Reporter Backs Kerry But Bets on Bush in IEM

Two weeks after John Kerry's big speech, the Massachusetts senator appears, by all standard political indices, to be doing very well in his bid for the White House. But traders on the Iowa Electronic Markets -- a real-money futures-trading system celebrated for its accuracy in predicting presidential election winners -- aren't buying it. Or, more specifically, traders aren't buying shares of John Kerry futures and are instead favoring shares that will yield a payoff if George Bush wins the race in November. Traders on the IEM don't really care about a theoretical election held today -- they're mainly concerned with how things will play on the actual Election Day, and what happens today matters only if it affects what happens in November. The many and various opinion surveys, the big convention speeches, the pundits' prognostications, the usual summertime speculation that precedes any election: "Our traders pretty much ignore all that," says THOMAS GRUCA, an associate professor of marketing at the University of Iowa and a co-director of the IEM. Betting money on an election focuses the mind, Gruca says, and traders learn to weed out real information from the fluff.