Recession Odds On Intrade Fall from 70% to 20.5%?
Not sure what's going on here, but the odds of a 2008 U.S. recession on Intrade.com just fell from 70% to 20.5%.
CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Thursday, April 17, 2008
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- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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7 Comments:
The factors that were leading people to believe there would be a recession [resets, foreclosures, etc] have been neutralized. As bad as things looked they never actually got as bad as feared.
So, if things seem stable and not getting worse, people are optimistic that things will get better soon.
Some [or maybe even many] firms are reporting some nice results.
Google took off like a rocket [in after hours trading] after releasing some solid results.
What are your thoughts and ideas?
Perhaps because the time that a recession might take hold is running out? As projected nearly a year ago....
It seems to be back at 70 percent.
http://www.intrade.com/partners.jsp?ZID=1375&AID=1&CID=2&page=trade&selConID=508654
However, I read that anywhere from 20 to 80 percent is the same as "Not Sure," while under 20 percent is a solid "NO" and over 80 percent is taken as a solid "yes."
It's still down at 20.5% for the closing price at 4/18/2008 at 7:05 a.m. EDT.
But the TED spread is rising again, indicating renewed strain within the financial system, not to mention the fact that housing prices continue to fall in the US. This In Trade result looks just goofy.
Barkley Rosser
Looks like an error:
Last Price: 20.5
Buy at: 70.3
Sell at: 65.3
The buy/sell just doesn't reflect the last price. Makes me think it must be a bug.
I think it's an interesting bet. However, if I could suggest a contract, I'd suggest something like "US recession + trough in March" or something like that. If people are so strong on recession, it would be interesting to see what the markets say about the length (or the breadth) of the decline.
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