How will the Osama video affect the election?

How will the Osama video affect the election?

    Another video drives the markets

Gamblers on both sides of the Atlantic have reacted in a fairly cool manner to the video tape of Osama Bin Laden that was released last night.

There were sharp moves to Bush as people took the view that this would remind electors of the ever-present terrorist threat. Then there has been a gradual easing back after some commentators observed that Osama’s “return” was another reminder of a failure of the Bush administration to capture Osama lending weight to the charge that by going into Iraq the President has had “his eye off the ball” of the main threat.

    There is no poll evidence yet to test public reaction and the key issue is how Bush and Kerry play it this weekend. Our view is that it will just reinforce opinion on either side.

The off-shore Tradesports exchange initially went to Bush 55 Kerry 45 but that has now come back quite a lot and is now trading at not much more than before the Osama video. The Iowa Electronic Exchange market has had a bigger move from Kerry but, as the Economist points out this week, investors on this market can only risk relatively small sums and so the price might not be quite as sensitive.

The volatile UK Betfair exchange moved sharply to Bush and is now coming back a bit.

Betting round up – 5.30 am BST Saturday
Bush 52.5 Kerry 47.5Iowa Political Futures Market
Bush 53.5 Kerry 46.5 Tradesports exchange
Bush 1.81 Kerry 2.18 Betfair exchange
Bush 8/11Kerry 23/20 UK bookmaker best price

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