Categories
politicalbetting.com » Blog Archive » This Bloomberg reports on the referendum, polling and the hedg
politicalbetting.com » Blog Archive » This Bloomberg reports on the referendum, polling and the hedge funds is a must read
How the Betfair Brexit market moved on June 23/24 2016. Data/chart from @betdatapolitics pic.twitter.com/5c0FjJCKxv
0
This discussion has been closed.
Comments
No doubt we'd be reading stories now of how people made a fortune off the remain vote if ti had come in.
And this is news ?
Weren't Survation one of the pollsters that had had Leave winning in the polls running up to the vote, and even when they had Remain ahead it was very very close. And the city firms commissioned an infamous poll that was massively out and other polls were also wrong.
So it isn't as if Survation had Remain winning by 10 all the way throughout the campaign, then this super secret, they are Farage's mate, poll was all of a suddenly bang on.
Seems to me more one firm got it right, while the wisdom of polling crowds failed, kinda of like the GE.
And then Newcastle and Sunderland announced real votes just after midnight although the trend at those counts was being reported by the BBC via Laura K for a good half hour before - and everything changed.
It's called being quick off the mark if you made money.
You just need to watch the ITV and BBC coverage to see how expectations changed between 10pm and Sunderland.
"Boulton jumped straight in with a huge exclusive, declaring he had breaking news. Nigel Farage, the global face of the Brexit campaign, had given Sky what sounded like a concession.
The news pushed the U.K.’s currency up—herding investors toward a cliff hours ahead of one of the largest crashes for any major currency since the birth of the modern global financial system. Trillions of dollars in asset values would be wiped off the books, but not just yet.
Some hedge funds gained confidence, through private exit polls, that most Britons had voted to leave the EU, or that the vote was far closer than the public believed—knowledge pollsters provided while voting was still underway and hours ahead of official tallies. These hedge funds were in the perfect position to earn fortunes by short selling the British pound.
The organizations grew so close that Survation once based its phone operators in UKIP headquarters, according to a knowledgeable source, and Lyons-Lowe became a friend and key adviser to Farage.
The published accounts differ, but both say that Farage had learned the results of an unidentified, financial-services exit poll well before the polls closed at 10 p.m. These accounts also say that Farage learned the results before giving his concession statement to Sky at roughly 9:40 p.m., which the network then aired within seconds of the polls closing at 10 p.m."
The Populus poll was released in the afternoon.
The Ipsos MORI/GFK exit poll that is used at general elections wasn't used this time because Ipsos MORI/GFK thought it would be impossible to conduct an exit poll for the referendum (and didn't have the time to prepare for it)
Now some pollsters were spinning their polls as exit polls, when they were in fact on the day polls without the nous and detail of the proper exit poll.
https://dominiccummings.com/2018/06/11/on-the-referendum-27-banks-russia-conspiracies-and-vote-leave/
Because sure as night follows day there'll have been as many of those as the shorters.
https://twitter.com/Pulpstar/status/1011242851160731648
Foxtons down from 90p to 50p since the start of the year too. Transactions all but seized up in the housing market methinks.
https://tinyurl.com/y8g5x7xf
Heart of stone etc.
If you look at the boards of Sale/Sold signs near you and check the actual company then at least one of them will be Countrywide. You'll never see Countrywide on a Sale board itself I think.
Their market share is big.
Even Prof. Minford agrees there has been 1.2% of GDP cost so far.
Take it or leave it.
https://www.bloomberg.com/news/articles/2018-06-18/vw-executive-tally-in-vw-dieselgate-grows-with-stadler-arrest
Of course today's new builds become second hand stock like the rest of the market so if there is any downturn I'd have thought those buying the newbuilds will have the worst equity situation compared to the general market.
Early Monday, Trump declared on Twitter: “The Red Hen Restaurant should focus more on cleaning its filthy canopies, doors and windows (badly needs a paint job) rather than refusing to serve a fine person like Sarah Huckabee Sanders.”
As Brexit is mainly perceived to be a rightist political phenomenon there may have been some people who were reluctant to tell pollsters their true intention for fear of being associated, even in a remote way, with an evil.
So I recon some people who were going to vote Leave actually told pollsters that they hadn't made up their mind when they had and some others said that they would vote Remain and then didn't bother.
Remain campaigners took these late polls at face value, they had already made the mistake of running an almost entirely negative campaign, 'project fear' and they didn't hold back in closing days, those last few days tempted nobody into the remain camp but it did help secure the victory for Leave.
Advertising men of the old school will tell you that it's far harder to sell a negative than it is a positive because more people are (or want to be) optimistic than pessimistic.
https://edition.cnn.com/2018/06/24/politics/melania-trump-sadd-conference/index.html
Even if Farage had seen a private poll that put Leave ahead, he would have had no reason to believe it was any more accurate than the polls which had been published. 2 of the final polls put Leave ahead, 8 put Remain ahead.
As @TSE points out, there was no official exit poll. There was no survey that anyone had access to that was bound to be more accurate than the surveys that had been published. Nor is there any reason to believe that pollsters were sharing data with their clients that differed from the published numbers.
The reason why some people made a killing on the Leave vote was because the weight of sentiment among those with money to bet greatly favoured Remain. Stupid odds were being offered to those who wanted to bet for Leave. Foreign exchange traders were doing the same thing by shorting sterling.
Maybe if there was something more than circumstantial evidence....
See chart 4A in this PDF.
I reckon that's a fair assessment.
“Electric VW shatters Pike’s Peak hill climb record”
https://www.pistonheads.com/news/general-pistonheads/vw-shatters-pikes-peak-record/38250
https://order-order.com/2018/06/25/corbyn-snub-armed-forces-day-celebrations/
The more likely answer to "if this happened then why are UKIP skint", is: it didn't happen.
- Hedge funds are reported to have commissioned their own private polls, and worked with pollsters and academics to set up models which would allow them to predict the outcome as results came in. There's absolutely nothing wrong with that: even in the Alice-In-Wonderland world of financial regulation, you are still allowed to do your own research! Indeed PB's very own AndyJS helped make some of us decent profits as results came in with his excellent model of the 'par' results by area.
- Completely separately from that legitimate using of polling, Bloomberg seem to be alleging that some pollsters may have given hedge funds advance information on polls which were going to be released publicly, and which on release would move the markets, thus allowing the funds to make very profits on the short-term jumps when the polls were released. That's a pretty incendiary allegation, and would almost certainly be illegal market manipulation if true. (Be careful discussing this - some of the allegations could be libellous).
Of course hung Parliament GE 2017 was even better
FTSE100 over 2% down. So is the DAX.
https://www.bbc.co.uk/news/topics/c9qdqqkgz27t/ftse-100
There is no doubt that knowledge of the poll would have constituted material non-public information, but then so also would the hedge funds which commissioned the polls in the first place have been in possession of such information . The shorts would have constituted insider dealing but the complicating factor is that they hedgies paid for the information and that presumably was not illegal.
@Cyclefree?
Hedge funds commission research and polls all the time: that is work they have done, and it's allowed. It's not clear to me why this would be different.
Furthermore, IIRC "inside" information is very tightly defined. So (to use a video game example), if you heard from a guy in the pub who said he worked for Rockstar as a tester, that the new GTA was not very good, then that wouldn't constitute inside information. But if you heard from the CFO that, because of the quality of the game, that they anticipated sales wouldn't be very good, then that would constitute inside information.
Polling was, and is, never all that reliable and has particular uncertainties when it's a one-off event like a referendum, with an unknowable turnout.
https://labourlist.org/2018/06/open-labour-unanimously-backs-full-debate-on-brexit-at-party-conference/
If the vote had gone for Remain then I would have thought that a "victory" declaration early on would have helped to establish the idea in some people's minds that the victory for Leave had in some way been robbed from them. And with the result going for Leave he gets to be lauded for his good judgement.
As it is, didn't he just look like a prat?
If it costs £1m to discover that there is a certain outcome in the polls, then does the payment have any bearing on it.
As mentioned in my post above, I can't believe that the polling companies would undertake research for a hedge fund in the knowledge that any action taken would constitute insider dealing.
That said, if Nige did know the polling results (and forget the many polls previously which suggested a Leave victory, as others have pointed out) and then made his comments at 10.01pm....that somehow fails the smell test.
Rather reminiscent of those Observer articles from a couple of months ago that discussed Cambridge Analytica and the Vote Leave campaign, being very careful to avoid explicitly saying that there was a contractual or financial relationship between the two organisations
The yearly pattern looks worrying. A double top. Could go down to 6900 in a few days - nearly a 10% drop. Could be painful for those with investments on margin.
https://www.bbc.co.uk/news/topics/c9qdqqkgz27t/ftse-100
Choose 1yr view.
Yes, it will go up again eventually.