UPDATE: Oops. As you see, New Hampshire shuffled the market yet again...
Barack Obama has taken a commanding lead in trading on the Iowa Electronic Markets (IEM) following his caucus win. The Republican picture is more volatile, but John McCain is commanidng top dollar.
In the University of Iowa business school project, traders buy and sell contracts on political candidates using their own, real money. The IEM has been known for its accuracy in predicting general election outcomes.
Obama was trading at 70.1 cents at midnight, just as the returns from Dixville Notch and Hart's Location showed him winning the two tiny New Hampshire hamlets that traditionally vote at midnight on election day. That price is up from only 24 cents a week ago.
Hillary Clinton had held the Democratic market lead almost continuously since the market launched last March, peaking at 73.6 cents Oct. 17. A week ago Clinton was still a prohibitive favorite at 63.3 cents, but as of midnight her stock had dropped to 23.1 cents.
This echoes market behavior after the 2004 caucuses, when Howard Dean's stock plummeted after the third place finish and that speech, while John Kerry's price quickly shot up to the 90 cent zone. (Winning shares pay a dollar, while losing shared have roughly the value of the mark in Weimar Germany.)
Five different Republican stocks -- Rudy Giuliani, Fred Thompson, Mitt Romney, John McCain, and the generic "rest of field" -- have led the Republican market. Despite his minimal Iowa effort, the Survivor island dynamic of the GOP race had McCain in a tie with Romney just before the caucuses, and McCain took lead on caucus night.
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