THE BLOG
05/08/2009 05:12 am ET Updated May 25, 2011

How Tim Geithner Can Guarantee a 43% Return on Your Money This Year

The betting odds that Timothy Geithner will remain Treasury Secretary until Dec. 31 are currently about 3 to 7. For every $7 you wager, if he stays, you come away with $10. Alternately, if you bet correctly that he'll depart, your $3 bet more than triples.

So how do you bet?

During the general election, I learned that bookmakers are extraordinarily accurate in their predictions of political outcomes, more so than the best polls. As an experiment, I asked one of America's foremost handicappers to take time out from the grandstand and bet on political outcomes. Ray Paulick was once a protégé of oddsmaker "Jimmy The Greek" and is now editor of the thoroughbred industry insiders' Paulick Report. He always has been a political junkie.

He thought it would be easier handicapping political outcomes than horse races. "In a ten-horse field on the track, so many more things can go wrong and there are so many more variables," he said.

I bankrolled us with $1,000 in play money and picked some of the most popular predictions markets on sites Intrade and Betfair. Among measures taken for simplicity's sake, each bet was $100. Here are the results so far:

1. Obama to Win Presidency, 4-3 odds: Paulick, impressed early with grassroots campaign, wins $167

2. Obama to Win in Kentucky, 7.5-100 odds: Paulick, a Kentuckian, wins $107.50

3. Voter turnout prediction between 60-65% for 2008, 28-1 odds: Paulick loses $100 -- the correct answer was 56.8%. "I erred in misreading how blasé the right was about McCain," he says.

4. Hillary Clinton named Secretary of State, 66-1 odds: $100 loss; Paulick said, "Knowing that Obama was very big on Lincoln's team of rivals, it shouldn't have surprised me."

5. Caroline Kennedy to fill Hillary Clinton's Senate seat, 1-3 odds: $100 loss

6. Blagojevich still Gov. of Illinois on/after Dec 31, 2008, 7-1 odds: $800 win; "Justice doesn't move that fast."

7. Franken Wins MN, 6-100 (bet for: tbd)

8. Coleman Wins MN, 24-1 (bet against: tbd)

9. Steele to be Next Chairperson of the Republican National Committee, 3-2 odds: $250 win; Paulick: "The Republican Party is so transparent, it seemed likely they would overreact to their defeat by electing an African American and attempt to broaden their reach superficially rather than by actually changing their policies."

10. Andrew Cuomo does not fill Hillary Clinton's Senate seat, 5-6 odds: $120 win; "Cuomo would rather have Paterson's job."

11. Rahm Emanuel to depart as Chief of Staff on/before Dec 31, 2008, 16-1 odds: $100 loss.

12. Libby Pardon, 5-6 odds: $183.33 win: "People, unlike stocks and mutual funds, perform in accordance with past performance. 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."

13. Leon Panetta to be confirmed by US Senate as Director of CIA, 2-100 odds: $102 win

14. Rick Wagoner Resigns by March, 2009, 99-1 odds: $100 loss

15. Tom DeLay Guilty of Laundering, 5-2 odds: (bet of not guilty, tbd)

16. I Love You Man Opening Weekend Domestic Box Office Receipts $17.5 million, 4-1 odds: Paulick took the under, missing by $310,270, losing $100

17. Obama Job Approval Rating on March 31, 2009 between 60-64.9%, 2-3 odds: $167 win

18. U.S. Average Gas Price $2.00-$2.25 on March 31, 2009, 1-1 odds: $200 win

Summary: If Paulick were a hedge fund, he would be up $1493.83, a rate of return of 149% over five months. At that clip, over an entire year, he would return 359%.

So what's his line on Geithner?

"I think there's only a twenty-five-percent chance that he's going to leave," Paulick said, "unless there's some kind of scandal. Certainly he's a guy that the critics don't like, and certainly he's had a rough start. But he's settling in."

So one way or the other, everyone now can like Geithner.