In December, I noted that the smart money is moving from Rubio to Cruz but the endorsements aren't. The betting lines at PredictWise showed that people were bidding up Cruz's chances while bidding down Rubio's. Meanwhile, Rubio racked up seven endorsements during December to Cruz's one. Based on Cruz's win and Rubio's third place showing in Iowa, one would think that the bettors would say "we made a good bet, double down." Nope. It turns out I skipped a step, as my comment at PM Carpenter's blog shows.
PredictWise, which had been predicting that Rubio was the most likely nominee until a couple of weeks ago, is now even more firmly betting (literally, so pun fully intended) on a Rubio victory. Rubio was last the favorite at 33% chance to win when Trump passed him. Yesterday, Trump peaked at 52% before falling to 26%. Rubio jumped from 33% to 55% overnight.That was two days ago. This morning, Rubio's odds are now at 60%, while Trump has fallen to 21%, Cruz has held steady at 14% (his odds had dipped briefly to 4% before the caucus, so confident were some bettors that Trump was on his way to winning the nomination), and Jeb! is at 4%. Rubio comes in third and his chances go up, while Cruz wins and his chances fall? Nate Silver has an answer in Why Iowa Changed Rubio’s And Trump’s Nomination Odds So Much.
Presidential nominations are a lot like the stock market. In the long run, they’re reasonably well governed by the fundamentals. In the short run, they can be crazy. Iowa represented the equivalent of a stock market correction, a sign that sanity might prevail after all.Nate agrees with Rubio's movement up, but he thinks that the market overcorrected on Cruz.
In the stock market, the fundamentals consist of things like the profitability and growth of a company. In the nomination process, the most important fundamentals are what we call electability (can the candidate win in November?) and ideological fit (does the candidate hold positions in line with the consensus of her party?). A party would prefer to nominate a candidate who scores well in both categories.
Rubio fits the bill, perhaps uniquely among the remaining Republican candidates. His image with general election voters is not great, but it’s better than the other leading Republicans. He’s also quite conservative. That’s convenient, because Republican voters are quite conservative also. In fact, Rubio is almost exactly as conservative as the average GOP primary voter.
That doesn’t mean the betting markets have things exactly right; I think they’re too low on Cruz, for instance.Just the same, this is very much a "Party Decides" argument Nate is making. Follow over the jump for how that is playing out with endorsements.
After the Iowa Caucuses, I predicted two things. First, that several candidates would drop out. Second, that Rubio's strong third place showing, which beat both expectations and the rest of the Establisment candidates, would earn him a lot of endorsements. Both came true, in one case at the same time, as CNN reported yesterday Rick Santorum endorsed Rubio as he ended his campaign.
Former Republican presidential candidate Rick Santorum announced he is endorsing Marco Rubio. CNN's Dana Bash report.I'll have more about Frothy and three other candidates quitting later. Right now, I'm concentrating on the endorsements, which came in even faster than I expected. Since Monday, Rubio has earned the endorsements of two senators and five U.S. Representatives. That puts him in first among Republican candidates, as the graphic from FiveThirtyEight shows.
He's now ahead of Jeb. That means, from a "Party Decides" perspective, that the Establishment is throwing its weight behind him, although slowly, as only 28% of the possible endorsement points have been awarded on the Republican side (and some of those might get reassigned, as supporters of Huckabee, Paul, and Santorum endorse one of the remaining candidates). Watch for more politicians to jump in after New Hampshire. As for Cruz, he's only picked up one endorsement since Iowa. Maybe it's that lack of Establishment support that is keeping Cruz's odds down, although that didn't hurt Trump the two weeks before Iowa.