InTrade Raises US Recession Chance to 78%

Mar 21, 2008: 4:26 PM CST

Traders expressing themselves through the InTrade Prediction Market today raised the chance of a US Recession in 2008 up 8% to 78.5%.

The way the market works is that traders invest real money and buy contracts that allow them to express their opinion. Here is a quick explanation:

If you’re interested in seeing the lifetime contract percentages of this particular item, here is a chart below:

This means that, in aggregate, people are expressing their opinions by using real money in anticipation to profit from their views, and whether their views match reality or not.

As with the stock market, an overabundance of buyers will push the contract higher and vice versa. If you feel we’re headed into a recession, you could make some quick money by betting on this idea (or lose money if we don’t!).

On an unrelated note, InTrade participants also currently give Barack Obama an 80% chance of winning the Democratic Nomination against Hillary Clinton’s 20% chance.

If you think Hillary will win, you could stand to win $80 per 10 contracts you buy for a risk of $20.

I like to use the service to watch as current events are reflected virtually instantly into the ‘prediction’ price, which filters much quicker than standard polls or surveys.

Either way, it’s an interesting service and you may want to keep an eye on these markets (percentages) if you’re unfamiliar with them.


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