Michelle Obama is a big market mover in our US Election betting but Paul Krishnamurty says, if you’re looking to find an outsider instead of Trump and Biden, try this trio…
Both primaries look foregone conclusions and the narrative is set. 2024 will be a rematch of 2020 – Biden v Trump II. But while the betting does indeed signal that match- up in November, there is enough of a gap in the odds to leave room for doubt.
Indeed, the big gamble during January wasn’t for either Trump or Biden, but somebody who isn’t in the race and has consistently said she has no intention of running for office. Michelle Obama’s odds have more than halved in recent weeks, standing at 12.5 today, equivalent to an 8% chance.
This follows a similar gamble on California Governor Gavin Newsom into single figures, but now back out to 38.0. Simply, bettors are looking for an alternative to Biden. Somebody who could be crowned by the Democratic National Committee in an open convention, following Biden’s withdrawal. Or perhaps later, if the 81 year-old is forced out by health issues.
This theory is given extra traction by players on the Republican side. Vivek Ramaswamy repeatedly claimed Obama or somebody else would be shoe-horned in. Bill Mitchell – former Trump influencer turned despairing Ron DeSantis cheerleader – reckons the Democrat process is a sham, designed to lure Republicans into picking their least electable candidate (Trump), and that a superior candidate such as Obama will be selected when it is too late for Republicans to change.
Of course there are also very legitimate reasons to doubt Trump will make it to November. We await a decision from the Supreme Court regarding whether states can remove him from the ballot. He will go on trial for 91 criminal indictments in four cases – the first of which could well be settled before the Republican National Convention in July. Polls show a convicted Trump losing badly. Whilst he is likely to thrash Nikki Haley at the ballot box, in theory the party could think again.
I find it hard to believe either theory will come off but that doesn’t negate trading possibilities. In 2020, Hillary Clinton was gambled down to around 20.0 despite never entering the race. Mike Pence hit around 40.0 when Trump contracted Covid. In 2016, both Biden and Bernie Sanders traded at single figures very late, after the general election ballots had been sent out, when Clinton collapsed at a 9/11 memorial in the extreme Manhattan heat, and again after the email scandal resurfaced
Bettors who took huge odds in those cases were able to cash out with substantial profits when speculation reached fever pitch. There are plenty more examples from US elections where 1000.0 chances have fallen to the low hundreds. The nature of this marathon, with an anarchic news cycle, means trading opportunities galore.
So, rather than backing Obama long after the rumour, it makes more sense to look for would-be candidates at much bigger odds. Then if the speculation does mount, trade out at half or maybe a much lower fraction of the odds. Here’s my idea of the three best such opportunities.
I don’t buy for a second that there is a process in place to remove Biden, but it isn’t an eventuality to be ruled out, given his age and stubbornly dire approvals. But if it happens, I think the Democrats would be plunged into an emergency process, for which they are not prepared.
We could speculate about countless alternatives but, in the absence of a process, the serving Vice President will be in pole position and very hard to dislodge. I can’t envisage Obama being keen to usurp a better qualified black woman. In any case, hypothetical polls among Democrat primary voters always show Harris ahead. For my money, in this theoretical scenario, she’s heavily odds-on to be the nominee.
Therefore, odds of 85.0 could very well shorten up considerably before November. If she is confirmed as the running mate at the convention, her name is on the ballot. The party would not remove her. All it takes is Biden to have a fall, get ill, or merely a conspiracy theory to go viral and those Harris odds would crash, just like the aforementioned examples in the last two elections.
I am definitely open to the idea of Trump being hit by a catastrophe. A conviction and jail sentence is not out of the question. But the market looks completely wrong in regarding Nikki Haley as the default alternative. All signals point to her being trounced in the next few primaries, and Trump’s wing of the party spew out bile at her constantly. Were the party to try and impose her later, Haley would lack all legitimacy.