labour share by more than a tenth
  • Under-estimated the Tory share more than a tenth
  • Gamblers should also factor in that last May Populus annnouced that it was building what amounted then to a 2% Labour bias into its polls because it believed that Labour supporters were reluctant to tell pollsters their true allegiance.

    Our Labour call remains but don’t bet until after this week’s by-elections and the Butler Report. If you do think that the Tories are going to win the General Election now is probably the time to act. The spread prices have moved in line with the other market sentiment –

    LAB 335-345 (+5): CON 233-243 (-4): LIBD 55-60.

    If you want to BUY the Tories or SELL Labour then now is the time to do it. That Lib Dem spread looks good because the latest polls are showing them well above 20% and 60+ seats seems achievable.

    Date of the General Election. If you’ve any doubt about 05/05/05 being the date then check this article by Bob Worcester, Head of Mori. The prices are quite reasonable and this might be a good bet.

    Party Leaders. Quite what are we to make of this weekend’s stories that Tony Blair was on the ponit of stepping down a week or so ago? Our view is that barring an accident he will be Labour leader at the election and that 8/15 looks like a good bet.

    Euro Referendum. If we knew the date of the vote then we might be tempted by the 13/8 YES price. But you could be locking up your money for a long time.

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