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politicalbetting.com » Blog Archive » Why the markets are bullish about the Tories’ chances
If the polls are to be believed, Labour is on course for a comfortable victory in 2015. As Mike has pointed out in several related posts over the last few weeks, the voters who backed the Lib Dems in 2010 and have since switched to Labour seem firm in their intention and are more likely to vote than the average. Add in the effect of UKIP and the fact that Labour needs a much smaller lead over t…
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My view would be that people who bet on politics enjoy the process and the detail of the game. The idea that a large chunk of voters would shift to Labour - which effectively has given them their stable 37-40 share (and hence the strength of their position) simple *because* of the formation of the coalition sticks in the craw somewhat: no willingness to give the Coalition the chance to prove themselves or to see whether the Lib Dems could moderate the baby-eating Tories (perhaps only to an arm and a leg?). Just a viscarel reaction.
If the 2015 election was determined as simply as this, it means that all the political strategising and analysis that has gone on since them was pointless. But because "experts" like to think they are more sophisticated then there is probably a bias to assuming that the simple answer is wrong.
Never knowingly undersold .....
One might ask how these Tory gamblers became rich.
Probably not by following the polls.
Jack W will know.
It would be a brave punter to pick between these two heavyweight tag teams!
Oh dear .....
Perhaps the next election would be a good one for the Tories to lose, giving them a chance to weed out their "wets" and go into subsequent elections on a hard-right tax-cutting anti-welfare agenda in the knowledge that a minority Labour administration would quickly become so unpopular that the Tories could get in even if they promised to eat every baby in England.
And if their employers' risk control procedures turned out to be wholly ineffective, there is always the poor old taxpayer to bail them out.
OGH and "tim" in lycra one piece - Team Moderated
JackW and Rod sporting swingback tartan capes - Team Hung (Parliament) .... Oh er missus ...
Have a guess when their general election is due.
The current OBR EFO states the future fiscal path quite clearly:
Our forecast implies that the UK’s budget deficit will have fallen by 11.1 per cent of GDP over the nine years from 2009-10 (around £180 billion in today’s terms). Around 80 per cent of the reduction is accounted for by lower public spending. This will take government consumption of goods and services – a rough proxy for day-to-day spending on public services and administration – to its smallest share of national income at least since 1948, when comparable National Accounts data are first available. The remaining 20 per cent of the drop in borrowing is accounted for by higher receipts, with the majority having taken place by 2012-13, largely as result of rises in the standard rate of VAT.
The babies have already been ordered. All that remains is to choose the right sauces and pickles to assist digestion.
In that case, and if, as I still suspect, Clegg goes at the same time, it's quite likely that a lot of the "former" LibDems will return to the fold, reducing Labours overall lead.
Are you saying that the Conservatives will not have done enough on the economy to persuade you?
Or that you are not persuaded that success on the economy will be enough for the Tories to secure a majority?
It may well be enough to secure them a similar seat tally to the one they currently enjoy.
Mind you my point also applies to Miliband in opposition.
Personally I think a Miliband govt with a small working majority is the most likely outcome, but Observers of Jacks ARSE are usually right, so I would not put much stake on Miliband yet. The Tories have the wind in their sails, and Labour have an underwhelming front bench of discredited dullards with a blank sheet of paper. Electing a Miliband govt would be stupid, but I have been alive long enough to notice that just because something is predictably stupid does not mean that it won't happen. Jacks ARSE may not be producing anything substantial this time.
Their appears very little up-side to the parties splitting months before an election. They'll both want to take full credit for the economic recovery to the very last days of the campaign whilst differentiating themselves by their manifestos and the cut and thrust of the campaign.
Polls at present are interesting but given so much is going to happen in the next 18 months let alone things which are not even presently on the radar, guessing the outcome of GE2015 is a brave pastime for anyone other than those who fully understand how odds and betting work. Betting doesn't interest me. It is the politics which brings me to this site. I look forward to the London centric chatterati getting egg on their collective noses once again as they fail to see what is happening beyond Islington chianti circles and the M25.
The Mail and Murdoch empire are both independently capable of creating a frenzy around election time around any issue,imagined or real,as they did in South Shields and Eastleigh by-elections.
And Crosby will pick a dividing issue closer to the election to ram home his message.
The trick for Labour is to consolidate some of this support with clear direction of travel,if not policy to guard against the oncoming storm.
But we still have to account for the Lib Dems, (post referendum defeat) Scot Nats and UKIP anyone one of which alone could tilt the balance.
I am minded of the old student trick of placing a kipper on the engine of a parting friend's car. It can make for a very unpleasant journey.
The voters need to start thinking who'll they'll feel better off with.
This is the 1992 scenario come again. The punters didn't much like the medicine but preferred the dull Doctor they knew rather than the silver tongued witch doctor they'd flirted with.
May I also address AveryLPs contention that "the babies have already been ordered. All that remains is to choose the right sauces and pickles to assist digestion"? It is probably easier to understand this by asking: "what will the A-level history students of 50 or 100 years time be saying about this?"
I think they will make very little reference to partisan politics, arguing instead that the sacrifices of two world wars created a unique opportunity for the introduction of welfarism, in terms of social solidarity and the sense that "we" had done a lot for "them" and now "they" should do something for "us". But the beneficiaries were of course the "baby boomers" (of whom there are a fair few on this site, including OGH and myself) who - though we assuredly don't feel that way - have led privileged (and all too often relatively useless) lives. The other reason for the collapse of welfarism is that it requires a degree of social solidarity that can only be found in ethnically homogenous societies. The irony is of course is that white people were very willing to take out from the welfare state but a good deal less willing to put into it in terms of cleaning hospital floors and so forth. So projects like the NHS contained the seeds of their own eventual destruction.
One remembers budget 2012 as Tory ratings went down pretty rapidly as the right wing papers turned against them.
1. Fund Managers (which encompasses both traditional long-only managers, and hedge fund managers)
2. Traders at Investment Banks
The average 'life expectancy' in fund management is something like three and a half years. Those that got it wrong - and who didn't have a long track record to rely on - have all lost their jobs. Sure, most will have been replaced by younger fodder who have yet to make their mistakes. And, of course, many who lose their jobs will be able to either trade down to a less prestigous organisation, or a smaller job (analyst rather than fund manager). But still, those for whom the trend 'was not their friend' are not doing the same thing they were doing five years ago.
I don't know what the average 'life expectancy' of a trader at Goldman Sachs is. However, all the big investment banks have been cutting their in-house trading operations, as the regulatory authorities are demanding banks keep much more capital to cover potential trading losses. (Capital is expensive - the cost of equity at Goldman is probably 10%, so the blended average cost of capital is probably 7 or 8% for an vanilla equity trader, and higher for someone in derivatives.) Across the City (and New York too), the number of proprietary traders has probably dropped by at least 30% in the last five years, and probably a lot more.
I think Miliband is like Wilsonas leader, a shrewd tactition politically, but with little clear strategy, obssessed by internal enemies. Wilson did win 4 elections, but his governments were not notable for their successes. Wilson also was a better media performer and had the common touch.
The problem for 2015 is that Cameron is not blamed for the current mess, so cannot bring Conservative supporters back by stepping down. Clegg can, since LibDems blame him for reneging on manifesto promises in order to prop up the conservatives, so maybe Cameron's best tactic for Tory victory is to agree a pact where both leaders resign.
And once the Prime Minister has read the previous thread, he might be wondering who can replace Michael Gove, in hope of recapturing teachers' votes. This has already worked in health, where Jeremy Hunt is seen as less antagonistic and divisive than Andrew Lansley.
An interesting piece, and a slightly off-hand dismissal from Mr. Smithson, I felt.
However, it's also interesting to recall the eye-bending picture yesterday which suggested that political opinions outweight mathematical reality when it comes to assessing situations. Perhaps we need to find a small panel of people who are intellectually sound but at the same time completely disinterested in politics. It would be interesting to see if they provide a useful guide (and to compare against the premise of this site, which is an objective, betting-led approach to political predictions).
Today's wars are not being fought with machine guns and tanks. They are global trade wars.
The Tommies of 2014 are threatened by loss of their jobs and self respect, not their lives.
This will have political consequences but not in a common cause justified by a lost generation. The effect will be polarising rather than unifying.
But back to 2015 election politics.
The OBR projection of the current government's fiscal plans is not predicting the end of welfarism. There will certainly be casualties, but social benefits, health and education will not be among them. Spend on such 'welfare' will be the among the only services to retain their share of GDP.
The Cameroons are misunderstood. They are not so much eating babies as poking them with their forks while breastfeeding.
Because - as you rightly say - we are fighting and badly losing a global trade war. And as you also rightly say the effect will be polarising. Indeed, a minority Miliband government will quickly find itself at 20-25% in the polls as race replaces class as the primary source of political division.
Having said that, Edmund's point about RichardN's case that the odds for individual seats is out of line with the odds for the totals as a whole is right.
I am not persuaded by your argument that race will replace class as the primary source of political division. One of the benefits of globalism, free movement of labour and immigration is that over the medium to long term, it has the potential to reduce racial tension. It is easy to demonise Romanians from the distance and comfort of one's home but when the Romanian becomes your neighbour or work colleague such hatred is exorcised.
Class distinctions will persist, and may even for short periods become co-aligned with race, but the persisting result of globalisation will be the creation of new classes based on economic losers and winners.
On university education and pensions (and railway season tickets and household energy prices etc), matching funding to use is an unavoidable response to heightened global competition and reduced economic strength. It is also the 'right' answer. But the contract with the contributors must require the government to compensate for the burden by radically reducing the share of national output taken by its other services. Making students pay for the social and economic advantage of obtaining their degrees is only reasonable if the 'savings' made are not replaced with additional expenditure.
http://www.ft.com/cms/s/0/736d33cc-69cb-11e3-89ce-00144feabdc0.html?siteedition=uk#axzz2pMSTYlLC
"Given that so few saw the recovery coming, forecasting its political implications would be a roll of the dice. But one thing is becoming clearer: if the economy continues to improve, Labour will either lose next year’s general election or defy history. Precedent holds that no party can win an election without the trust of voters on the question of either leadership or economic management. Labour trails the Conservatives on both counts."
"So the real question is whether 2015 will be a conventional election, in which case the Tories will probably at least end up as the largest party in a hung parliament, or whether it is the first to take place in a new kind of polity where leadership and economic competence are neither necessary nor sufficient to get elected. In other words, the decisive variable is not the politicians up for election, but politics itself."
As usual, it's a very smart article by Mr Ganesh. Since the four most expensive words in English are "This time it's different", I'm not expecting a new kind of polity. It's an article that all should read.
http://www.itv.com/news/2014-01-03/china-japan-liu-xiaoming/
Basically, he described Japan as being like Lord Voldemort and Nazi Germany. In a less tabloid line, he also said that whilst China was pacifist it would retaliate if attacked.
The new leader of China, whose name escapes me (Deng Xiaoping, maybe?) was said to be interested in building up China's military, and that certainly seems to be occurring. It's also worth mentioning that Japan and China are the 3rd and 2nd largest economies in the world, respectively. Any war could be rather serious.
However, China's also making a land (sea?) grab in South Asia, effectively stealing by threat of force land (rich in resources) from the poorer, weaker island nations there. I'm not sure if the disputed islands between China and Japan have any resources, or if they're simply a matter of pride for both sides.
Hmmm. In 1950 under 20,000 people got a degree. In 2011 that was 350,000. The number of higher degrees increased from 2,500 to nearly 200,000.
So you're wrong, unless you have a very odd definition of 'ordinary' people.
Labour wanted half of young people to go to university. They never quite managed it, but you cannot have such a massive increase and keep the same funding model. Something had to give, as Labour showed when they first introduced tuition fees.
There is nothing to suggest in the polls or in recent council or by-election performance that the Tories are going to gain seats in 2015. In 1992, the last Tory majority, the Tories held Eastleigh. There is no sign whatsoever of that happening. Meanwhile, there is every sign that the Tories will lose marginal seats to Labour.
At present, it looks likely that in 2015 the Tories will fall back. The key questions are...
* How far will the Tories fall back? (Can they still be the largest party?)
* Will a Lib-Dem collapse stem/reverse the tide?
And then...
* What governing options are possible?
Even within the Conservative Party, there was a strong lobby for a graduate tax rather than loans (the main drawback being the word "tax").
For the tories to remain in power they need to win more seats in 2015 than in 2010. And that looks incredibly unlikely...
http://www1.politicalbetting.com/index.php/archives/2013/03/09/are-those-green-shoots/
Following on Ganesh's logic, perhaps those of us who did might be given a little credit in our take on the effects for 2015 beyond 'wishful thinking'.
If someone makes the equivalent of £20k per year then taxing them extra on the basis of their degree giving them more earning potential seems unfair. And what if someone moves abroad and earns the equivalent of £300k?
David, I think you can add some other factors. One of the main ones is something you hinted at re. Swingback and churn. The reason there has been so little this time is that there is no Election speculation. No one cares at all about the General Election because there is no speculation that it will happen. In previous parliaments at this time there would have been endless speculation by now as to whether Cameron would call a 2014 spring election, and with that comes the sharpening of people's voting intention. With a fixed term parliament not only is everyone utterly bored by politics, they are also unfocused about an election.
It certainly isn't wishful thinking to think the Conservatives will win. Labour are not in a strong position for an Opposition and in many ways all the cards, including the incumbency factor, lie with Cameron. With a surging economy and evidence of a catch-up in perception of well-being this is rapidly looking like an odds-on election for the Conservatives to win.
Labour are far from dominant.
The Tories look a bit tired. Far from extending their reach, they seem to be taking a defensive strategy to minimise losses.
Blair/Major could do that defending a three figure majority. Cameron does not have that luxury.
I would rather live in an Independent Scotland run by the SNP than a UK ripped apart once more by an incompetent Labour government. Gordon Brown wrecked my retirement plans, Ed Miliband would probably wreck what's left of my working life.
1) Ed Miliband is wonkier than a rickety fence next to a sinkhole
2) The Scottish situation will either have a small or a colossal impact
3) We have the first coalition for decades which may well lead to weird results here and there
4) Like a talented dancer, UKIP are climbing the polls with ease but it remains to be seen if they'll end up sliding down again as the General Election comes
5) The eurozone crisis isn't resolved. It can't be. It remains to be seen when the next flare up will be, and the impact in both economic and political terms.
It may no longer be a job ticket but self-financing is likely to lead to higher levels of application and a more determined alignment of degree choice to employment prospects. People spending their own money tend to be more demanding of value.
rear passage bell just rung, Excuse me a moment ....
I also think the economy will have the biggest impact on voting intentions. Given Vince Cable's musings recently, I suspect the economy is going to improve considerably over the next 12 months. Cable doesn't appear happy with the prospect and any improvement seems to be matched by his spite about it. He strikes me as a man seriously disturbed by the prospect of the Tories doing well at GE2015 and almost openly hostile to it.
As I remember it - though I could be wrong - the Tories were ahead on leadership and the economy in 2010, but failed to get an overall majority.
To me, it remains very difficult to see beyond another inconclusive outcome. I cannot for the life of me decide who'll be the biggest party. What I am almost certain of, though, is that Labour's vote share will increase outside Scotland.
No longer is manufacturing in China a sure fire way for a business to get its costs down. In the US, thanks to low gas and electricity (and even low oil, although that is I suspect transient) prices, energy intensive manufacturing is coming back on-shore. It's simply not sensible to build in China, where wage and electricity costs are rising (and so is staff turnover). Apple makes the Mac Pro in the US.
We see this in many areas: ten years ago, China was going to be the hub of semiconductor contract manufacturing. But Taiwan (TSMC) and soon Intel in the US, are hammering them - despite the 10s of billions invested in new chip fabrication plants. Between 2011 and 2012, exports fell from 29% to 27% of Chinese GDP. Exports now make a smaller contribution to China's economy than they do Spain's or the UK.
If we pursue moderately sensible policies in the UK (Germany is a good model, here), then we can start to develop a moderately successful mixed economy here. What we should not do is randomly panic and start flailing around.
The punters have a subtler appreciation of the probabilities than the polls at this stage.
There may be a smidgeon of value in Labour's price but I wouldn't commit large sums at the moment. The Euros should give us a good steer. I'll be holding back until then.
That makes the swingback theory difficult, since there hasn't been much other swing to go back. As David says, the other swing has been to UKIP, and Cameron is clearly trying to get some of that, but they are on the whole tough cookies (many of them former non-voters who think we all suck) and not easy to seduce.
What is underpinning the Tory hopes is the belief that the economy will recover steadily and voters will attribute this to their management and think they'd better stick to it. Both parts of this look like wishful thinking - the recovery is clearly happening but will be bumpy, and voters seem unwilling to credit the Government with having had much to do with it, and if anything are irritated by the vainglorious claims from Number 11 and over-enthusiastic local MPs. The impression that there is a wonderful party going on to which one hasn't been invited is not appealing.
I'm all for bright ideas, but Labour have said nothing to me to suggest they have a clever way out of the deficit/debt calamity. Most of us became vastly better off between 1997-2007 (me particularly so, being young and buying a three-bedroom house for £40k) because of the availability of cheap borrowing. The drying up of that money has meant a struggle across the board, probably a 10-year struggle. And my overriding opinion of the whole debt crisis is that a) I was the one who benefited from cheap borrowing so b) I should be the one who suffers during the downturn.
I do not accept that we can borrow now and push the 'cost of living' problems on to the next generation. And I do not accept that borrowing now would improve the cost of living for the next generation.
And this - I think - is what Ed Miliband is angling at and arguing for.
I know he has a difficult circle to square, needing to issue a resonant, hopeful message to voters, and to please the unions (a horribly difficult tax) when he knows in his heart of hearts that there is no money available, and that the deficit/debt problems he'll face, if elected, will still be gigantic.
http://www.washingtonpost.com/blogs/worldviews/wp/2014/01/03/no-kim-jong-un-probably-didnt-feed-his-uncle-to-120-hungry-dogs/
I guess the correct answer is "Report it with lots of caveats about the source." If we discount unbelievably horrific stories altogether we miss the worst cases (Nazi concentrations camps, Pol Pot, etc.). If we report them all as apparent fact we devalue the medium and dull the senses of readers. But cautious reporting is seen as so last century...
No, the main drawback really was the word tax.
Universities like the current system because they get big wodges of cash up front to invest in laboratories, research fellowships and record salaries for vice-chancellors. A future government might want to run down universities and spend the graduate tax income on, well, anything else.
Whether the fees and loans system is ideal for the rest of us, even in crude financial terms, is less clear.
More seriously, injuries permitting I'd expect to see Cook, Bell, Root, Stokes, Prior and Broad line up for the first test of the summer. Pietersen will be there too if he has not decided to throw in his lot with the IPL. So four places at least - a spinner, a quick and two batters - up for grabs.
:its-hassel-time:
http://www.totalpolitics.com/articles/428352/ming-campbell-crossing-the-finishing-line.thtml
We in Britain should look to Germany where manufacturing and engineering are still prized (and even to India to see why they can make cars here when British companies could not). Also to the United States to look at entrepreneurship and hidden government subsidies and protectionism.
With regards the first point - let's not forget, it was those same decent middle class people who were making the decisions that destroyed their own jobs. They were the people that made the decision they would rather save a few dollars, and buy from a company that manufactured the goods in China.
@foxinsoxuk
Elections are generally won by an opposition that occupies the centre ground. Cameron in 2010, Blair in 97, even Mrs T in 1979 had a fairly centrist manifesto and campaign. Tories who believe that after a short period a purged party would recapture government from Labour are deluded.
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This may be true, but where is the centre ground today?
I believe there is a movement rightwards today in Britain. And that movement is to a more open and libertarian society; hence the UKIP surge that is still gaining momentum.
The centre ground is shifting.
One of the biggest (but by no means only) psephological mistakes of Mike Smithson's approach to this is to deal in voters as percentages and with it the fallacy of churn. The General Election will be decided by numbers: actual voters, some of whom voted before, some of whom didn't, some of whom will switch. The difference between 28 million people voting and 30 million people voting is huge in terms of effect on result, the more so when many of those will not have voted in 2010, and many of those who did either lie or forget how they voted because unlike here they don't live in a Westminster bubble. This is why narrative is so important. Once you generate the Big Mo it's unstoppable because you attract support from those who are far, far, away from VI opinion polling. The narrative is undeniably moving the Conservatives's way. The real question is how much it will continue to do so. Were the election in 2014 I'd rate their chances much lower, but spring 2015? You'd be a fool to bet against them now, whatever Mike Smithson says.
And, Nick, I'd be a little bit circumspect about criticising local MP's who, after all, kept their jobs.
p.s. Boris bringing home the bacon for his 'friend' Dave … can see it now.
"We in Britain should look to Germany where manufacturing and engineering are still prized (and even to India to see why they can make cars here when British companies could not). Also to the United States to look at entrepreneurship and hidden government subsidies and protectionism."
Would that be the same Germany whose economy we are set to overtake?
http://www.bbc.co.uk/news/business-25519110
Yes its true that all three managed to occupy the centre ground but what they also managed to do was enthuse their base as well. The difference comes in the follow up elections. Thatcher managed to keep her base enthused. Blair didn't.
The impact of that was that Thatcher polled in excess of 13 million votes in all three of her victories and handed over a legacy of support unprecedented in British political history. Blair on the other hand lost 3 million votes between 1997 and 2001 and another million in 2005 (primarily to the benefit of the Libdems). Blair only won in 2001 and 2005 because of the desperate and broken state of the Tory Party post 1990 (a factor that has not been resolved in any substantive way).
The reality is that Party's cannot win elections with just the centreground. On its own it becomes no more than a no man's land trapped in between the core political ideologies. That is why the Libdems only have limited appeal. With parties to both their left and right they have never been able to break out fully. SImilarly with Cameron increasingly being hemmed in on the right the Tories are now facing similar problems if not yet to the same extent.
Cameron whose performance seems more Blairite than Thatcherite, has split the right and seen his support (in poll terms) decline. He is treated with disdain by many who would previously have been seen as conservative. Cameron cannot afford to lose more than a couple of hundred thousand votes. In the current environment that seems unlikely. I suspect Cameron will lose up to a million votes. perhaps more on a bad day.
Of course the other consideration is that neither Blair and Thatcher had the dysfunctional baggage of a coalition in their past to weigh them down either. The formation of the Coalition has added much to Tory woes and I'm not convinced that in the final run up to the election that the Libdems (languishing in the polls) will not go native and dish the dirt on being in government with the Tories, finishing off any chance of the Tories keeping their vote share up.