Stupid Millionaire Lost Millions Betting On Mitt Romney On Intrade

A new study reveals that a single trader may have been responsible for making the race seem closer than it really was in the final stretch to Election Day.


Actual audio of a Mitt Romney campaign speech during 2012 election.

A single trader lost millions betting on Mitt Romney on Intrade late in the 2012 Election, apparently trying to manipulate Intrade data to favor Mitt Romney, making the race seem closer than it really was in the final stretch to Election Day:

WSJ
:

"A new academic paper digging into presidential betting in the final weeks of the 2012 election finds that a single trader lost between $4 million and $7 million placing a flurry of Intrade bets on Mitt Romney—perhaps to make the Republican nominee’s chance of victory appear brighter.

Two economists who studied the data offer various rationales for the trader’s aggressive wagering on Mr. Romney in the final two weeks of the campaign. The anonymous trader placed 1.2 million pro-Romney contracts, some of which were actually in the form of bets against a Barack Obama victory.

The most plausible reason for the betting, the authors conclude, is that “this trader could have been attempting to manipulate beliefs about the odds of victory in an attempt to boost fundraising, campaign morale, and turnout.”

The economists, Rajiv Sethi, of Barnard College and Columbia University, and David Rothschild, of Microsoft Research, also analyze the possibility that the trader, who accounted for a third of all the money wagered on Mr. Romney in the last two weeks, could have placed his bets either to hedge on wagers in other markets or simply because he thought the price was good."

Intrade is an online exchange where members make bets on events, notably presidential elections, and is closely watched by political insiders to determine the strength of a candidate. Intrade was thrust into the political spotlight in 2008 when it correctly predicted the outcome of the presidential election.

In the the case of this trader during the 2012 elections, bets were placed solely on Romney and constantly sold on Obama, losing about $4 million in the process.

So...who do you think the stupid millionaire is? Donald Trump? Romney? Or was it just pocket change from the Koch Brothers?

Full report available here.

About Diane Sweet

Diane Sweet's picture
Senior Editor, Lives in a gerrymandered district in Michigan.

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