Romney's VP stock skyrockets

To continue with the other day's topic of prediction markets and what they have to say about the veepstakes, Mitt Romney's stock just recently shot up to way over 50 cents on the dollar. Right before Obama's announcement, Romney was trading on Intrade at about 25. At the moment, the last trade was at 62.2. Considering there's nothing in the news about Romney to propel his stock, it must have been something about Obama's pick that made the markets all of the sudden go crazy over Romney.

What do the prediction markets know that pollsters don't?

Sorry to bring up something as profane and childish as electoral politics here (normally I try to hold myself above the usual CNN Airport Network fare), but I've noticed that despite the fact that the polls are showing Obama and McCain in a statistical dead heat, the prediction markets are still betting on Obama by a fairly wide margin. National polls show Obama's lead over McCain narrowing to between 2 and 5 percentage points, but contracts that pay $1.00 if Obama wins are going for about $0.60 on Intrade. It's possible that the polls show the individual state contests playing out so that Obama is way over McCain in the electoral college vote, but I doubt it – seems more likely that the bettors think they know better than the pollsters. And though the polls were taken before McCain's statement about not knowing how many houses he owns, the prediction markets have been at 60% for Obama for a while now. And before you blame immature and small markets for the discrepancy, note that betting volumes are much higher than they were in 2004.

And for those interested in what the markets have to say about Obama's vice presidential pick, Joe Biden's contract is trading at 41.4, Evan Bayh's at 24.2, Tim Kaine's at 12.0, Wesley Clark's at 8.7, and Senator Clinton's at a lowly 12.0. On the Republican side, Pawlenty and Romney are tied at about 25 each.

Tibet protests a reaction to meat prices?

In an article from AsianWeek about the roots of the discord in Tibet, the author puts forth the thesis that the agrarian nature of Tibet has clashed with rising demand for meat and grains worldwide. Raising livestock across the fertile Tibetan Plateau is the primary economic activity of Tibet, and China's voracious appetite for meat means that controlling the fertile lands of Tibet is important to the Chinese Communist Party as a means of controlling food prices, which if left unchecked could engender discontent among China's billions. Prices for meat are already highly distorted thanks to Western countries' farm subsidies, transportation subsidies, and ethanol subsidies, and the Chinese economy is hobbled by the remnants of a socialism.

It's no wonder that these two highly anti-market forces would conspire to oppress the average Tibetan, who is at the mercy of Beijing thanks to the lopsided economic outcome of the Communist Party's foray into pseudo-capitalism. It also explains the attacks on noodle shops in Tibet as a form of protest:

Tibetans were buying a leg of lamb for the price of a whole animal, and few would ever stop to consider the inflated price of fuel and truck leasing for the Muslim middleman. In the first day of the Lhasa riots, most of the casualties of arson were Hui Muslim noodle restaurant workers, who migrated to the newly prosperous provincial capital over the past decade — just as Mexican immigrants have gone to major cities to work as dishwashers.

And in other, slightly-related news, on Intrade, futures in any EU country officially boycotting the Olympics are trading at 45%.