Intrade - Obama's Re-election Chances Have Faded in Recent Months

According to online prediction market Intrade.com, President Barack Obama currently has less than a 50% chance of being re-elected in 2012. As it stands right now, the "Barack Obama to be re-elected President in 2012" contract is currently trading at $4.92/share. As the maximum value of the contract is $10, this means that Intrade.com traders are currently giving Obama a 49.2% chance of winning in 2012.

The contract, which touched a high of nearly $7 (70%) when Osama Bin Laden was killed, has been in freefall over the past couple of months. The contract started June at around $6.20 and fell steadily throughout the month. At the beginning of July, the value of the contract had dropped to $5.75 - by the end of July, it had fallen to around $5.50.

After the debt ceiling agreement was reached, the contract bounced slightly before resuming its downwards trend. S&P's downgrade of the US credit rating and subsequent market turmoil created more weakness in the contract, pushing it down below the $5.00 mark.

In short, a sub-$5 contract means that the traders on Intrade.com believe that Obama currently has a less than 50/50 chance of winning a second term in 2012.

In case you didn't know, Intrade.com is an online "prediction market" where people bet real money trying to predict the outcome of certain events. As mentioned, the "President Obama to be re-elected President in 2012" contract has a maximum value of $10. As you can guess, the contract has a minimum value of $0. If Obama is re-elected, then the contract will be worth $10. If Obama loses in 2012, then the contract will be worthless.

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According to Gallup.com, President Barack Obama currently has an approval rating of 41%.

The news flow in the country has been almost entirely negative as of late, and this has taken a toll on Obama's popularity rating (and re-election chances). Many Americans are still miffed over the way that the debt ceiling situation was handled. Many Americans are upset that the United States lost its AAA credit rating (at least according to S&P). On top of all of that, the US economy is currently in VERY real danger of sinking into a recession. The jobs just aren't there, and US consumers are tightening their pursestrings and shutting their wallets once again in anticipation of another economic storm.

Obama also has to deal with the emergence of Texas Gov. Rick Perry as a potential opponent in the 2012 Presidential election. Perry is likely to become the energizing and galvanizing force that Republican voters are looking for.

Source: Intrade.com

Filed under: General Knowledge

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