More on iPredict

November 27th, 2015 at 11:00 am by David Farrar

NBR report:

The website says it applied for an exemption from the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT) but Associate Justice Minister Simon Bridges denied it on the basis that iPredict was “a legitimate money laundering risk.”

Mr Bridges says the decision was taken on the recommendation of the AML/CFT National Coordination Committee, which is established to consider the policy.

He added the main reason for denial was that iPredict does not identify its customers, “which creates an opportunity to use the iPredict market to launder illicit funds.

And the chance of this? People could use a fruit market to launder funds.

“Deposit restrictions apply but these can be circumvented by setting up multiple user accounts as the customers’ identities are not verified,” the minister (who iPredict says only has a 4% chance to become the next prime minister) says.

Mr Bridges says he recommended iPredict discuss with the FMA how to meet its obligations under the AML/CFT Act such as requiring users to provide their full name, date of birth and address.

And also scans of passports to verify?

All that is needed is for iPredict to agree with the Government that if they detect suspicious activity which could be money laundering, they’ll report it. So if there was a pattern of deposits and withdrawals without any stocks purchased, that would ring a warning bell.

But requiring them to verify the identify of every customer is over the top.

“We are an academic not-for-profit organisation and our agreement with the FMA dictates we place caps on transactions. For example, over the past seven years, we have handled a total of 3,782 withdrawals, with an average trader net worth of $41. Our withdrawal process is lengthy and we are a low risk of money laundering,” iPredict says.

Yes an average net worth of $41. That will fund a lot of terrorism!

The prediction tool says the cost of compliance is too high so it will wind up operations.

A great example of regulatory overkill.

Government thinks iPredict is a money laundering risk!

November 26th, 2015 at 2:00 pm by David Farrar

Hamish Rutherford reports:

Prediction website iPredict is to be closed down, with the Government deciding it represents a money laundering risk.

The site, run by Victoria University of Wellington, issued a statement to its website on Thursday and on Twitter.

According to the iPredict statement, Associate Justice Minister Simon Bridges refused to grant it an exemption from the Anti-Money Laundering and Countering Financing of Terrorism Act, declaring that it was a “a legitimate money laundering risk” because of the lack of customer due diligence.

The Government must be joking. Or high.

I really don’t think Islamic State are funding their operations by laundering their money through iPredict by investing $50 on the likely level of interest rates in 2016.

Although iPredict said that most of its transactions were small, three traders hold portfolios on the website worth in excess of $10,000.

One of the site’s higher profile traders, Kiwiblog author David Farrar said the decision was hard to fathom.

“Their turnover is teeny. You could only money launder a few hundred [dollars], maybe a thousand, because their’s just not enough people,” Farrar said, adding that the requirement to give bank accounts or credit card details meant the money should be traceable.

“You could money launder many times larger amounts and much more effectively by going to gaming machines,” Farrar added.

“It just seems like such an overreaction.”

It really is a nuts decision. Most stocks have tiny liquidity. It would be the hardest way to launder money you could think of. Plus unless the terrorists were experts on NZ politics and economics, they’d probably lose most of their money.

So much for being a Government that believes in small Government and proportionate regulation!

Some current iPredict probabilities

May 16th, 2015 at 4:00 pm by David Farrar

Some interesting prices and probabilities on iPredict at the moment. They include:

  • Green male co-leadership: James Shaw 65%, Kevin Hague 37%
  • Wellington Councils amalgamate this year – 4%
  • 2017 election: National PM 59%, Labour PM 39%
  • NZ First: If hold balance of power 35% chance support National, 205 chance Labour
  • TPP signed in 2015: 8%
  • 2016 US Presidential Election: Democrats 60%, Republicans 40%

iPredict looking forward

September 25th, 2014 at 9:00 am by David Farrar

I was fascinated by the efforts of some people to game iPredict, presumably to make certain seats look marginal. A person or persons must have put thousands of dollars into Hamilton East to try and make it look like Labour would win the seat. I put several hundred in to counter it (as I knew of no reason it would be marginal) and know quite a few others who did. Someone must have wasted a few thousand dollars in trying to make the seat appear marginal.

iPredict got the electorates pretty right – 70 out of 71 is quite good – only Christchurch Central was wrong (and in a big way).

In terms of the party vote, they did less well. Their final newsletter was out by the following margins for the party vote:

  • National 4.1% too low
  • Labour 0.7% too high
  • Greens 4.9% too high
  • NZ First 2.1% too low
  • Conservatives 0.2% too low
  • Internet Mana 0.9% too high
  • Maori 0.5% too low
  • ACT 0.6% too high
  • United 0.3% too high

The National, Greens and NZ First results were significantly out. The others not so bad.

Anyway what is iPredict predicting for leaders at the moment:

  • 62% chance John Key departs by end of 2017
  • 75% chance David Cunliffe departs in 2014 and 95% chance by end of 2015
  • 52% chance National wins 2017 election
  • 55% chance Grant Robertson is next Labour leader
  • 40% chance Steven Joyce is next National leader, and 32% chance Paula Bennett
  • 73% chance Jonathan Coleman becomes Health Minister

Time will tell how accurate these ones are!

Projected MPs for 2014 Parliament

September 19th, 2014 at 10:19 am by David Farrar

This is a projection of who may be in Parliament based on the average of the polls, and using the seat projections of iPredict (I don’t actually agree with all of them, but they are the only complete source of public predictions so I use them).

Those in bold are not current MPs.

National – 58 seats, 40 electorates, 18 list

  1. Auckland Central – Nikki Kaye
  2. Bay of Plenty – Todd Muller
  3. Botany – Jami-Lee Ross
  4. Clutha-Southland – Todd Barclay
  5. Coromandel – Scott Simpson
  6. East Coast – Anne Tolley
  7. East Coast Bays – Murray McCully
  8. Hamilton East – David Bennett
  9. Hamilton West – Tim Macindoe
  10. Helensville – John Key
  11. Hunua – Andrey Bayly
  12. Ilam – Gerry Brownlee
  13. Invercargill – Sarah Dowie
  14. Kaikoura – Stuart Smith
  15. Maungakiekie – Pesata Sam Lotu-Iiga
  16. Nelson – Nick Smith
  17. New Plymouth – Jonathan Young
  18. Northcote – Jonathan Coleman
  19. Northland – Mike Sabin
  20. North Shore – Maggie Barry
  21. Otaki – Nathan Guy
  22. Pakuranga – Maurice Williamson
  23. Papakua – Judith Collins
  24. Rangitata – Jo Goodhew
  25. Rangitikei – Ian McKelvie
  26. Rodney – Mark Mitchell
  27. Rotorua – Todd McClay
  28. Selwyn – Amy Adams
  29. Tamaki – Simon O’Connor
  30. Taranaki-King Country – Barbara Kuriger
  31. Taupo – Louise Upston
  32. Tauranga – Simon Bridges
  33. Tukituki – Craig Foss
  34. Upper Harbour – Paula Bennett
  35. Waikato – Lindsay Tisch
  36. Waimakariri – Matthew Doocey
  37. Wairarapa – Alastair Scott
  38. Waitaki – Jacqui Dean
  39. Whangarei – Shane Reti
  40. Whanganui – Chester Borrows
  41. List 1 – Bill English
  42. List 2 – David Carter
  43. List 3 – Steven Joyce
  44. List 4 – Hekia Parata
  45. List 5 – Chris Finlayson
  46. List 6 – Tim Groser
  47. List 7 – Michael Woodhouse
  48. List 8 – Nicky Wagner
  49. List 9 – Paul Goldsmith
  50. List 10 – Melissa Lee
  51. List 11 – Kanwal Bakshi
  52. List 12 – Jian Yang
  53. List 13 – Alfred Ngaro
  54. List 14 – Brett Hudson
  55. List 15 – Paul Foster-Bell
  56. List 16 – Jo Hayes
  57. List 17 – Parmjeet Parmar
  58. List 18 – Chris Bishop

Labour – 32 seats, 27 electorates, 5 list

  1. Christchurch Central – Tony Milne
  2. Christchurch East – Poto Williams
  3. Dunedin North – David Clark
  4. Dunedin South – Clare Curran
  5. Hauraki-Waikato – Nanaia Mahuta
  6. Hutt South – Trevor Mallard
  7. Ikaroa-Rawhiti – Meka Whaitiri
  8. Kelston – Carmel Sepuloni
  9. Mana – Kris Faafoi
  10. Mangere – Su’a William Sio
  11. Manukau East – Jenny Salesa
  12. Manurewa – Louisa Wall
  13. Mt Albert – David Shearer
  14. Mt Roskill – Phil Goff
  15. Napier – Stuart Nash
  16. New Lynn – David Cunliffe
  17. Palmerston North – Iain Lees-Galloway
  18. Port Hills – Ruth Dyson
  19. Rimutaka – Chris Hipkins
  20. Rongotai – Annette King
  21. Tamaki Makaurau – Peeni Henare
  22. Te Atatu – Phil Twyford
  23. Te Tai Hauauru – Adrian Rurawhe
  24. Te Tai Tonga – Rino Tirikatene
  25. West Coast-Tasman – Damien O’Connor
  26. Wellington Central – Grant Robertson
  27. Wigram – Megan Woods
  28. List 1 – David Parker
  29. List 2 – Jacinda Ardern
  30. List 3 – Clayton Cosgrove
  31. List 4 – Sue Moroney
  32. List 5 – Andrew Little

Greens – 16 seats, 16 list

  1. List 1 – Metiria Turei
  2. List 2 – Russel Norman
  3. List 3 – Kevin Hague
  4. List 4 – Eugenie Sage
  5. List 5 – Gareth Hughes
  6. List 6 – Catherine Delahunty
  7. List 7 – Kennedy Graham
  8. List 8 – Julie Anne Genter
  9. List 9 – Mojo Mathers
  10. List 10 – Jan Logie
  11. List 11 – David Clendon
  12. List 12 – James Shaw
  13. List 13 – Denise Roche
  14. List 14 – Steffan Browning
  15. List 15 – Marama Davidson
  16. List 16 – Barry Coates

NZ First – 10 seats, 10 list

  1. List 1 – Winston Peters
  2. List 2 – Tracey Martin
  3. List 3 – Richard Prosser
  4. List 4 – Fletcher Tabuteau
  5. List 5 – Barbara Stewart
  6. List 6 – Clayton Mitchell
  7. List 7 – Denis O’Rourke
  8. List 8 – Pita Paraone
  9. List 9 – Ron Mark
  10. List 10 – Darroch Ball

Internet Mana – 2 seats, 1 electorate, 1 list

  1. Te Tai Tokerau – Hone Harawira
  2. List 1 – Laila Harre

Maori Party – 2 seats, 1 electorate, 1 list

  1. Waiariki – Te Ururoa Flavell
  2. List 1 – Marama Fox

ACT – 1 seat, 1 electorate

  1. Epsom – David Seymour

United Future – 1 seat, 1 electorate

  1. Ohariu – Peter Dunne

The most marginal seats according to iPredict

September 17th, 2014 at 1:51 pm by David Farrar

Here’s the 16 most marginal seats according to iPredict.

  1. Port Hills – National and Labour both 50%
  2. Palmerston North – Labour 55%
  3. Te Tai Hauauru – Labour 60%
  4. Waimakariri – National 62%
  5. Hutt South – Labour 69%
  6. Te Atatu – Labour 69%
  7. Tamaki Makaurau – Labour 69%
  8. Te Tai Tokerau – Mana 70%
  9. Ohariu – United Future 75%
  10. Christchurch Central – Labour 75%
  11. Hamilton East – National 80%
  12. Waiariki – Maori 82%
  13. Maungakiekie – National 83%
  14. Napier – Labour 85%
  15. Wairarapa – National 85%
  16. Epsom – ACT 87%

The two most marginal seats are both Labour held. iPredict is predicting Labour pick up two Maori seats despite being marginally behind in the polls in them.

What a difference a year makes

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


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.


The 71 electorates by iPredict

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


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.


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

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.

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.

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.

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 🙂

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%.


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.

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


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.


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


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.


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


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.


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


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.


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


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.


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


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.


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.

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


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.


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


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.


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

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.