Electronic market shows potential for historic election

A University of Iowa project which tracks the presidential race using stock trades shows the potential for a unique outcome in November. U-of-I economics professor George Neuman says the “Iowa Electronic Markets” uses two stocks to gauge the race between Democrat Al Gore and Republican George W. Bush. One stock pays out one dollar for each share invested in the eventual winner — and nothing for stock in the loser.Gore leads that market by a margin of 55 to 45. Neuman says the other market pays based on the percentage of the popular vote. For example, stock in a candidate winning 56-percent of the vote would pay 56-cents a share. He says it’s the market most comparable to the polls. That market has been in a virtual dead heat the last four months. Neuman says if the markets are correct, it could be an historic election.The markets indicate a candidate could win enough Electoral College votes to become president, but NOT win the majority of the popular vote. Neuman says the two recent presidential debates have had little influence on the market.The I-E-M is run by the U-of-I Business College. In the past three presidential elections, the I-E-M has picked the winner within two percentage points.