“Michael Bloomberg Redistributed $36.37 Directly To Me,” by Matthew Phelan

If I was retiring on a 401k or a pension soon, I would probably be incredibly worried that the stock market is in freefall. The parasitic forecasters at Goldman Sachs are predicting a steep GDP collapse in the second quarter as coronavirus rules everything around us. Revisions earlier this week to their already bleak estimates see a 34% decline in U.S. economic activity and an unemployment rate of 15% by midyear.

Obviously, I am still debilitatingly worried about the staggering human consequences—more-or-less catatonic about them when I’m not panicked about my mere survival or all the parochial, mammal-brained anxieties I have about my own friends and loved ones and mutuals on social. But in this time of brain-searing uncertainty, I am finding the process of judiciously attempting to predict the future and profiting from it (however modestly) incredibly reassuring and confidence-boosting. So let me tell you about some suckers whose pocket money I have been picking on PredictIt.org: Michael Bloomberg 2020 True Believers

My big assumption here was that the demographics on political betting markets probably lean heavily towards Jordan Belfort sales-training seminar attendees, eTraders, and the kind of people who Forbes cashed-in on when they started letting random dweebs upload blog posts to their website—that is, exactly the kind of free market ideologues who would believe that a billionaire formerly Republican mayor of New York City could come somehow sweep into the Democratic presidential primaries late, and win, just because he was worth a little under $62 billion USD.  Point being: There are rarely enough players on PredictIt for markets to behave rationally, in the hacky economic jargon sense of “reflecting reality faithfully.” It’s frequently warped by the lamest of cable news pundit groupthink, or deranged “extremely online” partisan personality cults, when not tied more strictly to polling data or some other quantitative information that nerds can home in on.  

(Most of the betting markets on PredictIt are pretty low volume, in the range of a couple hundred thousand “shares” or “bets,” typically with outliers in the low millions, or even like the single digits. The way PredictIt works is that you buy these “shares” priced from 1 to 99 cents and tied to whatever the participants in that market appear to believe the percentage chance of an outcome is likely to be based on their collective buying and selling patterns. If everyone in aggregate seems to believe that there is a 50/50 chance of something occuring, all of those $0.50 bets will either resolve at $1.00 for the lucky ones or $0.00 for the less fortunate bettors. To complicate this a little bit more, you can also just buy in and cash out at any point before the event under discussion actually happens; just riding waves of enthusiasm over a poll or a news report like a total mercenary, or cutting your losses early, once it looks like the shit is hitting the fan. I hope you skipped this parenthetical, if you’re some elite PredictIt savant.) 

So, back in early February, I bought 50 “No” shares that Mayor Mike would not win the 2020 Democratic nomination at $0.79 a pop, and then 25 more “No” shares when they went down to $0.75 each, four days later. Unless Bloomberg, who has thoroughly alienated his paid campaign staff by mercilessly reneging on his financial commitments to them, suddenly re-enters the race and wins, I’ve made $16.75 off this $58.25 investment. That’s a 28.76% return-on-investment (ROI) that I probably couldn’t have gotten investing that money anywhere else right now, in no small measure because I do not care about finance and might be an idiot.

I also nearly doubled my money betting “No” early on the market “Will Michael Bloomberg win at least one primary?”, and then betting “Yes” cynically for a few minutes just after he won the territory of American Samoa on Super Tuesday. (American Samoa technically did not count, per that PredictIt market’s rules—but, again, not enough people read the rules for the market price to reflect that.) All told, I wagered $24.20 and won $19.62 more off that, for like an 81.1% ROI or something. It’s too convoluted for it to actually be worth explaining, but here’s a spreadsheet documenting what I did exactly:

Quite the little stonks adventure. Penny-ante information arbitrage!

You could probably dig up a reason for every million of the $900 million dollars Michael Bloomberg blew running for president in 2020 to explain why he never stood a chance: the long rap sheet of sexual harassment stories stemming from his own frathouse behavior on Wall Street; his dystopian nanny-state neoliberalism as New York mayor; his whiny-ass voice, which carries the soft condescension of a single father who somehow managed to both win a protracted custody battle and then ship the kids off to boarding school anyway; simple baseline levels of anti-semitism and anti-elitism among the American electorate; the fact that no one in U.S. history has ever (EVER) entered a primary that late and come out on top (a Brookings scholar told Bloomberg, a publication Michael Bloomberg should read, that it would be about as hard as “defying gravity.”); and (of course) his modest height, which online dating apps have taught us now constitutes one of the last physically identifying traits that liberal-leaning Americans will permit themselves to be openly bigotted about. 

In dark times like these, Mayor Mike’s colossally expensive, thoroughly doomed and totally embarrassing vanity campaign gave me a small reason to hope. Yes, there was the $36.37, but also further evidence that rich people are both undeserving and incompetent, and that money is ultimately an illusion too abstracted from reality to rule over human society forever. Maybe we can organize affairs differently in our lifetime.

Anyway: Thanks for the $36.37, Mayor Mike! I donated it to Bernie. Please run again!!!!

 —Matthew Phelan

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