What a difference a year makes

July 2nd, 2014 at 9:00 am by David Farrar

labipredict

This graph shows the price/probability at iPredict of there being a Labour Prime Minister after the 2014 election.

As one can see Labour’s chances were above or around 50% during 2012. In 2013 they dropped slightly but remained between 40% and 50%. Then Labour changed leaders and their chances increased to 60%. But look at what has happened in the last nine months. It has been a huge collapse, and this month they dropped below 20% probability for the first time.

 

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The 71 electorates by iPredict

July 1st, 2014 at 11:00 am by David Farrar

ipredictelects

I’ve compiled this table showing the current probabilities on iPredict of each seat. This is reflecting the view of the market traders who are willing to put their own money behind what they think the result will be. A seat in bold indicates a prediction it will change hands.

So what are the seats, that iPredict traders think are most marginal.

  1. Port Hills is rated 50/50 between Nuk Korako and Ruth Dyson
  2. Jono Naylor is judged just ahead of Iain Lees-Galloway in Palmerston North,
  3. Clayton Cosgrive marginally ahead in Waimakariri
  4. Phil Twyford looks to have a fight on his hands in Te Atatu to hold off Alfred Ngaro
  5. Flavell in Waiariki is fighting for his seat, and the Maori Party’s existence
  6. Punters are only 60% certain that National will not throw East Coast Bays
  7. Stuart Nash is seen as two thirds likely to pick up Napier for Labour
  8. Damien O’Connor only two thirds likely to hold on in East Coast-Tasman
  9. Labour also two thirds likely to pick up Tamaki Makaurau
  10. Hamish McDouall seen as having around a one in four chance of winning Whangaui on his third attempt

So how about the other end. What are the safest seats for the major parties. National has nine seats rated over 95% safe and Labour five.

 

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iPredict on electorates

May 9th, 2014 at 3:00 pm by David Farrar

Just had a look at current iPredict prices and probabilities for electorate contests. Here’s what they are showing from most safe to most marginal.

  1. Bay of Plenty – 98.3% National hold
  2. Botany – 98.3% National hold
  3. Coromandel – 98.3% National hold
  4. North Shore – 98.3% National hold
  5. Mangere – 98.1% Labour hold
  6. Taranaki King-Country – 98.1% National hold
  7. Helensville – 98.0% National hold
  8. Christchurch East – 97.3% Labour hold
  9. Rimutaka – 97.3% Labour hold
  10. Waitaki – 97.3% National hold
  11. Whangarei – 96.3% national hold
  12. Tamaki – 95.8% National hold
  13. Mana – 95.3% Labour hold
  14. Manukau East – 95.3% Labour hold
  15. Northcote  - 95.3% National hold
  16. Nelson – 94.8% National hold
  17. Selwyn – 94.8% National hold
  18. Taupo – 94.8% National hold
  19. Clutha-Southland – 94.3% National hold
  20. Dunedin North – 94.3% Labour hold
  21. Kelston – 94.3% Labour win
  22. Rangitata – 94.3% National hold
  23. Rongotai – 94.3% Labour hold
  24. New Lynn – 93.7% Labour hold
  25. Te Tai Tonga – 93.7% Labour hold
  26. Ikaroa-Rawhiti – 93.1% Labour hold
  27. Tukituki – 93.1% National hold
  28. Hunua – 92.4% National hold
  29. Manurewa – 92.4% Labour hold
  30. Northland – 92.4% National hold
  31. Papakura – 92.4% National hold
  32. Whanganui – 92.4% National hold
  33. Hauraki-Waikato – 91.7% Labour hold
  34. New Plymouth – 91.7% National hold
  35. Wellington Central – 91.7% National Labour hold
  36. East Coast – 90.9% National hold
  37. Invercargill – 90.9% National hold
  38. Mt Albert – 90.9% Labour hold
  39. Mt Roskill – 90.9% Labour hold
  40. Rangitikei – 90.9% National hold
  41. Ilam – 90.0% National hold
  42. Kaikoura – 90.0% National hold
  43. Otaki – 90.0% National hold
  44. Wigram – 90.0% Labour hold
  45. Dunedin South – 89.1% Labour hold
  46. Rodney – 89.1% National hold
  47. Waikato – 89.1% National hold
  48. Auckland Central – 88.3% National hold
  49. Pakuranga – 88.1% National hold
  50. Tamaki Makaurau – 87.0% Labour win
  51. Hutt South – 85.8% Labour hold
  52. Palmerston North – 85.8% Labour hold
  53. Christchurch Central – 81.8% Labour win
  54. West Coast-Tasman – 81.8% Labour hold
  55. Maungakiekie – 80.2% National hold
  56. Tauranga – 80.2% National hold
  57. Te Tai Hauauru – 80.2% Labour win
  58. Te Tai Tokerau – 80.2% Mana hold
  59. Upper Harbour – 80.2% National win
  60. Hamilton East – 80.0% National hold
  61. Ohariu – 78.6% United hold
  62. Epsom 73.1% ACT hold
  63. Hamilton West – 73.1% National hold
  64. East Coast Bays – 71.7% National hold
  65. Rotorua – 71.1% National hold
  66. Wairarapa – 71.1% National hold
  67. Napier – 64.6% Labour win
  68. Te Atatu – 59.9% Labour hold
  69. Waiariki – 59.9% Maori Party hold
  70. Port Hills - 59.8% Labour hold
  71. Waimakariri – 52.5% Labour win
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Strike Three

March 5th, 2014 at 7:00 am by David Farrar

Vernon Small writes at Stuff:

Three months and three gaffes.

It is an understatement to say it has not been the greatest start to election year for Labour leader David Cunliffe.

The slip over the baby bonus, by failing to disclose in his speech that it would not be paid on top of parental leave, took much of the wind out of his January sails.

It also deflected attention from a $500 million spending pledge that Labour had hoped would set the agenda.

No sooner was the House back in February than the $2.5m property-owning man was attacking Prime Minister John Key for living in a leafy suburb and defining his own mansion as a doer-upper and his own situation as middle of the road.

The climb-down came at the weekend.

This morning he has admitted it had been wrong to set up a trust for donations to his leadership bid. (If the cost was about $20,000 for his leadership campaign, why seek donations at all?)

That from a man and a party that has attacked National’s old habit of funneling donations through entities like the Waitemata Trust and joined in the condemnation of Finance Minister Bill English using a trust structure for his Wellington pile.

Cue, too, unwelcome echoes of former Labour leader David Shearer’s memory lapse over his undeclared United States bank account.

One gaffe might be unfortunate, two careless.

Three in three months is bordering on accident-prone.

Making Shearer look like a safe pair of hands.

Kiwi Poll Guy looks at what has been happening on iPredict:

iPredict is running a contract on National winning the 2014 election.  It was originally launched on 26 October 2011, a month before the 2011 General Election, and has been floating around between $0.40 and $0.60 since then.  It’s only in the last month that the stock has moved significantly beyond $0.60, so it’s worth taking a quick look.  Full trade history is taken from Luke Howison’s excellent API interface for iPredict, and then tweaked with a bit of Excel.

As shown in the graph below, the increase in price since has been pretty constant since it was trading at about $0.45 in October 2013, about a month or so after David Cunliffe was elected leader of the Labour Party.  The average daily price hasn’t dropped below $0.60 since 8 February 2014.

And last night was at 68.5%. In four months the probability of National winning the election has increased by over 20%. That is a huge movement, and while some of it is related to the economy and National’s improved performance, a fair bit must be about Labour not looking anywhere near ready to govern.

The Dom Post editorial:

David Cunliffe has made a hash of the donations issue. He was slow to admit that he used a trust to hide those who gave to his campaign for the Labour leadership.

He was slow to admit that this was problematic. Now he says he doesn’t think ”in hindsight” the trust ”fully represents the values” he wants to bring to the job of Labour leader.

These are awkward phrases which reveal a deeper conflict. The brutal truth is that hiding the donations inside a trust opens Mr Cunliffe to charges of hypocrisy. This is partly because he belonged to the Labour-led government which specifically outlawed the use of trusts to hide political donations. And hiding election donations is against basic principles of openness.

Now he has disclosed the names of three donors but not of others who he says required anonymity. You would think this kind of thing would have set off alarm bells for an aspiring Opposition leader. Hadn’t he heard the fuss caused by other ”anonymous political donations?”

This is what astonished me – that it never rang alarm bells for him, or any of his team. How could anyone in Labour think a secret trust was a good idea after they spent the last decade railing against them. Cunliffe and Presland had both railed against them personally. Either they’e incredibly stupid or their previous opposition to secret trusts was fake – they’re only against other people having one.

The Labour leader got into a similar pickle when he attacked Prime Minister John Key for living in a big house in a wealthy suburb. So does Mr Cunliffe, and once again the critics called him a hypocrite. It didn’t help that he then blustered about his house being a ”do-upper”, the worst house in the (very expensive) street.

This cuts no ice at all. Most voters see little difference between Mr Cunliffe’s $2.5m house in Herne Bay and John Key’s $10m house in Parnell. Both are by ordinary standards opulent homes owned by obviously wealthy people. Mr Cunliffe made an ass of himself by posing as the champion of the proletariat against the toff.

He needs to decide who he really is and what he stands for.

Here’s the trouble. If you need to “decide”, then it isn’t real.

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The market backing Robertson

December 7th, 2011 at 9:00 am by David Farrar

The latest prices on iPredict for the Labour leadership and the next PM continue to intrigue.

David Shearer is at 70.4% to become the Labour leader. The stock on whether the PM after the 2014 election will be Labour is 52%, so if you multiply them together the chance Shearer will become PM should be 36.6%. However the price for Shearer to become PM is 29.6c or 29.6% which suggests that the market thinks Shearer becoming leader is a negative for Labour winning in 2014 by 7.0%.

But Cunliffe has the same issue. His leader stock is 28.2% suggesting his PM stock should be 14.7%. But in fact it is 7.4%, which suggests that Cunliffe as leader damages Labour chances by 7.3% – much the same as for Shearer.

So how is this possible? Well the answer is that despite not being a candidate for this leadership ballot, Grant Robertson is at 5.7% to be PM after the election. As the price for a Labour victory is 52% this suggests that the market thinks there is an 11% chance Grant will roll whomever gets elected Leader before the 2014 election.

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iPredict on Labour Leader and PM

December 1st, 2011 at 4:12 pm by David Farrar

Analysing the prices of the stocks for the next Labour Leader, and for being PM before 2015 shows us some fascinating insights into how the market views the electability of the various candidates.

The market says there is currently a 55% chance of Labour winning the 2014 election. So in theory the odds of a Labour contender becoming PM by 2015 should be the probability of them winning the Labour Leadership x 55%. But let us look at the actual prices.

David Shearer is at 34.0% for the leadership. This means his PM price should be 18.7%. However it is at 23.2% which indicates the market thinks Labour has a better chance of beating National in 2014 if he is Leader.

David Cunliffe is at 38.5% for the leadership. This means his PM price should be 21.2%. However it is at 14.0% which indicates the market thinks Labour has a worse chance of beating National in 2014 if he is Leader.

David Parker is at 31.0% for the leadership. This means his PM price should be 17.1%. However it is at 7.8% which indicates the market thinks Labour has a much worse chance of beating National in 2014 if he is Leader.

Grant Robertson is at 1.7% for the leadership. This means his PM price should be 0.9%. However it is at 9.4% which was initially a mystery to me. The only way to reconcile his far far higher price for being PM by 2015 than being the next Labour Party Leader, is that the market thinks there is a significant chance that Robertson will roll whomever is elected Leader before the next election, and that Robertson will then become Prime Minister after the 2014 election.

So the market thinks Labour is most likely to win if David Shearer is elected Leader, and if Cunliffe or Parker is elected Leader, they are more likely to lose or be rolled by Robertson before the 2014 election – which Labour is favoured to then win.

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A minor skite

November 28th, 2011 at 11:28 am by David Farrar

In 2008 the day before the election I was drinking in Auckland with Matt McCarten and Chris Trotter and half the UNITE union. We had a sweepstake on the election results, and I am pleased to say I won it!

In 2011 the day before the election I was drinking in Wellington with Mark Unsworth and various associates of Saunders Unsworth. Again there was an results sweepstake, and I am pleased to say again I won it. My predictions for seats for the four main parties was:

  • National 60 (got 60)
  • Labour 35 (got 34)
  • Greens 13 (got 13)
  • NZ First 7 (got 8 )

I also earlier this year won the hotly contested (100 or so participants) Saunders Unsworth Super 15 rugby sweeps, picking the positions of the teams closest each week. That one I am very proud of, as polls don’t help much when it comes to rugby!

Combine that with a wonderful series of payouts on iPredict based on the election results (I’ll blog in detail once we have final results, but let’s just say I am a very happy chap) and overall a good year. I am thinking of starting up an astrology and fortune telling business on the side :-)

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A new iPredict stock

November 20th, 2011 at 11:36 am by David Farrar

iPredict have launched a new stock. It is will Labour’s party vote be 10% or greater than the Greens. They explain:

This contract pays $1 if the Labour party vote exceeds the Green party vote by at least 10% of the total party vote. For example, this contract will pay $1 if Labour and Greens receive 24% and 13% of the party vote, respectively, and will pay $0 if Labour and Greens receive 23% and 14% of the party vote, respectively.

Labour are down at 24.5% in the Roy Morgan poll and so the Greens only need another 1.5% for the stock to pay out $1.

They have also launched stocks on whether the gap will be over 12.5% and 15.0%.

 

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Who will govern after 2014?

October 26th, 2011 at 12:30 pm by David Farrar

iPredict has just launched stocks on which party’s leader will be Prime Minister after the 2014 election – National or Labour?

These stocks do not assume the result of the 2011 election. If people say National after 2014, then that could either be a 3rd term for National or it could be Labour win in 2011 and then National come back in 2014.

Currently the stocks sit at 69% for National and 32% for Labour, so National are seen at this stage to be twice as likely to win in 2014, than Labour.

What will be fascinating to see if how these stocks change over time, and especially how the actual 2011 election results affects these 2014 stocks.

When you consider the cost of capital, the market seems quite optimistic that National will govern after the 2014 election. Say you have $69 to invest. If you stuck it in a term deposit for three years at 6% then in three years you would have $82. If you stick it in iPredict and National wins in 2014, you would have $100. So in reality the market is saying they think National has around a 82% chance of winning in 2014. That seems a bit over-priced for me, but I amsure the price will vary a lot over the next three years.

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iPredict Election Update #48: Labour Government Possible?

October 21st, 2011 at 12:18 am by Kokila Patel

Key Points:

* Growth and current account forecasts slip
* Epsom now marginal, making a Phil Goff-led government more plausible, even without Hone Harawira
* National’s Simon O’Connor tipped for Tamaki
* Greens still riding the crest of Rena’s waves while National and Labour sink
* Alan Bollard now expected to increase OCR in March 2012
* Fonterra’s forecast 2011/12 payout increases slightly

Commentary:

Act’s chances in Epsom have dropped to marginal levels, making it just possible that Phil Goff could be our next Prime Minister, according to this week’s snapshot by New Zealand’s online prediction market, iPredict. With John Banks hovering at just over 50% chance of winning Epsom, and New Zealand First nearing MMP’s 5% threshold, a Phil Goff-led government isn’t out of the question. The stocks on National’s Tamaki selection suggest that Simon O’Connor is most likely to be the party’s candidate, while the Greens are still predicted to get a record 14 MPs. In economics, Reserve Bank Governor Alan Bollard is now expected to raise the OCR in March 2012, GDP and Current Account forecasts have worsened, while Fonterra’s forecast 2011/12 payout has increased slightly.

(more…)

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iPredict Weekly Update #47: Rena Hurts Nats

October 14th, 2011 at 10:38 pm by Kokila Patel

Key Points:

* Rena disaster may cost National 5 MPs and a reduced majority in Bay of Plenty
* Greens up for fifth week in a row with 14 MPs now expected
* Labour back above 30% and Damien O’Connor ahead in West Coast-Tasman
* Act weakens in Epsom while Sharples’ hold on Tamaki-Makaurau strengthens
* National could govern with Greens, Act or Maori Party
* Alan Bollard now expected to hold off OCR increase till April 2012
* Macroeconomic indicators remain steady
* Fonterra’s forecast 2011/12 payout falls slightly

Commentary:

The Rena grounding has hurt National and helped Labour and the Greens, iPredict’s first weekly snapshot since the disaster suggests. According to the online predictions market with its 5000 registered traders, National’s forecast party vote has plunged from 50% last week to just 46% this week, potentially costing it five MPs compared with last week, while its Bay of Plenty MP, Tony Ryall, is now expected to suffer a reduced majority. Labour is up from 28.5% to 31.0%, which would give them 39 MPs, while the Greens are also big winners from the disaster, increasing their forecast party vote for the fifth week in a row to 11.1% which would deliver them 14 MPs. In economics, Reserve Bank Governor Alan Bollard is now expected to hold off a rise in the OCR till April 2012, while most other economic indicators (GDP Growth, Unemployment, Inflation, and Current Account Deficit) have remained steady.

(more…)

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iPredict Election Update #46: Labour’s prospects better than in TV polls

October 3rd, 2011 at 2:19 pm by Kokila Patel

Key Points:

* iPredict’s forecasts better for Labour than TV polls
* Greens again at an all time high and National still at 50%
* Labour attacks on Mad Butcher may have cost Damien O’Connor his seat
* David Cunliffe’s New Lynn majority expected to be slashed
* Government more vulnerable on Video Camera Surveillance (Temporary Measures) Bill
* Inflation, growth, and unemployment figures remain steady
* OCR to increase in March but second rise not expected until June

Commentary:

This week’s snapshot from New Zealand’s online predictions market, iPredict, forecasts an election-night gap between National and Labour much narrower than that suggested by the average of this weekend’s TVNZ and TV3 polls. While the average of the TV polls suggests National will win 56.7% of the party vote and Labour 27.8% – a gap of 28.9% – iPredict is forecasting a National party vote of only 50.0%, with Labour winning 28.5%, a gap of just 21.5%. The Greens have built further on last week’s all-time iPredict high, with their forecast party vote reaching 10.7%. In electorate contests, Labour’s electorate-only Damien O’Connor now risks leaving Parliament, with his chances in West Coast-Tasman deteriorating to just 45%. In economics, Fonterra’s payout predictions have deteriorated slightly, while inflation, growth, and unemployment figures remain steady. The OCR is expected to be increased in March but a second rise, to 3.00%, is not expected until June.

(more…)

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iPredict Election Update #45: Nats above 50%

September 29th, 2011 at 10:25 pm by Kokila Patel

Key Points:

* National hits 50% and Greens above 10%
* Brash now most vulnerable party leader
* Video Camera Surveillance (Temporary Measures) Bill to be passed
* Inflation and growth figures deteriorate
* Unemployment and OCR figures remain steady
* Fonterra payout predictions improve

Commentary:

National and the Greens are at record-breaking highs, while Labour and Act are at record-breaking lows, according to this week’s snapshot from New Zealand’s prediction market, iPredict. National’s forecast party vote has reached 50.0%, and the Greens’ 10.3%, meaning 63 and 13 MPs respectively, while Labour have dropped to 28.1% and Act 2.0%, meaning just 36 and 3 MPs respectively. With the exception of Phil Goff’s Mt Roskill electorate, Labour is now expected to reduce its majorities in all of the electorates iPredict measures In economics, inflation and growth figures worsen, while unemployment and the OCR remain unchanged, the Fonterra Payout for 2011/12 has improved slightly.

(more…)

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iPredict Election Update #44: Nats could govern alone

September 19th, 2011 at 10:31 pm by Kokila Patel

Key Points:

* National at record high, expected to govern alone
* Dr Pita Sharples now predicting to re-take Tamaki-Makaurau
* Trevor Mallard expected to increase majority in Hutt South while Clare Curran’s majority in Dunedin South expected to fall
* Inflation, current account deficit, unemployment, OCR and future Fonterra payout forecasts all down this week

Commentary:

Following last week’s World Cup wobble, John Key’s National Government has recovered with its forecast party vote reaching a record reported high of 49.0%, this week’s snapshot from New Zealand’s prediction market, iPredict, suggests. Maori Party Co-Leader Dr Pita Sharples is now expected to retain Tamaki-Makaurau, although the gap with Labour’s Shane Jones remains narrow. Labour’s Trevor Mallard is expected to improve his majority in Hutt South while Labour’s Clare Curran is expected to reduce hers in Dunedin South. In economics, forecasts for inflation, the current account deficit, unemployment, the OCR and future Fonterra payouts have all fallen.

(more…)

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iPredict: National vote falls following World Cup wobbles

September 15th, 2011 at 9:14 pm by Kokila Patel

iPredict says:

* Forecast National Party vote slips following World Cup wobbles
* Simon Bridges expected to increase majority in Tauranga while Gerry Brownlee’s majority in Ilam expected to fall
* Gap narrows in Tamaki-Makaurau
* Mana predicted to have just one MP
* Unemployment and growth figures worsen
* Fonterra payout forecasts up

Commentary:

World Cup wobbles appear to have had an effect on John Key’s Government, with National’s forecast party vote share down from 48.0% to 46.5% and the probability Mr Key will be re-elected down from 94% to 93%, this week’s snapshot from New Zealand’s prediction market, iPredict, suggests. Labour’s Shane Jones is still expected to win Tamaki-Makaurau, although the gap to Maori Party Co-Leader Dr Pita Sharples has narrowed, while the Mana Party is now expected to only have one MP elected. In economics, short term forecasts for growth and unemployment have both worsened, while inflation and current account deficit forecasts remain largely unchanged. There has been an increase in Fonterra’s forecast payouts.

(more…)

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iPredict and Minor Parties

September 7th, 2011 at 2:00 pm by David Farrar

I am a fan of iPredict. I trust it because I think the fact that people have to put money up to back their beliefs, means that the wisdom of the crowds often wins out. If you think a market is wrongly priced, then you can make some money buying or selling some stock.

However there is a flaw in the way a few stocks operate. Not the binary stocks (x will happen by z date) but the party vote stocks. These are used to predict the a party’s vote percentage at the election.

VOTE.2011.NAT is currently at 47.5c. It will pay out 1c per 1% party vote, so it is predicting a party vote of 47.5%. Now let us say I genuinely think National will get 50% and I have $100 to spend. I buy $100 of shares at 47.5c, or 210 shares. And if I am right and National gets 50% I get 50c per share so get $105 back. Now as an investor a 5% return on capital doesn’t get me very excited, so you may have few investors in that market.

Now let’s say I am the National Party Campaign Chairman, Steven Joyce. Let’s say I don’t want National’s share price to be 47.5c as that may not be enough. Let’s say Steven decide to buy up VOTE.2011.NAT shares to 55c so there is a story about how the market thinks National will get 55%. Steven has a bit of money so spends $1,000 buying 1818 shares at 55c. Whenever the price drops below 55c he buys shares until he has spent his $1,000. Now if National really only gets 47.5% then Steven loses 7.5c a share or $136. So a 14% drop on his money.

Now if other investors out there think National is over-priced then they can move the price below 55c by selling the share, which is equivalent to buying the reverse. What it means is they pay 45c for their “reverse” share and when the stock closes they get $1 less the party vote share or $1 – 47.5c or 52.5c. So they could sell to Steven his 1818 shares for $818 and if National gets 47.5% will make $954.  That is $136 profit (made off Steven) and is a return on capital of 17%.

So for a major party like National the relative rate of returns are not far off – 14% for the person buyign at 55c and 17% for the person selling at 55c.

But now let us try this with say NZ First. You are the NZ First Campaign Chair and you want NZ First to show at over 5%. You have $1,000. You can buy 20,000 shares at 5c.  Now if NZ First actually get 4% then you have only lost $200.

Now what say you are an investor who thinks the correct share price is 4c. In theory you can make money by selling at 5c and buying at 4c when it closes. But you have to effectively buy the reverse share at 95c and sell at 96c.

Now to buy 20,000 shares at 95c will cost you $19,000. And the payout will be $19,200. You will get a miserly 1.1% return on your money. Would you want to lock up $19,000 for a 1.1% return? No.

So what is the moral of the story? When it comes to the minor party stocks, it is possible for supporters to push the share price up at almost no cost to them, but at a great cost for others to push it down. This only applies to the party vote stocks, not to all the binary stocks.

This is why NZ First often has a stock price over 5c indicating Winston will be back, while the binary stock of “Will Winston get back into Parliament is at 22c, indicating only a 22% chance.

Likewise I suggest the stock showing United Future will get 2.6% is also the result of party activists pushing it higher. The same for ACT at 4.0%.

As we get very very close to the election, this problem may sort itself out. When there are only a few days to go, then even a 1% return may be decent enough for people to push the stock prices down to what the true level would be.

iPredict can also probably avoid this issue in future by having the cost of buying minor party stock at 10c/% point instead of 1c/% point.

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iPredict Election Update #42

September 6th, 2011 at 6:57 pm by Kokila Patel

iPredict says:

*             National still on course to govern alone

*             Labour remains below 30%

*             Tamaki-Makaurau becoming too close to call

*             Economic indicators remain steady

*          Fonterra payout forecast to be $8.14 in 2010/11 and then fall within the $7-$8 range for the following four seasons

Commentary:

The race between Maori Party Co-Leader Dr Pita Sharples and Labour’s Shane Jones in Tamaki-Makaurau is rapidly becoming too close to call, this week’s snapshot from New Zealand’s prediction market, iPredict, suggests. Over the past two weeks, Dr Sharples’ probability of retaining the seat has increased from 42% to 47%, while Mr Jones’ probability of winning the seat has slipped from 55% to 50%. John Key’s National Party remains forecast to govern alone with 61MPs, while the Labour Party opposition continues to track below 30%. In commerce, key economic indicators (Fonterra payout, GDP, unemployment, inflation and OCR) have remained largely unchanged.

(more…)

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iPredict Election Update #41

September 1st, 2011 at 9:12 pm by Kokila Patel

iPredict says:

*             Twelve weeks before election, National forecast to govern alone

*             Greens support increases further

*             National strengthens hold on several marginal electorates

*             Shane Jones still ahead in Tamaki-Makaurau

*             Fonterra’s final 2010/11 payout forecast to be $8.15/kgMS

*             Economic indicators remain steady

Commentary:

Twelve weeks out from the general election, John Key’s National Party is forecast to govern alone, according to this week’s snapshot from New Zealand’s prediction market, iPredict.  National is now expected to hold 61 seats in a 120 seat Parliament and has strengthened its hold on several marginal electorates including Auckland Central, Maungakiekie, New Plymouth, Otaki and Tamaki.  For the third successive week, support for the Green Party has increased and it is now forecast to hold 11 seats after the election, up from 10 last week.  In economics, Fonterra’s final payout per kilogram of milk solids for the 2010/11 financial year (before retentions) is expected to be $8.15.  Key economic indicators (GDP, unemployment,  inflation and OCR) have remained broadly unchanged.

(more…)

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iPredict on dairy returns

August 26th, 2011 at 8:07 am by David Farrar

iPredict has announced:

iPredict’s first contracts forecasting Fonterra’s payout will be launched on the online predictions market at 3.30 pm today and will be available to its 5000 registered online traders plus everyone else who chooses to join up at www.ipredict.co.nz

The initial contracts will ask traders whether Fonterra’s final 2010/11 payout, per kilogram of milk solids, to a 100 percent share-backed farmer (before retentions), will be above $7.90, above $8.00, above $8.10, above $8.20 or above $8.30.  Traders can buy as many of each contract as they like.

On 24 May this year, Fonterra announced the 2010/11 payout was likely to be in the $8.00 to $8.10 range.

“This first set of contracts will give an indication of in which 10 cent increment the final payout is likely to fall,” the Chief Executive of iPredict, Matt Burgess said today.  “We will then add 2.5 cent increment contracts within the favoured 10 cent range to provide dairy farmers and the wider dairy community with an even more accurate forecast.  Forecasting this way will give both a real-time point estimate and a margin of error.”

The stocks went live on Wednesday. At present the stock for more than $8.125/kg is at 63c and more than $8.150/kg is 43c, so the market is pointing towards $8.13 to $8.15.

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iPredict Election Update #39

August 18th, 2011 at 9:38 pm by Kokila Patel

iPredict says:

Key Points:

*             National could govern with one partner

*             Maori Party gets stronger in key electorates

*             Key economic indicators remained largely unchanged

Commentary:

John Key’s National Party will be able to form a government with their choice of Act, the Maori Party or UnitedFuture, accordingto this week’s snapshot from New Zealand’s prediction market, iPredict.  The frontrunner in almost every electorate has also strengthened their position this week, with Dr Pita Sharples’ seat of Tamaki-Makaurau enjoying the most significant rise.  In economics, key indicators (GDP growth, unemployment, OCR, and Current Account Deficit) have all remained unchanged, with the exception being inflation which is now lower in the short-term than previously expected.

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Is Twyford in trouble?

August 17th, 2011 at 9:00 am by David Farrar

Matthew Hooton blogs at electionresults.co.nz:

As Ian Llewellyn has pointed out already, Mr Twyford has been at some risk in Te Atatu.  Since Ian wrote his piece a few weeks ago, things have got worse for Mr Twyford, with today’s trading having the probability of him winning now down to 72% from over 80% on 1 August.

To put that in context, iPredict is now saying that Te Atatu is the fourth most marginal seat in the country, after West Coast-Tasman, Tamaki Makarau and New Plymouth.

To put it even more in context, iPredict is saying that Mr Twyford has less chance of winning Te Atatu for Labour than Nathan Guy, Ms Kaye and Sam Lotu-Iiga have of winning the previously safe Labour seats of Otaki, Auckland Central and Maungakiekie for National.

This is disastrous for Labour, especially with Paula Bennett looking stronger than ever in Waitakere, and given the political importance of West Auckland.

Worse for Mr Twyford personally, party bosses have given him the insulting low ranking of 33 on Labour’s disgraceful, protect-all-the-losers listAs I discussed recently, this means that, if Mr Twyford loses to Mr Henare, he’s toast (while Mr Henare could expect to be rewarded with a return to Cabinet for such an historic win).

Keep in mind, of course, that Mr Twyford is still most likely to win Te Atatu.  But how extraordinary that a previously safe Labour seat is now grouped with the most marginal in the country.  It suggests Labour has terrible problems in West Auckland and perhaps suggest why John Key to remain prime minister is trading so incredibly high.

As Matthew says, Twyford remains the favourite to win in Te Atatu. But a market probability of 72% is significantly below most safe seats, and indicates that one or more people are willing to spend money on the basis Twyford may not win.

If people think Twyford is a sure bet, then they should buy up his stock and make some money. If you buy at 72% and he wins, you make a 39% return on investment in just four months, which is an annualised return of 119%. So is Twyford a safer bet than a finance company?

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iPredict Election Update #38

August 11th, 2011 at 9:41 pm by Kokila Patel

iPredict says:

Key Points:

*       Growth and unemployment expectations worsen after recent improvements

*       OCR increase now not expected until December

*       National strengthens; no longer needs Act

*       Notable movements in key electorate seats, including New Plymouth, Waitakere and Tamaki-Makaurau

*       NZ First falls below MMP’s 5% threshold

Commentary:

Growth expectations have fallen back again, this week’s snapshot from New Zealand’s prediction market, iPredict, suggests.  Consequently, the first increase to the OCR is now not forecast until December, with further increases now expected to be  less frequent than previously indicated. There is also a reduced likelihood that mortgage rates will pass 6.00% before the end of the year.  In politics, National’s position has strengthened, and John Key is expected to be able to govern with his choice of the Act Party, the Maori Party or UnitedFuture, or a combination of all three.  There has been significant movement in electorates, with Pita Sharples’ lead in Tamaki-Makaurau reduced by 14%, Jonathan Young’s hold on the New Plymouth electorate reduced by 10%, and Paula Bennett’s Waitakere electorate chances increasing by 18%.  New Zealand First has again fallen below MMP’s 5% threshold.

Economic Context

Expectations for GDP growth have diminished this week.  Growth is expected to be 0.7% for the June quarter (steady), 0.6% for the September quarter (down from 0.9% last week), 0.5% for the December quarter (down from 0.8% last week) and 0.6% for  the March 2012 quarter (steady).

Figures released last week show that the unemployment rate for the June quarter was 6.5%, largely in line with iPredict’s indication last week of 6.6%.  Forecast unemployment has deteriorated slightly for future quarters, with unemployment expected to be 6.4% for the September 2011 quarter (steady), 6.2% in the December 2011 quarter (up from 6.1% last week) and 6.2% in the March 2012 quarter (up from 6.1% last week).

Inflation expectations have remained largely unchanged.  Annual inflation is expected to be 5.0% in the September 2011 quarter (down from 5.1% last week), 2.9% in the December 2011 quarter (steady) and 2.6% in the March 2012 quarter (steady).

The market continues to indicate strongly that petrol prices will be capped at a maximum price of $2.30 this year.  The probability that unleaded petrol will exceed $2.30 per litre in 2011 is 19% (down from 22% last week), the probability it will exceed $2.40 per litre is 8% (down from 11% last week), and the probability it will go above $2.50 per litre is 8% (down from 10% last week).

The market now expects Reserve Bank Governor Alan Bollard to hold off an increase in the OCR until December, when it will rise to 2.75%, and then again in March 2012 to 3.00%, and in April to 3.25%.

The expected 90-day bank bill rate for 1 September 2011 is 2.91% (down from 3.05% last week) and for 1 December 2011 is 3.07% (down from 3.20% last week).

There is now a 68% probability that average floating-rate mortgages will reach 6.00% by the end of the year, down from a 93% probability last week, but just an 11% probability that they will reach 6.50% in 2011, down from 27% last week.

The market is indicating a Current Account deficit of 4.82% of GDP for the year to June 2011 (steady), 4.69% of GDP for the year to September 2011 (down from 4.71% last week), and 4.28% of GDP for the year to December 2011 (down from 4.30% last week).

Parties & Personnel 

All current leaders of parliamentary parties have at least a 91% probability of remaining in their positions until the election.  The most vulnerable is Labour Party leader Phil Goff, but with just a 9% probability of being replaced prior to the election (steady from last week).

Key Electorate Contests

Act has remained steady in Epsom this week with an 89% probability that the seat will be won by a candidate other than a National candidate or incumbent Act MP Rodney Hide.

In Ohariu, United Future’s Peter Dunne has also remained steady with a 73% probability of being re-elected.

New Zealand First is once again below MMP’s 5.0% threshold at 4.9% (down from 5.1% last week), with party leader Winston Peters having only a 22% probability of returning to Parliament (steady).

Expectations that Mana Party leader Hone Harawira will retain the Te Tai Tokerau seat in the General Election have improved slightly at 83% (up from 82% last week).

Expectations that Maori Party Co-Leader Pita Sharples is expected to retain Tamaki-Makaurau have reduced markedly from 66% last week, to 52% this week.  Co-Leader Tariana Turia is still expected to retain Te Tai Hauauru (79%, steady), and Te Ururoa Flavell is expected to retain Waiariki (73%, steady).

For the Labour Party, Nanaia Mahuta is expected to retain Hauraki-Waikato (78%, up from 76% last week) and Labour’s position in Ikaroa-Rawhiti (currently Parekura Horomira’s seat) has improved (76%, up from 72% last week)

Te Tai Tonga remains forecast to change hands, with a 76% probability it will be won by Labour’s Rino Tirikatene from the Maori Party’s Rahui Katene (up from 74% last week).

In marginal electorates other than those mentioned above, the probability National’s Jonathan Young will retain New Plymouth has fallen to 68% from 78% last week.  There is an 81% probability that National’s Nikki Kaye will retain Auckland Central (up from 76% last week).  The likelihood that National’s Paula Bennett will retain her Waitakere seat has improved markedly to 73% (up from 55% last week) and Labour’s Damien O’Connor is expected to win back West Coast-Tasman for Labour, but has lost some ground (52%, down from 58% last week).

With no changes to forecast winners in electorate seats over the last week, National continues to be expected to win 40 electorate seats, Labour 24, the Maori Party 3, and Act, United Future and the Mana Party 1 each.

Party Vote, Election Result and Alternative Scenarios

Forecast party vote shares are now: National 46.0% (up from 45.5% last week), Labour 30.6% (down from 31.9% last week), the Greens 7.0% (down from 7.3% last week), Act 5.5% (up from 5.0% last week), New Zealand First 4.9% (down from 5.1% last week), UnitedFuture 2.0% (up from 1.8% last week), the Maori Party 1.8% (steady), the Mana Party 1.7% (up from 1.4% last  week), the Conservative Party 0.7% (down from 1.1% last week), the New Citizen Party 0.4% (steady), and the proposed Reform New Zealand Party 0% (steady).

Based on this data, and the electorate results above, Parliament would be as follows: National 58 MPs, Labour 39 MPs, the Greens 9 MPs, Act 7 MPs, the Maori Party and UnitedFuture 3 MPs each, and the Mana Party 2 MPs.  There would be 121 MPs, requiring a government to have the support of 61 MPs on confidence and supply.  John Key’s National Party could govern with  the support of the Act Party, the Maori Party, or UnitedFuture.

Given New Zealand First’s proximity to MMP’s 5% threshold, iPredict has also analysed what might happen should New Zealand First win 5.0% of the vote.  Under this scenario, Parliament would be as follows: National 56 MPs, Labour 37 MPs, the  Greens 8 MPs, Act 7 MPs, New Zealand First 6 MPs, the Maori Party 3 MPs, UnitedFuture and the Mana Party 2 MPs each.  There would be 121 MPs, requiring a government to have the support of 61 MPs on confidence and supply.  John Key’s  National Party would require the support of either the Act Party or the Maori Party and UnitedFuture.

Overall the market indicates a 93% probability there will be a National Prime Minister after the election (up from 91% last week).

MMP Referendum and Miscellaneous

The probability New Zealanders will elect to retain the MMP voting system in the referendum to be held on Election Day is 83%, up from 78% last week.

iPredict is owned by Victoria University of Wellington.  Details on the company and its stocks can be found at www.ipredict.co.nz  The company is providing full election coverage this year, with contract bundles for the party vote and for every electorate race in the country now available for trading, along with other contract bundles on a wide range of economic, political and social issues.  The weekly political snapshot is taken at a random time each week to avoid market manipulation by political parties or activists.  This week’s was taken at 9:21 am today.

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iPredict Election Update #37

August 4th, 2011 at 11:10 pm by Kokila Patel

iPredict says:

Key Points:

* GDP growth expectations improve

* OCR expected to be increased in September and reach 3.75% in June 2012

* Floating mortgage rates strongly predicted to hit 6.00% in 2011

* New Zealand First still above MMP’s 5% threshold

* Despite NZ First, John Key’s National Party could govern with Act alone

Commentary:

GDP growth forecasts are up according to this week’s snapshot from New Zealand’s prediction market, iPredict. There is an expectation that the OCR will increase as early as September and more frequently than previously indicated; consequently, there is an increased likelihood that mortgage rates will reach at least 6.00% before the end of the year. In politics, New Zealand First remains above MMP’s 5% threshold, although its hold on this is tenuous, with the market also indicating only a 22% probability that Winston Peters will return to Parliament. Despite New Zealand First’s current forecast share of the party vote, John Key would still be able to form a Government with the support of the Act Party alone.

Economic Context

Expectations for GDP growth have improved this week. Growth is expected to be 0.7% for the June quarter (up from 0.6% last week), 0.9% for the September quarter (up from 0.8% last week), 0.8% for the December quarter (up from 0.7% last week) and 0.6% for the March 2012 quarter (steady).

Forecast unemployment has deteriorated in the short term, but there is improvement predicted in the medium term. Unemployment is expected to be 6.6% in the June 2011 quarter (up from 6.4% last week), 6.4% for the September 2011 quarter (steady), 6.1% in the December 2011 quarter (steady) and 6.1% in the March 2012 quarter (down from 6.2% last week).

Inflation expectations have remained steady. Annual inflation is expected to be 5.1% in the September 2011 quarter, 2.9% in the December 2011 quarter, and 2.6% in the March 2012 quarter.

The market continues to indicate strongly that petrol prices will be capped at a maximum price of $2.30 this year. The probability that unleaded petrol will exceed $2.30 per litre in 2011 is 22% (down from 26% last week), the probability it will exceed $2.40 per litre is 11% (down from 12% last week), and the probability it will go above $2.50 per litre is 10% (steady).

As predicted by iPredict last week, the OCR remained unchanged in July. The market expects Reserve Bank Governor Alan Bollard to increase the OCR e in September to 2.75%, then again in October, to 3.00%. In 2012, increases are expectedin January 2012 (to 3.25%), in March 2012 (to 3.50%), and in June 2012 (to 3.75%).

The expected 90-day bank bill rate for 1 September 2011 is 3.05% (up from 2.87% last week) and for 1 December 2011 is 3.20% (up from 3.02% last week).

There is an 93% probability that average floating-rate mortgages will reach 6.00% by the end of the year, up from an 87% probability last week, but just a 27% probability that they will reach 6.50% in 2011, up from 25% last week.

The market is indicating a Current Account deficit of 4.82% of GDP for the year to June 2011 (down from 5.04% last week), 4.71% of GDP for the year to September 2011 (down from 4.81% last week), and 4.30% of GDP for the year to December 2011 (up from 4.26% last week).

Parties and Personnel

All current leaders of parliamentary parties have at least a 91% probability of remaining in their positions until the election. The most vulnerable is Labour Party leader Phil Goff, but with just a 9% probability of being replaced prior to the election (down from 10% last week).

Key Electorate Contests

Act has a slightly weakened position in Epsom this week with an 89% probability (down from 90% last week) that the seat will be won by a candidate other than a National candidate or incumbent Act MP Rodney Hide.

In Ohariu, United Future’s Peter Dunne has a 73% probability of being re-elected (down from 74% last week)

The market once again appears to be in two minds about New Zealand First. On one hand, it has breached MMP’s 5% threshold this week with a party vote share of 5.1% (steady), but the market also predicts that party leader Winston Peters has only a 22% probability of returning to Parliament (down from 23% last week).

Expectations that Mana Party leader Hone Harawira will retain the Te Tai Tokerau seat in the General Election have improved slightly at 82% (up from 81% last week).

Maori Party Co-Leader Pita Sharples is expected to retain Tamaki-Makaurau (66%, steady), Co-Leader Tariana Turia is expected to retain Te Tai Hauauru (79%, steady), and Te Ururoa Flavell is expected to retain Waiariki (73%, up from 72% last week).

For the Labour Party, Nanaia Mahuta is expected to retain Hauraki-Waikato (76%, steady) and Labour’s position in Ikaroa-Rawhiti (currently Parekura Horomira’s seat) has improved (72%, up from 66% last week)

Te Tai Tonga remains forecast to change hands, with a 74% probability it will be won by Labour’s Rino Tirikatene from the Maori Party’s Rahui Katene (steady compared with last week).

In marginal electorates other than those mentioned above, the probability National’s Jonathan Young will retain New Plymouth has improved markedly (78%, up from 66% last week). There is a 76% probability that National’s Nikki Kaye will retain Auckland Central (down from 77% last week). National’s Paula Bennett is favoured to retain Waitakere (55%, up from 52% last week) and Labour’s Damien O’Connor is expected to win back West Coast-Tasman for Labour (57%, steady).

With no changes to forecast winners in electorate seats over the last week, National continues to be expected to win 40 electorate seats, Labour 24, the Maori Party 3, and Act, United Future and the Mana Party 1 each.

Party Vote, Election Result and Alternative Scenarios

Forecast party vote shares are now: National 45.5% (up from 44.5% last week), Labour 31.9% (steady), the Greens 7.3% (up from 7.2% last week), New Zealand First 5.1% (steady), Act 5.0% (up from 4.9% last week), UnitedFuture 1.8% (down from 2.3% last week), the Maori Party 1.8% (down from 1.9% last week), the Mana Party 1.4% (down from 1.7% last week), the New Citizen Party 0.4% (steady), the proposed Reform New Zealand Party 0% (steady) and the newly proposed Conservative Party 1.1%.

Based on this data, and the electorate results above, Parliament would be as follows: National 55 MPs, Labour 38 MPs, the Greens 9 MPs, Act 6 MPs, New Zealand First 6 MPs, the Maori Party 3 MPs, UnitedFuture 2 MPs and the Mana Party 2 MPs. There would be 121 MPs, requiring a government to have the support of 61 MPs on confidence and supply, so that even with the appearance of New Zealand First, John Key’s National Party could govern with the support of the Act Party alone.

Given New Zealand First’s proximity to MMP’s 5% threshold, iPredict has also analysed what might happen should it win only 4.9% of the vote. Under this scenario, Parliament would be as follows: National 58 MPs, Labour 41 MPs, the Greens 9 MPs, Act 6 MPs, the Maori Party 3 MPs, UnitedFuture and the Mana party 2 MPs each. There would be 121 MPs, requiring a government to have the support of 61 MPs on confidence and supply. John Key’s National Party would require the support of either the Act Party or the Maori Party.

Overall the market indicates a 91% probability there will be a National Prime Minister after the election (up from 88% last week).

MMP Referendum and Miscellaneous

The probability New Zealanders will elect to retain the MMP voting system in the referendum to be held on Election Day is 78%, up from 77% last week.

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iPredict launches www.electionresults.co.nz

July 28th, 2011 at 9:04 pm by Kokila Patel

iPredict launches www.electionresults.co.nz

Four months before November’s election, political journalists, activists and junkies now have 24/7 access to New Zealand’s most accurate forecast of the 2011 election result, following today’s launch by New Zealand’s online predictions market, iPredict, of www.electionresults.co.nz

The new site provides constantly updating forecasts of every aspect of the New Zealand 2011 election, including the party vote share, every electorate contest and a graphical projection of the shape of the 2011-14 New Zealand Parliament.

Daily commentary on the main market movers will be provided by www.electionresults.co.nz editor Ian Llewellyn, a former press gallery political reporter for The Independent business weekly and the New Zealand Press Association (NZPA), and a former press secretary in the 1990s to Finance Minister Bill English and former Health Minister Simon Upton after spending eight months on the picket line during widespread industrial unrest in Thatcher’s Britain in 1989.

www.electionresults.co.nz is powered by the iPredict market, New Zealand’s most accurate forecaster of political and economic events, and sponsored by Auckland corporate and public affairs consultancy Exceltium and online news-service www.scoop.co.nz

The Chief Executive of iPredict, Matt Burgess, said www.electionresults.co.nz would bring to life the comprehensive and detailed information on New Zealand
politics available at www.ipredict.co.nz and would help bring new traders to the market.

“In Ian Llewellyn, we have also found someone with a very broad range of political and journalistic experience, in New Zealand and the United Kingdom, to bring to life what our market is telling us about the future,” Mr Burgess said.

The Managing Director of www.scoop.co.nz, Alastair Thompson, said online predictions markets were uniquely suited to provide data to other 24/7 news organisations, such as www.scoop.co.nz

“Polls are static and out of date the moment they are completed and while they might be useful to fill the gaps in daily newspapers and 6pm news bulletins, the online environment can provide so much richer and more immediate information,” Mr Thompson said.  “At Scoop, we are delighted to be partnering with Exceltium and iPredict to bring this information to life and complement our own 24/7 election coverage.”

The Managing Director of Exceltium, Matthew Hooton, said his company was committed to assisting iPredict in its growth.

“Across the world, predictions markets such as iPredict in New Zealand or inTrade in the United States are showing they are far more accurate, timely and relevant than traditional political polling and we have been pleased to work with iPredict over the last year to develop its offering,” Mr Hooton said.  “We’ve funded www.electionresults.co.nz because the proven predictive power of iPredict will continue to become more important in New Zealand politics and we want to be associated with its growth and success in the years ahead.”

iPredict is owned by Victoria University of Wellington.  Journalists are welcome to use, with attribution, data and reports from www.electionresults.co.nz in their
own reporting of the New Zealand election.

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iPredict Election Update #36

July 26th, 2011 at 3:07 pm by David Farrar

iPredict says:

Key Points:

* OCR expected to be increased as early as September and reach 3.50% in April
* Mortgage rates strongly expected to reach 6% in 2011
* Banks, Dunne, Sharples, Turia and Harawira all expected to win seats
* New Zealand First still above MMP’s 5% threshold
* John Key’s National Party to govern with Act and either the Maori Party or UnitedFuture

Commentary:

There is an expectation that the OCR will increase earlier and more frequently than previously indicated, according to this week’s snapshot from New Zealand’s prediction market, iPredict. Consequently, there is an increased likelihood that mortgage rates will reach at least 6.00% before the end of the year, while other economic indicators have broadly remained the same. In politics, New Zealand First remains above MMP’s 5% threshold, although its hold on this is tenuous, with the market also indicating only a 23% probability that Winston Peters will return to Parliament. Even taking into account New Zealand First’s current forecast share of the party vote, John Key is still strongly favoured to remain Prime Minister, and would be able to govern with the support of the Act Party and one of the UnitedFuture or Maori parties.

(more…)

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