The current Intrade odds have Romney leading Gingrich by 43.5% to 36.0%. That 7.5% gap is only half as big as Romney's lead was the last time we checked, just over a week ago. About two weeks ago, Romney was leading by 36 points. Clearly, Intrade investors are becoming more willing to believe Gingrich's poll numbers are real (unlike Herman Cain's). The most recent drop also reflects the media narrative of the December 10th debate: Romney made a memorable gaffe with his $10,000 bet and Gingrich emerged unscathed. The narrative was essentially what Elephant Watcher predicted in the debate recap.
Nevertheless, despite all of the polls, Romney remains in the lead on Intrade. If Romney is unable to do any damage to Gingrich during the final pre-Iowa debate this week, we can expect that to change--Gingrich would likely tie Romney or surpass him if he does well.
Meanwhile, only two minor candidates register 3% or higher on the Intrade market: Jon Huntsman and Ron Paul. Huntsman, who was not invited to the December debates and who is inexplicably favored by Intrade investors (perhaps reflecting the establishment bias often found on Intrade), is still at 6.0%. Ron Paul, whose enthusiastic internet fans are willing to put down money for the cause, is at 7.6%.
In the Iowa Caucus Intrade market, Gingrich is well ahead of Romney, 55% to 11%. Paul has been climbing there as well, up to 24.8%. This is interesting because Paul's recent poll numbers in Iowa, though improved from his usual 10%, are equal or lesser to Romney's. Why such a difference in their Intrade odds, then? It's likely a result of the prevailing wisdom that the Iowa Caucus rewards candidates with enthusiasm on their side.
In New Hampshire, Romney remains a big favorite at 70%. Gingrich is similarly favored in South Carolina, at 70%. In the Florida market, Gingrich's edge has shrunk to 49% over Romney's 35%. The investors may believe that by the time Florida rolls around, something could arise that derails Gingrich's campaign.
