August 31, 2004 | CBS Market WatchPresident Bush's stock is rising in the markets. Literally. Forward contracts tied to the outcome of the presidential election show that Bush is enjoying a convention boost, even in so-called swing states that could determine who will be the next president. On the Iowa Electronic Markets, a market based at the Tippie School of Business at the University of Iowa, Bush's contract was quoted at $54.30 on Tuesday, compared with $46.30 for Democratic presidential candidate Sen. John Kerry's. Another IEM contract that follows the popular vote showed Bush with a $51.33 last-trade price. Kerry's was quoted at $49.90. During the past four elections, IEM's average forecast error has been about half that of the major polling organizations. Critics say futures markets dealing in nonfinancial commodities are simply online gambling rackets. Markets such as Intrade and TradeSports are located in Europe, where they fall under less regulatory scrutiny. "Those are set up as gambling operations," said TOM RIETZ, an associate professor of finance at the University of Iowa. A version of the story also ran on the website of INVESTOR'S BUSINESS DAILY.
Contact: Tom Rietz