At the moment it's even-money that George Bush will pardon Scooter Libby--or about 6 to 5, to be precise (a bettor wins $6 for every $5 bet that Bush will pardon Libby), based on wagers placed on internet bookmaking sites like Intrade. Such betting markets have proven to be extraordinarily accurate forecasters of political outcomes.
One month ago, a Libby pardon was a long shot, as far as handicappers were concerned. I spoke to one of their luminaries, Kentucky's Ray Paulick, who was a protégé of the notorious oddsmaker "Jimmy The Greek." Now he edits the thoroughbred industry insiders' must-read Paulick Report.
In his estimate, prior to the holidays, the odds of a Bush pardon of Libby were 8 to 1 ($8 for every $1 bet). "People, unlike stocks and mutual funds, perform in accordance with past performance," he explained. "Past performance--what we look at in handicapping a horserace--would lead one to conclude that the current administration would consider the pardon. But Bush already addressed the Libby issue with the commutation."
Then came the Dec. 22 Wall Street Journal editorial that began, "Rarely can Presidents improve their legacy in an Administration's twilight days. But President Bush now has that opportunity, by undoing a measure of the injustice inflicted on I. Lewis 'Scooter' Libby." The sentiment has been echoed by a spate of other conservative publications, including National Review. Bettors evidently believe Bush will be swayed.
Said Paulick today, "My original line was based on my analysis of the probability of a pardon--not an emotional analysis. However, many people make wagers based on their emotions or loyalties, and that's not usually a wise thing to do. Betting odds move constantly based on who the money is coming in on."
Regarding today's Libby Pardon market, Paulick added, "This looks to me like the classic case of an overbet horse that has momentum on his side--like Big Brown, going into the Belmont Stakes with a chance to win the Triple Crown. People bet him like a sure thing, ignoring the fact that he'd had foot problems, missed training, and was coming off steroids. We know how that worked out."
And now to hear it straight from the horse's mouth...
The Latest Line on Libby on Intrade.com:
P.S.: On Thursday, a federal court ordered the White House to find and preserve the approximately 14 million missing emails from March 2003 to October 2005. Those e-mails may contain a "smoking gun" in the Valerie Plame CIA leak scandal, in which Libby was convicted of perjury and obstruction of justice. Paulick gave me the following odds on those emails, based upon the assumption they are located, and that investigators have an adequate chance to read them:
The odds that the e-mails will be found: 7 to 5
If found, the odds that the emails contain a smoking gun: 8 to 1 to 10 to 1.
Odds that there was something deleted: even money.
Odds of finding something that will implicate Vice President Cheney: 50 to 1.