Bryan Caplan  

I Win My Unemployment Bet With Mike Shedlock

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BLS Data... The Latest Unemployment Figure...
Back in 2010, Mike Shedlock ("Mish") and I agreed to the following bet:
If the official initially reported U.S. monthly unemployment rate falls below 8.0% for any month between now and June, 2015, I win $100.  Otherwise, Mish wins $100.
Since, by Mish's own admission, the initially reported U.S. monthly unemployment rate just hit 7.8%, I am now declaring victory.  Pursuant to my Bettor's Oath, I honor my defeated opponent, who had the integrity to put his money where his mouth was.  (BTW, I can't find Mish's email.  If you have it, please privately send it to me).

In other news, Hudson's Tim Kane has bet me $100 at even odds that Romney will win the election.  Before betting, I disclosed current Intrade odds, but he was undeterred.  The bet is on.


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COMMENTS (12 to date)
R Richard Schweitzer writes:

Yes, but you had the prescience of Rick Santelli to guide
you :-)!!

Swimmy writes:

Congrats, Bryan, and a hearty thanks to Mish for being willing to bet on his beliefs. Bets like this marginally improve academia.

Tim Kane should get to intrade immediately where he can get better than evens.

Sasha Volokh writes:

Isn't his e-mail address right there on his blog under "Contact Me"?

Robinson writes:

Are you going to buy Intrade shares in Romney (at ~$3.4) to create a no-risk portfolio?

(If not, shouldn't you turn in your economist ID card at the door?)

James A. Donald writes:

Official statistics are not worth warm spit. And pre-election official statistics are worth even less than usual.

Kevin writes:

Would you buy Obama at $6.50?

Navin Kumar writes:

Are you going to hedge the bet? It seems unsporting but natural.

If not, on what grounds are you going to not hedge?

Vangel writes:

Some victory. Take a very volatile number that is produced by a department that has a clear bias to support the existing administration and you can come up with any claim. The trouble is that the claim may turn out to be just as wrong as the two candidates are.

Robinson writes:

Vangel: I'm no fan of the current administration, but it's just not factually plausible that the administration rigged the numbers.

The numbers are incredibly closely guarded and based on a predetermined, fixed and well-defined study design and statistical methodology. They don't have the option to adjust it upward or downward based on their preferences or bias. (See here for more).

Thomas Sewell writes:

Shouldn't you wait until the inevitable couple of months of "corrections" to the numbers before officially settling your employment numbers bet?

For the Obama/Romney bet, you can get odds of 6-1 in England, where they're very convinced Obama will win. I suggest finding someone you know there to place a bet for you if you want to bet on Romney.

I'm trying to find someone local to give me the same odds (I personally think Romney will win, maybe even win big).

jason writes:

Navin,

Basic finance theory would suggest Bryan shouldn't hedge the Romney bet. There are always some transactions costs. For example, intrade has a bid asked spread and I'm not sure if they have other fees as well.

For a small gamble relative to Bryan's net worth, he shouldn't hedge as long as there are some transactions costs.

Its like if you are gambling and have a free bet on black. You can put more money down on red and green to eliminate your variance, but your EV goes down because the house takes a cut.

ChevalierdeJohnstone writes:

The lesson in this for Mish is you should never bet against the Federal government's willingness to cook the books. You especially should not pick the exact target that the government has said it will meet. Where there is a way, there is a will.

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