An anonymous Intrade investor poured hundreds of thousands of dollars into McCain futures, inflating the market’s prediction that Sen. McCain would win the presidency, an internal Intrade investigation has revealed.
The unusual trades drove down Intrade’s odds of an Obama victory by as much as 10 percent “for more than a month,” CQ Politics reports.
Justin Wolfers blogged here about the squirrelly movement in the McCain market when it was first noticed earlier this month.
The trades were totally legal under Intrade rules. Will market manipulation for political candidates become the norm as ever-wealthier campaigns try to control the news cycle?
and 
. You can also watch it on 
MikeM is right that it wouldn’t be cost-effective to lay off an employee that’s anything like a right employee. On the other hand, delaying a new hire a little bit might be worthwhile. On yet another hand, though, hires late in the calendar year are low anyways (as there are already incentives to push the hire to the new year) so the effect would be likely pretty small or short term. There’d probably have to be some kind of clauses designed to limit gaming the system. Maybe instead of comparing employee numbers at single dates, comparing some kind of average counts and average hires/layoffs. Some kind of method to avoid pumping up the numbers with temp hires (e.g. 4th quarter retail hires). The best way would be to use year-to-year data, but that makes the first year implementation problematic.
Seems to me that Intrade numbers are really only covered in the political geek pages. These are the sources read by people who mostly have made up their mind. I don’t see that Intrade numbers could be said to win news cycles, let alone sway votes.
Somebody’s wasting their money.
And we wonder why America, while still better than any alternative, is going to hell in a handbasket. Maybe there never was a time when politicians debated the issues (not their pie in the sky solutions to spend more of our money) and citizens carefully considered the options, but for heaven’s sake what a nation of idiots we have become.
If I knew this earlier, I would have gone to Intrade and bet on Obama. Now I, and others, know for next time. So in 2012, it’ll take a lot more than “hundreds of thousands” to manipulate the market odds.
The problem is simply that the Intrade market was, at this time, too small. If it were legal and more widely discussed, this never would have happened.
Also, it seems to me that the nice thing about spending money to manipulate the market, instead of buying advertising, is that the money spent simply goes to other bettors. If you spend the same money advertising, it goes to buy (and use up) a lot more resources.
It is interesting that even today Intrade’s prices remain biased towards McCain. Betfair has had Obama at 88% all day while Intrade’s price has just moved from 84% to 85%. If the anonymous trader wasn’t breaking the rules I would assume that they are still trading?
Re: Nigel/14: Why isn’t this an arbitrage opportunity? Why hasn’t someone sold Obama on Betfair and bought him on Intrade? Are the commissions that high?
Murdoch was gonna do this before he decided instead to buy the wall street journal- same effect, different venue