Results

So you’re making your mortgage payments, but you realize you have no idea where that amount you’re paying comes from, or you’re not sure the intermediate numbers make sense. Or perhaps you’re one of the lucky few who is in the market to buy a new place, but you want to know what you will be paying in mortgage for that dream house.

In order to help you, we at Dumbagent have created a Mortgage Calculator, which will be available under our Resources section.

Enjoy!

At 4 days past the election day, we know who the next President will be and we know the results from every state bar one. Missouri still has yet to deliver a final answer with a total of 1,442,673 votes for Obama and 1,436,814 votes for McCain. However, since this is a difference of 5,859 votes in favor of Obama, we will assume the state is a blue state at this point in time.

Unfortunately, by looking at the data from our last post, we can see that not only were the prediction markets correct, but the polls were correct as well. So, while this shows the legitimacy of prediction markets, it does not do much to show if they are superior or not to polls. We can see that this year pollsters were very careful with their results. We were, however, able to extrapolate some very interesting conclusions about the mechanics of prediction markets.

First of all, let’s look at Intrade.com, whose results matched the polling results perfectly.

Secondly, let’s look at Betfair.com, whose results also matched the polls with one exception: Missouri. Missouri had a T, which meant “Too close to call”. This is clearly reflected in the fact that it is the only state still currently counting votes. Therefore, Betfair could be said to show even more precision.

Thirdly, let’s look at the Predictify’s Election Showdown results. This only allowed betting for certain states. However, it also works in a different way. Bettors do not have to place their own money. All of the money is put up by the people asking the question who are ultimately interested in the results. This brings many more predictors, but with less personal stake.

Here we can see that North Carolina and Missouri were predicted incorrectly, while Ohio and Virginia were deemed ‘too close to call.’ These were obvious mistakes, which are interesting to us because they show the difference between having a personal stake and not having one.

James Surowiecki, in The Wisdom of Crowds, stated that a monetary interest does not have to be at stake. From what we have seen here, it seems the opposite is true. Not only will the results be more precise if participants have an interest in obtaining a reward (financial or other), but if they stand to lose something for getting the wrong answer, you will gain even more precision.

Therefore, when people have to bet with their own money, as in with Intrade and Betfair, the results will be more precise than when they stand only to gain and not to lose.

Today being the day before the U.S. Election, we’d thought it be a great opportunity to check up on what the prediction markets have been saying about the potential outcome and prepare to compare them to the actual results. Since we at Dumbagent have been tracking the prediction markets for the US Elections for some time now, we thought we’d give a quick recap of what’s been going on:

Well, according to prediction markets, the result seem quite obvious. However, we would like to specify that these numbers give the percentage chance of victory and that they do not necessarily reflect the margin of victory. In other words, do not expect Obama to garner 89% of the vote just because he has an 89% chance of victory.

More interesting, however, are the state by state predictions, listed here:

The main point of interest here is to notice that Predictify’s Election Showdown gives North Carolina to the Republicans, while both the polls and the other prediction markets give it to the Democrats. Also Betfair gives a tie to Missouri, while the others give it to the Republicans.

NB: D= Democrat, R=Republican, T=Tie/Too close to call.
The Predictify column represents the Election Showdown by Predictify, which only allowed bets on certain specific states.
Source for Polls: Collection of 10 different polls.

As staunch advocates of free markets, we only find it fitting that, in light of the recent events, crises, and government interventions, we re-state our position that if governments use these times as an opportunity to seize more control and start nationalizing it could be a fatal mistake.

To contrast our beliefs, however, we also felt the need to feature an article by Jacob Weisberg that lends his position that this economic crisis spells out the end of libertarianism and free markets - and a rebuttal; this one by Richard Epstein, who respectfully disagrees.

For the record, Libertarianism, as used in these articles and as generally used by us Dumbagents, refers to fiscal and economic Libertarianism. Libertarianism for social matters (think Ayn Rand), is another topic which shares many similar views but diverges on other matters.  We’ll leave this topic for another post.

Gas prices are lower than they were not too long ago, but they’re still much higher than they were before. Now, should we relax and drive contently, or should we still be searching for alternatives in order to save money?

Here are some handy sites you can use to calculate how much it costs to drive to certain destinations and compare them against your other means of transportation.  They will be showcased in our Resources section from here on out.

Cost to Drive: Here you enter your origin, your destination, your car make and model, and it tells you how much it will cost you (in terms of gas) to make the trip.

Fuel Cost Calculator: Run by AAA, this is a rather simple version, but it gets the job done.

Gas addict: This is map based, which will use an average of 20 miles per gallon, or lets you enter your own information if you prefer.

MSNBC: This site calculates your monthly gas costs, useful for calculating the cost of your commute.

Did you find out that it’s still very expensive to drive? Or, even if it isn’t, do you realize that you’re still harming the environment? Then Save a Gallon is a great website; simply enter the number of miles you commute, the mode of transportation you use (other than car), and you can see how much carbon dioxide emission you’re preventing from being released in the atmosphere.