Sunday, February 28, 2016

Will Trump sink the Republican Party? Let's check the markets...

As the political world adjusts to the new reality that Donald Trump will probably be the Republican nominee, we might start to ask what that means for the general election.  Will Trump sink the GOP?  He has been endorsed by former KKK leader David Duke, and this morning, he couldn't bring himself to disavow Duke.  This is the kind of thing that might make the GOP nervous.

So, I headed over to the prediction markets, and asked a simple question.  Is there a clear relationship between estimates of the Democrats' chances to retain the White House and the probability of Trump getting the Republican nomination? Head on over to PredictWise yourself and check it out.

Trump was given around a 25% chance of getting the nomination around January 1.  Today, it is up near 80%.  Now, look at estimates of the Democrats' chances of holding the White House.  During that same period, the Democrats' chances have held steady at just north of 60%.  That's interesting.  As Trump's probability of winning has gone from an estimated 25% chance to an 80% chance, the probability of the Democrats retaining the White House hasn't budged.  Maybe Trump isn't toxic for the general election.  Or, maybe the markets just haven't clued in yet.  For now, it's just interesting to note.

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