[Paleopsych] NYT Op-Ed: (Papal Futures) The Smart Money
checker at panix.com
Tue Apr 12 16:30:11 UTC 2005
The Smart Money
April 12, 2005
By JOHN TIERNEY
Do not be fooled by the talking heads in Rome. The journalists
handicapping the papal election may sound as confident as ever,
authoritatively quoting anonymous cardinals and exclusive sources deep
in Opus Dei. But our profession is in trouble. A specter is haunting
the punditocracy - the specter of Intrade.
That's an online futures market, based in Dublin and used by more than
50,000 speculators worldwide who put their money where our mouths are.
They're expected to spend at least $1 million on futures contracts
tied to the election of the pope. And if recent history is any guide,
their collective wisdom could be a lot more valuable than ours.
If you listened to journalists during last year's presidential
campaign, you heard about a tight race with oscillating polls and
shifting momentum. The weekend before the election, we painstakingly
analyzed the battleground states and bravely proclaimed them too close
But if you watched the Intrade market throughout the campaign, you saw
the traders serenely betting on a Bush victory. Most remarkably, the
weekend before the election, the traders correctly called the winner
in every one of the 50 states.
Of course, it's much easier to call Ohio than a conclave of cardinals
who have never been polled and would be excommunicated for joining an
MSNBC focus group. But given the news media's track record, any system
more scientific than scrutinizing the entrails of a sacrificial
chicken could be an improvement.
For now, the Intrade speculators are expecting the white smoke to
signal an Italian pope. The futures contract that pays off in the
event any Italian wins was trading at one point yesterday at 41.9,
which means the traders gave Italy a 41.9 percent chance, followed by
Nigeria at 13. The individual favorite was Dionigi Tettamanzi of
Milan, at 23, followed by Francis Arinze of Nigeria, at 14.
Many of the traders probably know little about Vatican politics and
are basically recreational gamblers, perhaps sentimentally betting on
their local contender. But these amateurs serve a purpose in the
ruthless ecosystem of the market.
They are the sheep who attract the wolves. The amateurs' money entices
serious investors to spend time scouring cardinals' past statements
and other sources. The sheep's money also offers a temptation for
those with inside knowledge to cash in, even though that's against the
rules of Intrade - not to mention a 1591 papal bull forbidding
Catholics from betting on a conclave.
The bull was prompted by rampant betting during previous conclaves. In
1549, the Venetian ambassador tracked the odds with Roman bookies and
reported that "the cardinals' attendants in Conclave" were going
partners with local merchants "in wagers which thus causes many tens
of thousands of scudi to change hands."
The church's ethical standards have improved a bit since the
Renaissance, when one pope had eight illegitimate children and another
got the post by giving electors written promises of promotions. I
don't expect today's cardinals to be smuggling BlackBerries into the
Sistine Chapel and placing trades between votes.
But suppose a venal Vatican bureaucrat, or a secular friend of some
official, hears a piece of useful gossip before or even during the
conclave. Is he going to give it free of charge to a journalist,
knowing this risks compromising himself as well as his source?
Or is he is going to sit down, in the secure privacy of his home, and
make a few profitable clicks on his computer? Maybe that's improbable.
But is it any less fantastic than his calling up one of the reporters
who have been babbling for weeks into a microphone at St. Peter's
The journalist in me hopes he leaks it to us, or at least stays away
from Intrade, thereby keeping everyone in the dark and allowing us to
pontificate unencumbered by actual information. We can theorize that
the Italian delegation is following Karl Rove's strategy of
"solidifying the base." We can ruminate on a third world cardinal
following the Bob Shrum strategy of building a coalition of "the
people against the powerful." Columnists have built careers on less.
So I'm praying, for purely selfish reasons, that Intrade gets this
election wrong. When I consider those thousands of traders working
around the clock, without salaries or health benefits, I hate to think
I'm starting a column just as the job is being outsourced.
E-mail: tierney at nytimes.com
3. mailto:tierney at nytimes.com
More information about the paleopsych