It’s time to take a punt on politics
The quick changes in the political landscape offer opportunities for spreadbetters, says Chris Shillington
A week is a long time in politics, as Harold Wilson said, but the few minutes it takes to read a 1,000 word article can also be a significant period. Especially if the article in question is one written by foreign secretary David Miliband last week which was widely seen as the start of a leadership bid.
The increasingly conspicuous Miliband raised the pressure (and hackles) in number 10 with his positioning. It also set the political betting prices moving.
Now, anybody who is thinking of betting on politics ought to be aware of a special feature of these markets: the concept of over-correction. This is even more vital when we are looking at spreads than fixed-odds.
Over-correction is the phenomenon where a price plummets or soars following a news story. Reactions are often extreme, and things can settle down later, but it does mean that you can get some spectacular prices.
Grim Numbers
In the last two weeks, when Gordon Brown has been under intense pressure, the numbers have been looking ever grimmer for him. IG Sport’s Labour – Next General Election Seats spread looks at how many seats each party will win the next time the country goers to the polls, and over the past fortnight has fallen from 240-246 to 230-236.
(As always with spread betting you should buy if you think the government will win more than 236 seats at the next General Election and sell if you think they will win fewer.)
To put that number into context, Labour won 355 in the 2005 General Election to the Conservatives 197 and the Lib Dems 62.
This leads us inevitably to the question of the Prime Minister’s tenure at number 10. With a general election presumably scheduled for 2010 (4/9 with Bet Direct) then Brown will most likely lead his party into battle if he can hold out to June next year when any potential attempts to overthrow attempts should abate.
Big If
If that happens, Brown steadies the ship and starts to batter Conservative leader David Cameron at the dispatch box, then it is likely that the projected number of Labour seats would rise. Of course, that’s a big if.
As for the Tories, the Conservative Next Election Seats price is 342-348 at IG Sport – in a different league to the 197 that they won in 2005. In case you’re asking (and you probably aren’t), the Lib Dems are 46- 49 after a better than expected 62 in 2005.
However if you are of the opinion that David Miliband will be successful in usurping Brown then one assumes that the new life he would breath into the next election campaign would surely impact both positively on the Labour seats price and negatively on the Tories’ price.
If he or any other aggressor is unsuccessful then Brown and the party’s position should also solidify with the knowledge that the PM remains a political heavyweight and an experienced campaigner. If he is secure in his leadership and has a proper tilt at the election, the number could change significantly.
At present the likes of extra bet and Ladbrokes are 1/4 about a Conservative win and Coral are as big as 3/1 about a Labour win.
Prices like that normally don’t lie and it would be difficult to make a case for getting involved in them. The spreadbets, on the other hand, give a lot more scope for making money from a political landscape that is likely to change quickly and dramatically before 2010.
All is not lost for Labour but the next few months we will see exactly how strong the Prime Minster’s hold on the party is. Watch those numbers closely.