Intrade Odds: Newt Gingrich Rising, Slightly

Since our last look at the Intrade market on the 2012 Republican nomination nearly a month ago, Mitt Romney has maintained his dominant position. Romney is currently trading at 69.4%, and the man in second place--Rick Perry--is at 9.9%. The two leading candidates are at the same place they were last time, but that's to Romney's advantage: It's less than two months until the voting begins. If you're not in first place, less time means fewer opportunities to change things. Romney is happy to see the clock run out.

Only one other candidate is above 5% now. Newt Gingrich has risen to 8%. Previously, Gingrich had tended to trade at 1-3%. Gingrich's modest rise in the national primary polls is responsible for the change. Gingrich is actually now beating Herman Cain in the Intrade odds. This is interesting because Cain is doing much, much better in the polls than Gingrich or Perry. Indeed, Cain is ahead of Romney in many polls. It's apparent that Intrade investors are willing to look far beyond today's poll numbers--at least where Cain is concerned. As Elephant Watcher has repeated over the months, Intrade investors tend to view politics from an establishment perspective. Cain is an outsider to say the least, so Intrade investors put little stock in him. But Cain was trading a bit higher before the sexual harassment scandal hit the headlines. Cain fell to 4.7% by this morning, and after news broke of another accuser against Cain, he quickly fell to 2.4%.

Meanwhile, Intrade investors are fairly bullish about Romney's chance to win the Iowa Caucus. They give him a 40% chance of doing so, while Cain registers 17.5% and Perry is at 12.5%. Once again, the investors are looking beyond the poll numbers to give Romney such an advantage over Cain. Naturally, if they believe Romney has a 40% chance of winning Iowa, he dominates in the overall odds of winning the nomination.

In the market on the New Hampshire Primary, Intrade investors rate Romney at about 90% to win. That's a fairly straightforward reading of the New Hampshire Primary polls, all of which have Romney in the lead by a comfortable margin. Meanwhile, the markets for the South Carolina and Florida primaries have Romney in first at 50% each. Romney should be weaker in South Carolina than in Florida, especially given Romney's odds of winning the overall nomination, so that points to some market inefficiency in the Florida market.

In summary, Intrade investors are dismissive of Cain's good poll numbers and are very skeptical about his candidacy. They essentially mirror Elephant Watcher's calculation of Romney and Cain's odds of winning the Republican 2012 nomination. The race isn't over, but the end is near.