Monday Call – August 9 2004 [next planned update Wednesday]

Monday Call – August 9 2004 [next planned update Wednesday]


    How the pundits will get the next General Election wrong

We believe that the result of the next General Election will be seen as one of the great upsets of modern times to rank alongside 1970, February 1974 and 1992 when Edward Heath, Harold Wilson and John Major respectively defied the pundits, and to a large extent the opinion polls, to gain unexpected victories. A Guardian feature by two Labour thinkers today notes “..Given the volatility of contemporary politics, it is by no means impossible that Labour will lose in a reverse landslide.”

We believe that the “experts” will call it wrongly because they will apply the swings to the partys’ vote shares in pre-election opinion polls on a uniform national basis that will produce seat projections for Labour that are far in excess of what they actually get.

We believe that there is an inherent “fault” in the seat totals from last time because Labour won upto 40 extra Tory seats as a result of Lib Dems voting for them and not their own party – something they are much less likey to do now creating the real possibility of serious seat losses over and above the national swing.

We believe that the pundits and the pollsters always seriously underestimate the roles that local party machines have in getting their votes out. This will be particularly diffifcult for Labour this time because of the collapse in the number of party members, councillors and other activists – factors that will aid Lib Dem targeting and create new possibilities for seats to change hands outside the national swing. We also think that many local Tory organisations are in better shape than they were.

We cannot yet predict what the unexpected outcome will be but we stick by our call on Labour to win most General Election seats because this market is NOT about gaining a majority.

But we say BUY Lib Dem in the General Election spread markets because we believe the party will get more than the 70 seats – the current spread position. When we first made this call on June 16 the BUY level was 58 seats so those who took the advice have already chalked up some nice profits.

We said SELL Labour at 346 – it’s now down four and we still say sell. It went up to that high level after the media bought Downing Street’s spin that the 27% swing against Labour at Birmingham Hodge Hill and the loss of Leicester South meant that the two by-elections on on July 15 had ended in a “score draw“.

LAB 342-350 (-4): CON 212-220 (+3): LIBD 66-70 (+2)

With the boundary changes north of the border the total of MPs required for a majority will be 324 seats. If you don’t like the risks of spread betting take the Labour to get 335 seats or less at 2/1 with Bet365 in a market that they do not make available through the betting odds search engines – but link from here.

Even though there’s renewed criticism of the Prime Minister today from within the Labour establishment we think it’s too late now to see any any changes in the position of Tony Blair, Michael Howard or Charles Kennedy in the various party leader markets. We believe that they will all be the leaders of their parties on election day.

We believe that the election will be held on the first Thursday in May 2005 – 05/05/05. The pricing starts to look quite attractive.

WAIT for prices to move out before you BET on John Kerry to be the next US President. The latest round of polls almost all show comfortable leads for the Democrat ticket..

SUMMER SITE UPDATE SCHEDULE Planned updates will be on Mondays, Wednesday and Fridays until we go on holiday in the last week in August and the first week in September.

Mike Smithson


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