[Paleopsych] NYT Op-Ed: (Papal Futures) The Smart Money

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The Smart Money
April 12, 2005


    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 [2]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
    to call.

    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: [3]tierney at nytimes.com


    1. http://query.nytimes.com/search/query?ppds=bylL&v1=JOHN%20TIERNEY&fdq=19960101&td=sysdate&sort=newest&ac=JOHN%20TIERNEY&inline=nyt-per
    2. http://www.intrade.com/
    3. mailto:tierney at nytimes.com

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