Do the spread markets offer good value?

The big unanswered question in the Labour succession is how long is Tony going to stay. In the past three weeks opinion has moved from a departure during 2006 and all the focus is on 2007 – particularly the second quarter – April to June where the best price is now 1.7/1.

At the weekend there was a report that the police investigation into the “cash for peerages” row has “yet to find a smoking gun” so that risk for 2007 punters might be on the decline.

The Betfair market is based on when he will “officially cease to be leader of the Labour Party” which might not be the same as the time he leaves Downing Street.

There’s another betting opportunity which is clearer on this count and could conceivably be for a longer period. This is the spread market from Cantor Spreadfair on how many weeks Blair’s third term will continue for.

This relates specifically to “How many weeks will Tony Blair remain as Prime Minister during his third term in office – starting on May 9th 2005″. The current spread is for 95-98 weeks – so the latest “BUY” takes us into the second half of March.

If you bet on this today and he resigned next week you would lose 24 times your stake level. But if he makes until the end of March and beyond your winnings would increase by your stake level for each extra week he stays.

As we build up to next week’s conference all the talk will be of the gloom and doom facing Blair. But as my Labour insider friend observed this afternoon “Labour conferences usually surprise the pundits by their loyalty and enthusiasm”. He reckons on a February announcement leading to his term as Prime Minister coming to an end in May or June.

I think this is a good bet.

Mike Smithson