Think Barack Obama Is Going To Be The Next President? Wanna Make A Bet?

If you are so confident that your candidate—be it Barack Obama, Hillary Clinton, Ron Paul or John McCain—will become the next President of the United States, then why don’t you put your money where your mouth is? To show just how far the free market has come, there is now a website that allows you to make money by betting on the outcome of world events from the U.S. presidential race to whether or not Venezuela or Ecuador will declare war on Colombia. The company, which operates out of Ireland, is called Intrade. The website offers a trading platform similar to the U.S. stock exchange, but traders on Intrade buy and sell options on things most people might consider a bit out of the ordinary.

Investors who consider placing bets on Intrade should keep in mind that Intrade is still a small marketplace. This means that positions can be volatile and may be difficult to close out of. Therefore, Intrade should not make up a large portion of an investment portfolio, and should probably be viewed more in terms of entertainment than an actual investment.

Smart investors may be able to profit from some of the holes in the Intrade system and capitalize on the small marketplace. According to an article by The New York Times, a professional poker player named Serge Ravitch made a 35 percent return on his money in just 6 weeks by identifying these weaknesses. One trade he took advantage of was based on the Republican Presidential nomination, which more than 10 percent of traders on Intrade thought would go to Ron Paul. No one in the Republican Party—or any party for that matter—was giving Ron Paul a prayer to win the nomination. Because of the market’s small size, the diehard supporters of Ron Paul raised the percentages in his favor higher than they really should have been.

For other events, Intrade’s predictions have proven surprisingly accurate. The following is a quote from The New York Times article:

“In 2004, President Bush won every state in which Intrade’s contracts—as of the night before Election Day—gave him a better than 50 percent chance of winning. He lost every state where the traders thought Mr. Kerry was the favorite. Late on election night in 2006, while the talking heads on CNN and MSNBC were still saying that the Republicans would hold onto the Senate, Intrade knew better.”

Investors should take caution when making bets on Intrade, and not invest too much at this point. If nothing else, Intrade could prove to be a source of entertainment for investors who want to see if they can outsmart the public. For those investors who want the entertainment value without putting up real money, Intrade also offers play money accounts for free.

As Obama And Clinton Fight, McCain Is Closing In On Presidency

There have been some interesting turns of events in the Presidential race. Last month, Barack Obama enjoyed a huge lead over Hillary Clinton, and was largely favored to win over John McCain. Obama is now only slightly ahead of Clinton, and the margin seems to be getting tighter. Even worse for the Democratic Party, the new Reuters/Zogby poll released on Wednesday shows that McCain is now favored over Obama.

The problems began for the Democrats for two main reasons: 1) McCain clinched the Republican nomination early on, and has been able to focus his full efforts on the race for the Presidency. 2) Tactics and arguments have gotten dirty between the two Democratic nominees. Clinton especially has bombarded Obama with attacks in an effort to expose alleged weaknesses.

Whether or not the attacks on Obama are warranted, they have changed public opinion. If nothing else, they have worked to cast doubt in voters’ minds about the chances of Obama to win against McCain. During the Republican primaries, McCain’s biggest problem was fundraising, and his early victory has aided him greatly. Not only was he able to conserve funds, but his clear nomination allows him an advantage in raising additional funds going forward.

Results differ greatly from poll to poll, and many voters don’t really decide until the very end, so no poll will be perfectly accurate. Democrats probably shouldn’t worry about the Reuters/Zogby poll at this point, but they should be aware that the longer the battle for the Democratic nomination draws out, and the more intra-party fighting goes on, the more advantage McCain will gain.

Summary of Barack Obama, Hillary Clinton and John McCain Tax Policy

I came across an article today by Jeremy Siegel on Yahoo Finance that gives a nice summary of each Presidential candidate’s tax policy. I will attempt to summarize the summary.

Barack Obama

Obama wants to increase the dividend and capital gains tax rate to 24 percent. At the same time, Obama recognizes the power of start-up companies to create jobs, and wants to eliminate capital gains tax on them. Obama would also like to raise the top income tax bracket to a 39.6 percent tax rate.

Hillary Clinton

Clinton is essentially advocating for the same rates as when her husband was in office, before the Bush tax cuts. That would mean capital gains taxes would be raised to 20 percent from their current 15 percent rate, and dividend income would be taxed at a maximum 35 percent. Clinton also supports a raise in the upper tax bracket rate to 39.6 percent, same as Obama.

John McCain

McCain wants to keep the current tax rates, but Siegel points out that he may not be able to. The Bush tax cuts are set to expire in 2011, and taxes will revert to pre-Bush rates if the cuts are not re-approved. Seeing as the Democrats strongly oppose the Bush cuts, and that they are likely to control Congress, McCain could have a difficult time getting the necessary laws passed. It should be noted that McCain and several other Republicans voted against making the Bush tax cuts permanent, which is why Bush had to settle for a test run of the current rates.

Barack Obama Is Taking Shots From The Left And The Right

Barack Obama is getting attacked from all sides now, and it appears that no place is safe for him. On the left he is being attacked by Hillary Clinton, with accusations of plagiarism among other things. On the right he is being bombarded by supporters of John McCain, who are setting him up as a supporter of terrorists. I sincerely feel bad for the guy right now.

I’m not a big supporter of Obama, but I’m also not a supporter of low blows (I don’t support Obama because of his huge spending proposals and other polices, not personal issues). The latest blow coming from McCain supporters at a recent rally was especially distasteful. There the speaker who introduced Obama repeatedly called out his full name Barack Hussein Obama, and suggested that he was being friendly with our terrorist enemies. I was upset with Clinton’s plagiarism accusations, but this is 100 times worse. It would be one thing if they had proof that he is working with terrorists. But to accuse him of what amounts to treason just because the guy was born into a Muslim family (although it is debated whether they were even practicing) and has the middle name Hussein...give me a break. Not that religion even matters, but they guy is a renowned Christian now, not Muslim. All this does is make the McCain campaign look like an ignorant bunch of bigots, which is not exactly the image one wants to portray in a campaign.

To his credit, McCain did repeatedly apologize for the remarks made by his supporters, and he said that he expects that it won’t happen again. I certainly hope that is the case.

In every election, things eventually turn nasty, and it has been one of the biggest turn-offs to me for politics. For once, I would like to see the candidates fight a nice, clean fight and stick to the issues. If you have a problem with a candidate’s proposals...great, let’s debate them. Topics involving religion, race, and family...lets keep those out of it. Here’s hoping for a good clean Presidential race, whichever candidates it may involve.