Intrade has its strengths and weaknesses. I do not believe that these investors possess secret information that the rest of us do not have access to. However, in general, the investors do make good use of information available publicly to the rest of us. It is not as accurate in the short term as 538 by Nate Silver. Nate's work is awesome for elections that are about to take place. However, over the long term, it is not super reliable.
This is not due to any fault of Nate's, but by the very nature of the case. His model cannot or does not take into account the effects of weeks of heavy negative ads, even though we have seen its effects before. Polls and even better Nate's model are much more reliable in the short term if properly conducted because they are dealing directly with the question at hand. Of course, methodology, specifically predicting the composition of the electorate and the related question of live vs automated calls account for the divergence in results, outside of the margin of error. Now, in this primary, as is common, the more enthusiastic voters are most likely to show up at the polls. This is why , mostly, Rick Santorum is outperforming his numbers, unlike Mitt Romney. The polls that show a closer race and less of an edge for Rick Santorum are likely understating the enthusiasm gap and the edge that Rick Santorum has in that department. Currently, it is probable that the national polls that show the larger leads for Rick are at this moment in time more accurate. The same is true in Michigan and Ohio. Nate has commented that, at worst, Rick Santorum's numbers are holding firm. Newt Gingrich is very likely no matter the future negative ads to win Georgia by a large margin. Mitt Romney will only be marginally hurt by the revelations of the cochair of his AZ campaign. Mitt is probably still winning there. Nevertheless, if the election were held today, it is very probable that Mitt Romney would lose 3 of the 4 contests.
However, the Michigan primary is in 9 days, February 28, an eternity politically from now. So far , Mitt has not found an effective attack that can reduce Rick Santorum's numbers in Michigan. If Mitt Romney does indeed lose Michigan, and especially if he loses 3 of those 4 races, he will not be the Republican nominee for President. Right now, Intrade investors, despite the effectiveness of Mitt Romney's ads in previous contests, still make Rick Santorum to be the favorite in Michigan. The Intrade investors, therefore, quite logically, are making out a brokered convention to be an event with a 30% probability. The reason is quite obvious to all of us: even without Mitt Romney, the Republican establishment will never allow Rick Santorum to be their standard barrier. Many party insiders are elected Republican office holders who would be badly hurt if Rick Santorum is at the top of the ticket. As much as I wish Rick Santorum would be their nominee due to his fringe, marginal views, for that very reason, they will not allow Rick Santorum to be their nominee. The same holds true for Newt Gingrich. Nor would Ron Paul be allowed to serve as the standard bearer. This means a brokered convention is, IMO, close to a 50-50 probability of occurring.
Perhaps Mitt Romney will find an effective attack against Rick Santorum in Michigan and bring down Rick's numbers. However, he has not done that yet and he had better do it soon or he will not be the Republican nominee for President.
Nate's site is www.fivethirtyeight.com
Intrade is at www.intrade.com .
Have at it folks!