Thursday, February 07, 2008

Intrade market indicates chance of recession in 2008 declined to 65%

Trading on the Intrade Prediction Market indicates a 65.0% chance of a U.S. recession in 2008. That is down modestly (from 70.5%) since the negative ISM Non-Manufacturing report, suggesting that negative sentiment may have peaked in the face of a big Fed rate cut and progress on the fiscal stimulus plan.

I continue to be surprised that punters haven't bid a recession up above 90%, which is what they would do if they were guided by all of the negative media reports, but maybe that suggests that people are being a bit more rational and skeptical of the media than I would have otherwise expected.

We will have to ponder why 35% of punters are so confident that a recession will not occur. I know the reasons for my own rationale, but I am curious what the non-recession punters think.

-- Jack Krupansky

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