Aragorn Casts Down Saruman!

The Return of the King opened early in the US, as we strain (unsuccessfully) to keep perspective on the news of Saddam's cowardly surrender.

Now, was this capture a surprise? Last summer, the blogosphere mooted the merits of a Futures on Terror. One of the active markets mentioned was a British online betting service called "TradeSports", which offers propositions on sports, politics, and current events.

It should be emphasized that participants in these markets are informed (or not) outsiders, not the insiders as contemplated by the designers of the Futures on terror. However, their cumulative betting decisions should reflect some rough consensus of informed observers.

There were contracts available to speculate on whether Saddam Hussein would be captured by a certain date (Dec 31, 2003, and Jan, Mar, and June 2004). The December contract had two weeks to run, and last traded, prior to the news of his capture, at a price reflecting a 3% probability that Saddam would be captured by year end.

The March 2004 contract had shown desultory trading reflecting a probabilty of roughly 20% that Saddam would be captured by March 31, 2004.

Based on either of these contracts, I would say that outside observers were surprised by the news.

Now, what about the effect on the Presidential election? Here, the reaction was muted. Prior to the news, the probability that President Bush would be re-elected was trading at rough 66%. This has been reasonably stable - for example, during the summer, as the President's poll number declined, this probability dropped from the mid 60's to about 58%.

In the initial flurry after the announcment, the probability of Bush re-election was traded up to 71%. However, it seems to have stabilized at about 69%. A modest uptick, but hardly a radical re-evaluation of the President's prospects.

MORE: Quirky and interesting angles from Mickey. He offers "A special award to the first reporter or commentator who argues this is actually good news for Howard Dean."

He picks James Taranto of the WSJ, with respct to the nomination. Mr. Taranto's theme - Dems will figure Bush is now unbeatable, and quit toying with electable but uninspiring centrists like Gen. Clark. Better to lose on your feet than die on your knees!

Well, I nominate Chris Matthews, who speculated that the media coverage of this capture will drown out the attempts of the trailing Dems to be heard, thereby freezing the nomination race. I believe a panelist pointed out the the nation is not exactly riveted on the pronouncements of the various candidates during the holiday season in any case.

Comments

[Emma]

First things first: you need a close itals there somewhere.

Now, about politics. Finding Saddam may have a modest effect on the Dem primaries, but it happened so early it will certainly not effect the general election. If Iraq is in great shape, having found Saddam might polish the apple. If it's horrible shape or similar shape, there will be no effect.

[HH]

Well, I think I fixed the comments anyway.

[HH]

The trial of Saddam could have an enormous effect on the general election... it is also considerably more difficult to repeat the "miserable failure" mantra as well.

[TM]

I agree with Emma - eventually, Bush needs to show progress towards a stable (and democratic) Iraq. Presumably, capturing Saddam makes the attainment of that objective more probable, so it is "bad news" for Bush's opponents in that sense. However, if Iraq is a mess next fall, Saddam will be of limited relevance.

Hmm, that was my cocktail party wisdom on Sunday night, and it is exactly what she said. Alarming.

[Emma]

We are each other's evil twins.