There are some interesting forecasts and betting opportunities in the prediction markets for the U.S. 2008 Presidential nominations.
The leading contenders for Democratic nominee are (probabilities in brackets): Hillary Clinton (51%), Barack Obama (25.2%), and Al Gore (10.4%). Quite likely then, with the Republicans weighed down by the Bush Presidency, the next U.S. Presidential election will be a historical one that results in a woman or black going to the White House for the first time.
Leading contenders for Republican nominee are: Rudy Giuliani (24.3%) Mitt Romney (22.8%) Fred Thompson (24.6%) John McCain (16.2%). McCain was the favorite several months ago, but the growing unpopularity of the Iraq war is taking this pro-war candidate out of the race.
The Republican market would seem to present a reasonably certain chance of making a 25% return. The bet would be to buy the top three contracts in equal proportions. With McCain fading and the long shots unlikely to gain traction given the momentum nature of electoral campaigns, one of Giuliani, Romney, or Thompson will end up with the nomination. Their contract will rise fourfold, leaving a net gain of about 25% after covering off the loss on the two losing contracts.