Dems agree to drop gov’t-run insurance option – AP (12/08/09)
Democratic senators say they have a tentative deal to drop a government-run insurance option from health care legislation. No further details were immediately available.
Back on August 23rd, I came across an InTrade contract on whether or not the public option would become law before the end of 2009. 100 meant that it was certain to become law, 0 meant that it was not. It was trading at 32. I sent one email to Sarabeth, and one to my cousin who works on Wall Street, and may or may not be one of those responsible for nearly wrecking the entire global financial system. The email contained a description of the contract and my comment: “Massive shorting opportunity.”
As of Tuesday evening, it is trading at 3, and I imagine it will be racing for zero any minute now. I didn’t sell any of these contracts short for a couple of reasons: First, markets like these can be very thinly traded, with any substantial buying or selling moving the market quite a bit. Second, I have a rule against online and local gambling. I don’t play cards at the casino around the corner from my house, or on the internet. I’ll do whatever in Tahoe or Vegas, but then it’s not an everyday thing. I may have to rethink this policy, as a few days ago I bought a non-trivial amount of stock in the major health insurance companies on the assumption that the combination of individual mandates and no increased competition will not exactly present a drag on their earnings.
But my point is that none of this was ever in doubt. And if you can find a way to make money based on Obama and Congressional Dems folding, consider taking advantage of it.