The ipredict share for Goff to depart before the election has spiked up to 47c. Does someone know something?

I do not know who is buying the shares and putting the price up. In fact I have existing money on Goff staying in the job, so I hope he is not rolled.

The price has been at 10c, or 10%, for a couple of weeks, and just shot up recently.

If you think Goff is safe, it’s a great chance to make some money and sell the stock. I’m tempted to sell, and make some money. But I don’t know if the person or persons buying know something.

iPredict has a range of stocks on who will be the Justice Minister after the election. The prices and hence probabilities are:

1. Judith Collins 45%
2. Chris Finlayson 20.95
3. Simon Bridges 8.3%
4. Other Labour MP 5.7%
5. Chester Borrows 5.4%
6. Kate Wilkinson 2.7%
7. Amy Adams 2.7%
8. Charles Chauvel 2.7%
9. Other Nat MP 1.7%
10. Other MP 0.1%
11. Winston Peters 0.0%

The Minister of Justice is normally a lawyer, but not always – Tony Ryall was Justice Minister and is not a lawyer. It is unusual to have one Minister as both Justice and Attorney-General also.

I think the market is right in saying it is not likely Winston Peters will be Justice Minister. The reason for this is that portfolio is far far too much hard work.

Winston prefers portfolios with glamour, but where officials do all the work. He’s already done Treasurer and Foreign Minister. So what, I ponder, could Phil Goff offer him in a Labour-Greens-Winston-Hone Government if they get the numbers for it?

There is really only one portfolio left that fits Winston’s criteria. Attorney-General!! Winston will be in charge of the judiciary and the SFO.

Key Points:

*       John Key forecast to be re-elected, requiring one coalition partner

*       Economic outlook worsens with double-dip recession now expected to continue through March quarter, and rising expectations it may extend into June quarter

*       OCR strongly expected to be cut on 10 March and expectations for 90-day yields and floating-mortgage rates fall, despite inflation expectations rising

*       Greens, New Zealand First and probability of UnitedFuture winning Ohariu trending down

*       Harawira strongly expected to win Te Tai Tokerau and probability of New Left Party approaches 50%

*       Contracts for Manurewa, Maungakiekie, Rodney, Waitaki and National’s Rodney selection to be launched at 2.00 pm today

Commentary:

This week’s snapshot from New Zealand’s prediction market, iPredict, continues to forecast that John Key will be able to form a government following this year’s General Election – but whereas last week his National Party was forecast for the first time to be able to govern alone the market now again indicates he will need at least one coalition partner.

Mr Key’s forecast re-election is despite worsening expectations for economic data.  The market now indicates a 60% probability that Statistics New Zealand will report on 24 March that New Zealand was in a double-dip recession in the December 2010 quarter, up from 52% last week and 48% the week before.

Looking ahead, there is now a 58% probability the recession will extend into the March 2011 quarter (up from 40% immediately following the Christchurch earthquake last week and 16% the week prior to the earthquake) and a 39% probability it will extend into the June 2011 quarter (up from 18% last week and 6% the week before).  The probabilities the economy will be in recession in the September 2011 and December 2011 quarters remain steady at 18% and 14% respectively.

Inflation expectations have risen.  Annual inflation is expected to be 4.5% for the March quarter and 5.0% for the June 2011 quarter, up from 4.9% last week.  The probability unleaded petrol will exceed $2.20 per litre in 2011 has increased from 63% last week to 77% this week, while the probability it will exceed $2.30 per litre has now reached 43% compared with just 30% immediately following the earthquake.

Despite this, there are growing expectations that interest rates will fall.  The market now indicates a 70% probability the Reserve Bank will lower the Official Cash Rate (OCR) from its current 3.00% on 10 March, up from 11% immediately following the earthquake last week, and up from less than 1% prior to the earthquake.(1)   The probability the bank will hold the OCR on 10 March is now down to 28% compared with 80% immediately following the earthquake and 98% prior to the earthquake.  The bank is then expected to hold the OCR on 28 April (86% probability) and 9 June (84% probability).

Expected yields for 90-day bank bills have also plunged.  Immediately prior to the earthquake, the expected 90-day rate on 1 June 2011 was 3.37%, but today this is down to 2.81%.  The expected 90-day rate on 1 September 2011 has fallen from 3.53% to 3.16%, while the expected rate on 1 December 2011 has fallen from 3.71% to 3.44%.

Average floating-rate mortgages are broadly believed to have reached their peak.  The probability they will reach 6.50% in 2011, from their current 6.39%, is now down to 40%, from 84% last week and 88% the week before.  The probability they will reach 6.75% is now just 21%, compared with 48% immediately following the earthquake and 69% prior to it.  The probability they will go as high as 7.00% is now down to 12%, from 21% last week and 40% prior to the earthquake.

The market continues to indicate a 97% probability that the election will be held on Saturday 26 November.

Between now and then, all party leaders continue to be expected to retain their positions.  The most vulnerable continue to be Labour’s Phil Goff and the Maori Party’s Tariana Turia, but with Mr Goff having just a 13% probability of being replaced (down from 14% last week) and Mrs Turia just a 12% probability of being replaced (down from 13% last week).

Act Leader Rodney Hide has a 69% probability of retaining Epsom for his party (up from 68% last week) and UnitedFuture Leader Peter Dunne a 53% probability of being re-elected in Ohariu (down from 60% last week and 65% the week before).

Winston Peters is not expected to be elected to Parliament, with just a 28% probability he will be back, steady compared with last week.   There is a 28% probability he will stand in the Epsom electorate.

There is an 89% probability newly Independent MP Hone Harawira will win Te Tai Tokerau as an independent or for a party other than the Maori Party, up from 72% last week and 48% the week before.  Labour is expected to retain Ikaroa-Rawhiti (55% probability, steady compared with last week) while Labour’s challenger in Te Tai Tonga, Rino Tirikatene, has a 50% probability of defeating the Maori Party incumbent Rahui Katene, compared with 51% last week.  Mrs Katene has a 48% probability of winning compared with 47% last week.

The probability that a new left-wing party will be formed involving at least two of Mr Harawira, former Alliance President and current Unite National Secretary Matt McCarten and former Green MP Sue Bradford remains below 50%, but has risen sharply since Mr Harawira’s departure from the Maori Party to 47% from 34% last week.  The probability of a new right-wing party involving former National Party leader and Reserve Bank Governor Don Brash is down to 14% compared with 15% last week.

Forecast party vote shares are: National 46.5% (steady compared with last week), Labour 31.9% (down from 32.3%), the Greens 7.0% (down from 7.2% last week and 8.0% the week before), Act 4.0% (up from 2.5% last week), New Zealand First 3.2% (down from 3.4% last week and 4.3% the week before), UnitedFuture 2.1% (up from 1.7% last week and 1.5% the week before) and the Maori Party 2.0% (down from 2.2% last week).

Based on this data, the market is forecasting the following Parliament:  National 59 MPs, Labour 41 MPs, Greens 9 MPs, Act 5 MPs, the Maori Party 3 MPs, UnitedFuture 3 MPs and Mr Harawira.  There would be 121 MPs, requiring a government to have the support of 61 MPs on confidence and supply.  National’s Mr Key could govern with the support of one of Act, UnitedFuture or the Maori Party.

Because of growing speculation about the possibility of a new left-wing party, iPredict has also analysed what would happen were that party to receive 2% of the total vote (“all others” currently stands at 2.4%) and were Mr Harawira to win his seat for the new party.  Under this scenario, Parliament would be as follows:  National 58 MPs, Labour 40 MPs, Greens 9 MPs, Act 5 MPs, the Maori Party 3 MPs, UnitedFuture 3 MPs and the new left-wing party 2 MPs.  There would be 120 MPs, requiring a government to have the support of 61 MPs on confidence and supply.  Mr Key could govern with the support of one of Act, UnitedFuture or the Maori Party.

The result in the most marginal Maori electorate, Te Tai Tonga, does not affect the overall political situation.

There continues to be no politically plausible combination that would allow a Labour-led government to be formed, with there now being an 83% probability there will be a National Party prime minister after the election, up from 81% last week and 79% the week before.

In electorates for which bundles of stocks were launched last week, Mr Key has a 98% probability of retaining his Helensville seat, National’s Shane Ardern a 95% probability of retaining Taranaki-King Country, National’s Phil Heatley a 90% probability of retaining Whangarei and National’s Eric Roy a 79% probability of retaining Invercargill despite competition from former Labour MP Lesley Soper.

Looking at marginal seats other than Ikaroa-Rawhiti, Ohariu and Te Tai Tonga mentioned above, electorates where the predicted winner has less than 65% probability of winning are: New Plymouth (62% probability of being won by Labour’s Andrew Little from National’s Jonathan Young, up from 60% last week); Otaki (63% probability of being retained by National’s Nathan Guy over Labour’s Darren Hughes, steady compared with last week); Waitakere (62% probability of being won by National’s Paula Bennett over Labour’s Carmel Sepuloni, up from 58% last week); and West Coast-Tasman (53% probability of being retained by National’s Chris Auchinvole over Labour’s Damien O’Connor, down from 55% last week).

There is a more than 99% probability National’s Jami-Lee Ross will win the Botany by-election, up from 98% last week.

There is an 80% probability voters will elect to retain the MMP voting system in the referendum to be held on election day, steady compared with last week.

iPredict is owned by Viclink, the commercial arm of Victoria University of Wellington.  Details on the company and its stocks can be found at www.ipredict.co.nz

The company will be providing full election coverage this year, including of every electorate race in the country.  Bundles of contracts for every electorate will be launched progressively through to the end of March.  Contract bundles will be launched at 2.00pm today for the Manurewa, Maungakiekie, Rodney and Waitaki electorates.

A contract bundle will also be launched at 2.00pm today asking who will be selected as the National Party’s candidate in the Rodney electorate: John Kirikiri, Mark Mitchell, Christopher Penk, Brent Robinson, Scott Simpson or other.

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 9.33 am today.

(1) The contract is worded “Reserve Bank to increase OCR by more than 50 basis points, or lower it, on 10 March 2011,” but it has been assumed the market rates the probability of an increase of 75 basis points or more at zero.

The weekly iPredict update is out. they find:

This week’s snapshot from New Zealand’s prediction market, iPredict, suggests the National and Green parties both gained from their leaders’ “state of the nation” speeches last week, while the Labour Party went backwards.  National’s forecast share of the party vote has risen to 45.9% (from 45.6% last week), the Greens are up to 8.0% (from 7.5% last week) while Labour is down to 30.5% (from 32.0% last week).  John Key would be able to continue as Prime Minister with the support of one of the Act, UnitedFuture or the Maori Party.

Interesting that no one has been willing to put money on National getting a lower vote share despite the assets part-sale announcement.

At the time the snapshot was taken, the probability of a new left-wing party around at least two of former Alliance President and current Unite National Secretary Matt McCarten, former Green MP Sue Bradford and current Maori Party Mr Harawira was 37%, up from 28% last week. 

And I suspect wull rise further after Waitangi Day.

Tracy Watkins reports at the Dom Post:

Talk is swirling on the left and the right of the political spectrum about new political parties, just a year out from the next election.

Former National leader Don Brash is understood to be coming under pressure within Right-wing circles in Auckland to consider a return to politics, while former Green MP Sue Bradford admits she would consider a comeback under the banner of a new Left-wing party.

iPredict, an online futures market for politics, launched stocks yesterday picking the formation of a new Left-wing or Right-wing party before the election and raised the stakes by linking Ms Bradford and Dr Brash to their creation.

iPredict has a new right ring party (with Don Brash as a member) at 19%, and a new left wing party (with at least two of Harawira, Bradford and McCarten) at 41%.

I think they are both over-priced.

iPredict blogs:

Forecast party vote shares are: National 44.5% (down from 45.0% last week), Labour 35.4% (down from 36.6% last week), Greens 8.2% (down from 8.3% last week), New Zealand First 4.2% (down from 4.5% last week), Maori Party 2.8% (down from 3.1% last week), Act 2.8% (up from 2.4% last week) and UnitedFuture 0.3% (steady).

The probability of Act Leader Rodney Hide winning Epsom for his party continues to rise.  The market now indicates he has a 60% probability of retaining the seat for Act, up from 55% last week and 52% the week before.

Based on this data, the market is now forecasting the following Parliament: National 57 MPs, Labour 45 MPs, Greens 10 MPs, Maori Party 5 MPs and Act 4 MPs.  There would be 121 MPs, requiring a government to have the support of 61 MPs on confidence and supply.

What this shows is that if Rodney holds Epsom, a centre-right Government is forecast.

If Rodney does not win Epsom, then the Maori Party is expected to hold the balance of power.

Food for thought.

iPredict has just launched some Mana vote share stocks.

They predict:

• Faafoi 45.0%
• Parata 35.4%
• Others 22.0%

Is the markets are correct, what does that suggest in terms of a result.

In 2008, there were almost 35,000 votes so if turnout is the same, then that is a 3,500 or so majority.

If turnout drops from 83% to 65%, then that would suggest a majority of 2,800 or so.

It will be interesting to see how accurate iPredict is. There have been no public polls at all, so people must be investing on the basis of their sentiment over how the race is going. Obviously people think Labour will lose votes – that Faafoi will get around 8% less than Laban, but they may be wrong.

iPredict released stocks today on who will win the Maori seats next year, and Epsom and Ohariu. Earlier this week also stocks on what each party will get as party vote in the election.

The current prediction for the election, is:

1. National 46.3%, 59 seats
2. Labour 36.6%, 46 seats
3. Greens 6.9%, 8 seats
4. NZ First 3.6%, 0 seats
5. Maori, 3.7%, 5 seats
6. United 0.3%, 1 seat (overhang)
7. ACT 1.9%, 2 seats

So you need 61 of 121 seats to govern. National/ACT/United are 62 seats. With Maori they are 67 seats. It shows the importance of ACT being there.

Labour/Greens are 54 seats. With Maori Party they could make 59 seats. Close but not quite there.

National is well ahead of Labour in the polls, but iPredict shows people think that come the election things will be closer. I agree.

The iPredict stock for whether The Hobbit moves off shore is now up to 30c, or 30%.

On Monday it was as low as 10%, and now it is steady on 30%. That is a pretty significant level of risk it will go. I’m going to be monitoring the stock closely over this week to see where it goes before a decision is officially announced – if any insiders are trading, then the stock price should beat the official announcement.

iPredict have launched a range of stocks on who will be the next Breakfast host. As of this morning the favourites are:

1. Tm Wilson 35%
2. Oliver Driver 17%
3. Tamati Coffey 11%
4. Sean Plunket 10%
5. Greg Boyed 9%
6. Mike Hosking 8%
7. Paul Holmes 7%
8. Jack Tame 6%
9. Jeremy Wells 6%
10. Dominic Harvey 5%
11. Matty McLean 2%
12. Peter Williams 1%
13. Mark Sainsbury 1%

If you think anyone is over or under priced, then make some money if you are right and buy or sell some stock!

iPredict have just launched two stocks on whether Cameron Slater or Andrew Williams will receive more votes in the Albany Ward, for the Auckland Council elections.

The Slater to win more votes stock is at 23c.

The Williams to win more votes stock is at 78c.

Will the incumbent Mayor actually get less votes than a rebel blogger? If you think you know the answer, there is money to be made.

I think I have made more out of iPredict on the budget, than I did from the actual tax cuts.

I’ve just had a total of $1,250 paid out on GST not going up before 1 July (it goes up 1 Oct) and the top tax rate going to 33c (or 34c) and it got paid out today so my iPredict bank balance just got $1,250 higher.

I’ve invested recently in the UK Labour leadership contest – my money is on David Miliband – for now anyway.

As I said in comments, I did well with the UK election. I could have lost over $1,300 if the outcomes were different.

For those interested, here are my current investments in iPredict:

• Rodney remains sole Leader of Act in 2010
• Jim Anderton to announce he will not stand at the next election, in 2010
• The PM after 2011 election will be National
• The top tax rate will be from 33% (inclusive) to 35% (not inclusive) after the Budget
• John Tamihere will not run for Mayor
• Stephen Tindall will not run for Mayor
• The age for on licence alcohol purchases will not increase to 20
• The US and Australian dollars will not reach parity in 2010
• None of Phil Goff, Bill English, Annette King nor John Key will lose their jobs in 2010
• GDP will not be negative for any quarter in 2010
• GST will not go up before July 2010
• That there will not be another Ministerial departure in 2010
• That Winston will not return to Parliament
• The neither the ACT nor the Maori Party agreements with National will terminate in 2010
• That Andrew Little will not become the MP for New Plymouth
• That Obama will have a positive approval rating on 1 June 2010
• That the OCR will not increase before 1 July 2010 (I realise this is not likely to be the case, but I got the stock cheap so staying with it)
• That Sarah Palin will not run for President in 2012

If you disagree with any of my predictions, then buy some stock yourself and make some money if you are right.

iPredict has three stocks on the outcome of the 2011 election, being which party will the Prime Minister come from after the election.

Most of last year the price for PM.2011.NATIONAL has been around 65c, but I noticed recently it is ow up at 80c, suggesting the market thinks National’s re-election is 80% likely.

The price data since the 2008 election is below:

As one can see, the sentiment in favour of a National victory has increased significantly so far this year, and in the last ten days has jumped 5c to over 80c.

Now people might say an 80% chance of National winning is about right. But in fact the market is saying the chances of National winning is around 85%, when you discount the use of money.

When a contract does not pay out for a while, the price of the stock reflects the cost of money, so even if something is 100% likely, people won’t pay 95c for a stock which pays out in 18 months, as the 5c gain on 95c investment is less than they would have got in the bank. This is why stocks with no chance of occurring such as John Key stepping down as National Leader this year are trading at 5c instead of 0c.

So what is the market really saying are the odds of National winning the next election. If you invest $80 you get $100 back in 20 months time. Now if you can (for no risk) put that in a bank account and get 8% per annum which is $11 over 20 months. So risk free you will get 91%. So effectively the premium for the possibly that National may not win is 9%.

So if we looked at it in terms of odds, National is 10:1 favourite.

If you think Labour has a better chance than 1 in 10 of winning the election so Phil Goff becomes Prime Minister, then you should sell PM.2011.NATIONAL or by PM.2011.LABOUR.

Many new stocks today and tomorrow at iPredict.

MONDAY
Mon 2:00pm WILLIAMS.RESIGN Andrew Williams to depart as mayor of North Shore by 1 May 2010
Mon 2:05pm ACT.HIDE.LEAD Rodney Hide to remain sole leader of ACT in 2010
Mon 2:10pm FITCH.UKEX.2010 Fitch Ratings to downgrade UK’s sovereign credit rating in 2010
Mon 2:15pm MP.DUNNE.2010 Peter Dunne to announce in 2010 he will not stand in next election
Mon 2:20pm NP.LITTLE.2011 Andrew Little to win New Plymouth in 2011
Mon 2:25pm MP.ANDERTON.2010 Jim Anderton to announce in 2010 he will not stand in next election

TUESDAY
Tue 9:00am WELLYWOOD Wellywood sign to be erected by 1 January 2011
Tue 9:05am RON.NOTKING.2011 Annette King to announce she will NOT stand for Rongotai in 2011
Tue 9:15am 91.APR.x April petrol contracts
Tue 9:25am RBA.6APR.x April RBA contracts

UPDATE: Oh someone at iPredict has a wicked sense of humour.

This is the official photo they are using for their WILLIAMS.RESIGN stock. Now that is effing funny.

My net worth on iPredict is now up to $5,900, and I currently am invested in 28 stocks, and have 11 active buy or sell orders.

Some of my current stocks are:

• PM.2011.NATIONAL – this has climbed from 66c to almost 77c. As it does not pay out until end of 2011, this is a very high price.
• TOPTAX.33-35 – I have purchased this stock in the hope that the top tax rate in the budget will be restored back to 33%, where it used to be before Cullen. Is at 88c.
• UK2010.CON.ABS is at 50c and pays out if the UK Tories gain an absolute majority. Recent polls had shown this was unlikely, but in the last few days their lead seems to be growing again.
• AKL.RUN.TAMIHERE is at 45c. I am selling this as I do not think he will stand for Mayor (more likely for Council).
• AU.USD.2020.1 pays out if the Aussie dollar matches the US dollar in 2010. I have sold this stock and it is at 34c.
• I have sold all four leadership stocks, paying out if they lose their jobs, so I think Key, English, Goff and King will all be there at years ends. Prices are Key 5c, English 10c, Goff 15c and King 15c.
• MIN.DEP2.2010 pays out if there is a second Ministerial resignation this year. I sold this at 58c and it is currently at 63c. So I am hoping no one else stuffs up!
• MIN.HEATLEY pays out if he returns to the Ministry. Is at 15c, and I sold it at 17c.
• MINWAGE.1STREAD pays out if Sir Roger’s bill passes first reading. I short sold this 52c and it is now at 1c as National have said they will not vote for it.
• Have short sold the two stocks for the ACT and Maori Party agreements with National terminating. The ACT one is at 6c and Maori Party 9c.
• By just 0.1% Obama had a positive approval rating on the 1st of March. I was nervous as I had $600 on him not being negative. His current net rating is 2.8% positive so I have short sold the OBAMA.DISAP.1JUN which is at 27c.
• I have short sold both the OCR increase stocks, getting 31c for the increase by 1 April and 82c for the increase by 1 Jul. I am confident on the 1 April one and think 1 July will be a close call.
• PRES2012.PALIN pays out if she announces she is standing by the end of 2011. I short sold this at 51c, which is where it still is.

I attended on Wednesday night the launch of “Key to Victory” which is the normal post election campaign review book edited by Stephen Levine and Nigel Roberts.

I find these books so fascinating, I was even reading it during the speeches!

Bryce Edwards has reviewed (h/t iPredict Blog) a chapter by Shaun McGirr and Rob Salmond on what sources of information best predicted the election outcome. Was it an individual poll, the iPredict markets or the polls of polls.

The amount invested in iPredict was considerable:

• $64,500 was traded over the likely nature of ‘the Maori Party’s post-election relationship with National’
• $25,800 was traded over the Wellington Central battle between Grant Robertson and Stephen Franks
• $132,100 was traded over whether ‘there will be a National prime minister after the 2008 election’
• $413,000 in total was invested in election-related predictions

And how did iPredict do”

So, how accurate was iPredict in 2008? McGirr and Salmond conclude that although iPredict overestimated the eventual support for both Labour and National, it was more accurate any individual polling company.

And the individual polls:

In reality in 2008, McGirr and Salmond found this to be the case – with Colmar Brunton and DigiPoll exaggerating public support for National, and Roy Morgan exaggerating support for Labour (p.264).

So which polling companies were most accurate and inaccurate? McGirr and Salmond say that TV3’s TNS poll was the best (as it was in 2005 as well), and Fairfax’s Neilson pool was the poorest.

The TV3 poll is the one that currently shows a 27% gap! Mind you they are now with Reid Research, so there may be a different methodology used now.

Then they look at the polls of polls published by three outlets – NZPA, Rob (at 08 Wire) and myself (at curiablog).

In addition to the five opinion polls, some observers attempted to average out the idiosyncratic errors of the individual polls by aggregating them into a “poll-of-polls” using different methods. The New Zealand Press Association simply took the average of the estimates of the six most recent polls, while The New Zealand Herald took the average of the last four polls. Two blog-based polls-of-polls – one run by David Farrar of New Zealand’s premier political blog Kiwiblog, and one hosted at a smaller blog [run by author Rob Salmond] called 08wire – weighted more recent polls with larger sample sizes more heavily (p.257).

And how did the poll of polls do?

McGirr and Salmond say that ‘Poll-of-polls consistently performed well during the 2008 campaign, outperforming most of the opinion polls and the prediction markets’ (p.270). They therefore advocate that both the media and public should pay much more attention to this highly accurate source of political information.

Tis has prompted me to update the poll of polls widget, which is below.

Salmond ranks the different outlets for their accuracy to the final result. In order they were:

1. NZ Herald poll of polls 6.1 (error from result)
2. NZPA poll of polls 6.8
3. Curiablog poll of polls 8.1
4. TV3/TNS poll 9.6
5. 08 wire poll of polls 13.6
6. iPredict 15.7
7. TVNZ/Colmar Brunton poll 16.8
8. NZ Herald/Digipoll poll 19.8
9. Roy Morgan poll 20.8
10. Fairfax/Neilsen poll 29.6
11. NZ Political Stockmarket 109.5

The NZ Political Stockmarket used virtual money, so it shows what a difference real money can make.

The authors conclude that media outlets should not just report the individual poll results when they commission a poll, but also publish regular info on a poll of polls and on iPredict.

Incidentally I will probably review and tweak the curiablog methodology a bit when I have some spare time.

Nine different iPredict stock paid out yesterday, and I received $3,300!

I now need to find some new stocks to invest in!

Well the year is almost up, so unless there is some upset in the next nine days, I can review how I have done on iPredict. I’m number three in terms of net worth, which isn’t bad.

The events that I predicted correctly were:

1. That the Electoral Finance Act would be repealed by May 2009
2. That the price of 91 unleaded petrol would be more than 156c at end of Feb
3. That Helen Clark would leave Parliament in 2009
4. That Michael Cullen would leave Parliament in 2009
5. That Phil Twyford would not be Labour’s Mt Albert candidate
6. That Melissa Lee would be National’s Mt Albert candidate
7. That Labour would win the Mt Albert by-election
8. That the OCR would not increase before July 2009
9. That the anti-smacking referendum would not be cancelled
10. That variable mortgage rates would be less than 6.5% in June 2009
11. That the unemployment rate would not decline in June 2009
12. That Christine Rankin would remain a Families Commissioner past August 2009
13. That there would be no disconnections under S92A before September 2009
14. That the VSM bill would pass its first reading
15. That Obama’s approval rating would not be negative on 4 November 2009
16. That the Government will change the name of Wanganui to allowing both Whanganui and Wanganui to be official

The events that I will have predicted correctly by 1 January 2010 (unless something major happens) are:

1. Winston Peters remains sole Leader of NZ First in 2009
2. Annette King remains Labour Deputy Leader in 2009
3. The Foreshore & Seabed Act is not repealed in 2009
4. Phil Gof remains Labour Leader in 2009
5. A second Minister will not depart in 2009
6. Jim Anderton will not announce his retirement in 2009
7. The National/Maori Party agreement will not terminate in 2009
8. The National/ACT agreement will not terminate in 2009
9. That Robert Mugabe will remain President of Zimbabwe in 2009

So did I get any wrong? Well I like to say no, but the lawyers say yes.

I lost around $250 on my prediction that Frank Bainimarama would remain Interim Pm of Fiji. I maintain that he did remain PM at all times and never surrendered power. iPredict’s lawyers say that he was removed from power by the Supreme Court of Fiji, Again I say they had no ability to remove him (as shown when a day later they were sacked) and that the substance of the stock was about whether he would relinquish power.

Anyway 25-1 isn’t too bad, even though 26-0 would have been better

My final column for the year:

Brown to fight 2010 election

BROWN.RESIGN pays out $1 if UK PM Gordon Brown loses his job before the 2010 general election. With rumours that a date of March has been set for the election, it seems clear that Brown will be the Labour Leader and PM until the election.

The share price was 30c on 19 November and has fallen in the last few weeks to 10c.

But will Annette King fight 2011?

DEP.KING.2010 pays out $1 if Annette King is replaced as the Deputy Leader of the Labour Party by the end of 2010.

The price has been at 30c for several weeks but in the last few days has increased to 37c.

King has ruled out standing for Mayor of Wellington, but politicians can change their minds. I tend to think the stock is over-priced. King is popular in the caucus, and any change in Deputy Leader would be seen as destabilising Goff’s leadership. I’m definitely going to start short selling the stock if it goes any higher.

Len Brown’s stocks up

A UMR poll showed Len Brown ahead of John Banks in response to the question of who would be the better Mayor (which is not the same as asking who would you vote for). This has pushed his MAYOR.BROWN prices from the 30c average of recent months to a leading 45c. I think this is a bit optimistic at this stage. I purchased some Brown stocks early on for 15c as they were under valued at that price. At 45c I am very close to selling them.

And the other Mayors

Three new stocks on the chances of Dunedin Mayor Peter Chin, Christchurch Mayor Bob Parker and Wellington Mayor Kerry Prendergast being re-elected next year.

MAYOR.CHIN is at 79c but this has had only 16 shares traded. I would have thought the Dunedin Stadium protest would have his price somewhat lower.

MAYOR.PARKER is at 88c. Also light trading with only 33 shares traded. While there has been some controversy over certain property deals and decisions, there does not appear to be a credible challenger.

MAYOR.PREDERGAST is at 68c, after initially selling at 80c. Mayor Kerry has yet to confirm she will stand again, so the price seems about right. It is hard to see one current Councillor beating her, and a “celebrity” challenger seems unlikely. However the wild card factor is the team Bob Jones wants to put up to implement a vehicle free Courtenay Place to Lambton Quay. Will Kerry be part of that team or against that team?

Whanganui/Wanganui

The iPredict market beat the NZ Herald by a few hours in predicting Maurice Williamson would today announce that both Wanganui and Whanganui would be official names for the city. CITY.BOTH went up from 25c to 75c before dropping again to 50c. Then after the Herald story, it has increased again to 89c.

Most Traded Stocks

The December petrol price stocks are leading with over 38,000 shares traded. Next was the Manners Malls bus stock with almost 6,000 shares traded in the last week. In third place is the April 2010 OCR stock at 4,600 trades and the 2010 Goff departure stock on 3,700 trades.

BUY OF THE WEEK

OBAMA.DISAP.1MAR pays out $1 if at 1 March 2010, President Obama has a net negative approval rating, according to Real Clear Politics. His rating has fallen from +12% in September to +5% in November and now sits at just +4%. The price has gone up from 22c in early November to 34c over the weekend.

I was short on this stock, but have just purchased stock to cover myself, as I think this stock will increase in value.

SELL OF THE WEEK

UK2010.CON.ABS pays out $1 if the Conservatives win an absolute majority of seats in the 2010 general election. The stock is trading at 67c but pundits may not know that the Conservatives probably have to beat Labour by at least 10% to win an absolute majority and several polls in November had them dip under a 10% lead.

For now this stick is over-priced.

MMP

MMP.RETAIN is at 57c. Every poll out in the last month has shown retaining MMP to have a significant lead, and it is hard to see this changing greatly before the election – at least while we have a relatively stable MMP Government. So I think this stock is a but under priced.

AN EASY RETURN

SNAP.ELECTION.10 pays out $1 if there is a snap election next year. I think there is no realistic chance of this happening and the current price of 11c means a 12% return over a year.

NO WAY BACK

MP.TIZARD has fallen to 17c, presumably on the back of Lynne Pillay announcing she will retire but not until 2011. MP.POWELL remains high at 57c.

IS GOFF A GONER?

DEP.GOFF.2010 pays out $1 if Goff loses the Labour Party leadership in 2010. The price was 19c on 28 November and has risen to 32c on Monday.

MOST TRADED STOCK

AUS.TURNBULL topped the trades at $7,500. Next was the Reserve Bank of Australia stocks on $3,500.

Cheers,

David

Disclosure

David’s current iPredict positions are:

BROWN.RESIGN Short, DEP.GOFF.2010 Short, DEP.KING.2010 Short, DL.KING.09 Short, FASA04.REPEAL Short, GST.UP.JULY10 Short, LEAD.GOFF.09 Short, MAYOR.BROWN Long, MIN.DEPART2.09 Short, MP.ANDERTON Short, MP.PETERS.2011 Short, NAT.JAN10.VLOW Short, NAT.MAORI.09 Short, OCR.INCR.APR10 Short, OCR.INCR.JAN10 Short, OCR.INCR.JUL10 Short, PETERS.LEADER Long, PM.2011.NATIONAL Long, UK2010.CON.ABS Long, UK2010.CON.MAJ Short, ZIM.MUGABE Short

Links to stocks in this commentary: OBAMA.DISAP.1MAR, UK2010.CON.ABS, MMP.RETAIN, SNAP.ELECTION.10, MP.TIZARD, MP.POWELL, DEP.GOFF.2010 , AUS.TURNBULL

My iPredict column:

Whanganui

Does someone out there know something about the outcome of the name for Wanganui City? CITY.BOTH pays out $1 if both Wanganui and Whanganui are declared official names (like Aoraki and Mt Cook). The stock had been at 15c for around six weeks and on Monday started to shoot up to 24c, where it is now today.

Turnbull gone

Malcolm Turnbull lost the leadership of the Australian Liberal Party 41-42, making traders in AUS.TURNBULL very happy. The history of the stock has been interesting – at 40c to 50c up until late November. Then on Friday 27 Nov it went up to 76c. The price then dropped back later in the day to 63c before settling down at 72c. On Monday it climbed to 91c, but dropped back to finish the day at 84c. And then on the day of the leadership vote it traded back at 91c, until the result came out, giving some people a nice quick profit.

Does Brown have momentum?

MAYOR.BROWN will pay out if Len Brown wins Auckland’s top job in 2010. He has been at 30c for around three months and dropped away to 22c on the 15th of November. The stock recovered to 26c and then on the Friday the 27th of November spiked up to 52c. Someone seems confident of Brown. The price has now dropped back but is stable at 34c, up a bit from where it used to be.

Nats thrive in tough times

PM.2011.NATIONAL has been at 66c for some time. Possibly someone heard the Colmar Brunton poll results early as on Saturday it went up to 69c, and since then hit 72c on Monday. This seems to reflect sentiment that if Labour can’t close the gap despite the tough times, the next election is looking safer for National.

Most Traded Stocks

AUS.TURNBULL topped the market with $12,700 of trades. The CONFNOV09 stocks had $16,000 of trades between them, and then the petrol stocks at $6,400.

Cheers,

David

Disclosure

David’s current iPredict positions are:

BROWN.RESIGN Short, CITY.WHANGANUI Long, DEP.GOFF.2010 Short, DEP.KING.2010 Short, DL.KING.09 Short, FASA04.REPEAL Short, GST.UP.JULY10 Short, LEAD.GOFF.09 Short, MAYOR.BROWN Long, MIN.DEPART2.09 Short, MP.ANDERTON Short, MP.PETERS.2011 Short, NAT.JAN10.VLOW Short, NAT.MAORI.09 Short, OBAMA.DISAP.1MAR Short, OCR.INCR.APR10 Short, OCR.INCR.JAN10 Short, OCR.INCR.JUL10 Short, PETERS.LEADER Long, PM.2011.NATIONAL Long, UK2010.CON.ABS Long, UK2010.CON.MAJ Short, ZIM.MUGABE Short

Links to stocks in this commentary: CITY.BOTH, AUS.TURNBULL, MAYOR.BROWN, PM.2011.NATIONAL, AUS.TURNBULL

My iPredict column:

New Obama Stock

OBAMA.DISAP.1MAR pays out if President Obama’s disapprovals outweigh his approvals at 1 March 2010. He currently has an 8% margin – 52% to 44%.

The stock floated at 29c, and has been fairly constant for the last few days at just under 40c.

I am selling this stock. I think Obama’s numbers will still be positive in March. He should have passed his healthcare bill by then, which will give him a boost. Also in early 2010 he will do a state of the union address which traditionally should give him a boost also. Add to that a slowly improving economy.

2010 Polls

The poll stocks have got more complex, with a series of stocks that pay out depending on the level of support for National and Labour in the first Roy Morgan of 2010. NAT.JAN10.VLOW is at 14c and pays out if National polls under 48.5% in that first 2010 poll.

National has not been under 48.5% in the 18 Roy Morgan polls, so I’m selling this one also.

Most Traded Stocks

A lighter week. The petrol stocks had around $8,000 of trading, around $5,500 on the Roy Morgan polls and $3,000 on house prices.

Cheers,

David

Disclosure

David’s current iPredict positions are:

BROWN.RESIGN Short, DEP.GOFF.2010 Short, DEP.KING.2010 Short, DL.KING.09 Short, FASA04.REPEAL Short, GST.UP.JULY10 Short, LEAD.GOFF.09 Short, MAYOR.BROWN Long, MIN.DEPART2.09 Short, MP.ANDERTON Short, MP.PETERS.2011 Short, NAT.JAN10.VLOW Short, NAT.MAORI.09 Short, OBAMA.DISAP.1MAR Short, OCR.INCR.APR10 Short, OCR.INCR.JAN10 Short, OCR.INCR.JUL10 Short, PETERS.LEADER Long, PM.2011.NATIONAL Long, UK2010.CON.ABS Long, UK2010.CON.MAJ Short, ZIM.MUGABE Short

Thanks Dr Bollard

OCR.INCR,APR10 pays out if the Reserve Bank raises the official cash rate before 1 April 2010. I short sold this stock at 30c, and the price up until this morning had reached 71c, with the markets expecting Dr Bollard to change his stance of no increases until the latter half of 2010. I was seriously exposed to making a big loss.

However this morning he announced:

“In contrast to current market pricing, we see no urgency to begin withdrawing monetary policy stimulus, and we expect to keep the OCR at the current level until the second half of 2010.”

This has seen the price fall to 42c, and I think it will fall further. The Governor has been very clear as to his intentions, saying inflation is expected to track within the target range. Now it is possible he may end up moving before July, but I can’t see him doing an increase in or before March 2010.

MMP gaining strength

MMP.RETAIN dropped to 30c the day it launched, before rebounding to 50c. Since then it has steadily increased each day and is now at 60c.

I think that is a bit over-priced for the first referendum. Support for MMP in polls at at around 50% only, and even some supporters of MMP may vote for change at the first referendum to allow STV to be considered.

2010 Departures

DEP.KING.2010 is at 40c and DEP.GOFF.2010 at 30c. I don’t think these stocks will change much more this year, but if Labour’s gap in the polls continues in 2010, I expect they may rise further early next year.

DEP.ENGLISH.2010 remains at 11c with almost no trading, and DEP.KEY.2010 has not sold one share this week, remaining at 5c.

Unemployment

UNEM.DECL.SEP09 is priced at 5c, and it is indeed highly unlikely the unemployment rate will decline in the Sep quarter, even though the economy is technically out of recession.

However UNEM.DECL.DEC09 trading at 15c may be worth risking a purchase. Why? Well in other stocks UNEM.SEP09 is at 68c, representing a projected unemployment rate of 6.8% and UNEM.DEC09 is at 69c, representing a projected unemployment rate of 6.9%.

So the market is saying they expect the unemployment rate in December to be only 0.1% higher than in September. When it is that close, there is a greater than 15% chance, in my opinion, that December 09 may see the unemployment rate fall, and is worth a buy.

Labour

LAB.1NOV09.DN is trading at 59c. Considering the nightmare run of stories about Chris Carter, Rick Barker and others, I think Labour may fall below the 30% they got in the last poll.

Most Traded

The petrol price stocks still dominate the last week, with $14,500 of trades. Next were the Roy Morgan poll stocks with $7,300 traded.

Cheers,

David

Disclosure

David’s current iPredict positions are:

BROWN.RESIGN Short, DEP.GOFF.2010 Short, DEP.KING.2010 Short, DL.KING.09 Short, FASA04.REPEAL Short, GST.UP.JULY10 Short, LEAD.GOFF.09 Short, MAYOR.BROWN Long, MIN.DEPART2.09 Short, MP.ANDERTON Short, MP.PETERS.2011 Short, NAT.MAORI.09 Short, OBAMA.DISAP.4NOV Short, OCR.INCR.APR10 Short, OCR.INCR.JAN10 Short, PETERS.LEADER Long, PM.2011.NATIONAL Long, UK2010.CON.ABS Long, UK2010.CON.MAJ Short, ZIM.MUGABE Short

Links to stocks in this commentary: MMP.RETAIN, DEP.KING.2010, DEP.GOFF.2010, DEP.ENGLISH.2010, DEP.KEY.2010, UNEM.DECL.SEP09, UNEM.DECL.DEC09, UNEM.SEP09, UNEM.DEC09, LAB.1NOV09.DN

This week’s column:

A quick sell

One can make a quick and near guaranteed sell with OBAMA.DISAP.4NOV. You can sell for 4c, which is not much. But it will pay out in just two weeks time so a 4.1% return over two weeks is equal to around 105% return on an annualized basis.

And it is almost risk free as it will be judged on the Real Clear Politics average of the poll on the 4th of November. Now they average the last eight polls, which tend to be over a fortnight or so. So some of the polls just published will count towards that average and they are showing Obama 8% to 10% ahead.

Winston fading

MP.PETERS.2011 peaked in September at 42c. For the last month it has been constant at 30c, but in the last week has dropped to between 22c and 26c. His “tsunami of immigrants” speech failed to generate any movements in the polls, and also attracted little media coverage as the other parties have realized now the trick is to ignore Peters, not respond to him. Hence the market has started to mark down his chances of pulling off a comeback.

Going Going …

Four new stocks this week on whether the National and Labour Leaders and Deputy Leaders will lose their jobs by the end of 2010.

DEP.KEY.2010 is floated at 10c and has reduced to 5c by late yesterday. This is effectively at 0c, as investors know a 5% return over 14 months is less than they could get in a bank.

DEP.ENGLISH.2010 also floated at 10c and didn’t have a single trader yesterday and only one trade today at 10.6c. Traders don’t see a lot of money to be made here.

DEP.GOFF.2010 floated at 12c and early buyers have made a good profit with the price rising to 30c. This seems about right to me, and I’d start selling if it goes much higher.

DEP.KING.2010 also floated at 12c and one buyer (was it Shane Jones?) pushed it up to 74c but now has stabilized at 34c. I think this stock is undervalued and may go a bit higher. Why? King like Goff entered Parliament in the 1980s. While both experienced politicians, if the pressure comes on for fresher faces, it is easier to change the Deputy than the Leader.

Highest Trading Stocks

Kiwis like their petrol price stocks. A whopping $30,000 has been traded in the last week on what the price of petrol will be at the end of October.

Next most traded is OCR.NC.29OCT as people get in last minute trades on whether Bollard will change the official cash rate.

Cheers,

David

Disclosure

David’s current iPredict positions are:

BROWN.RESIGN Short, DEP.GOFF.2010 Short, DEP.KING.2010 Short, DL.KING.09 Short, FASA04.REPEAL Short, GST.UP.JULY10 Short, LEAD.GOFF.09 Short, MAYOR.BROWN Long, MIN.DEPART2.09 Short, MP.ANDERTON Short, MP.PETERS.2011 Short, NAT.MAORI.09 Short, OBAMA.DISAP.4NOV Short, OCR.INCR.APR10 Short, OCR.INCR.JAN10 Short, PETERS.LEADER Long, PM.2011.NATIONAL Long, UK2010.CON.ABS Long, UK2010.CON.MAJ Short, ZIM.MUGABE Short