Manipulation at Intrade?

Doug just sent me a fascinating article on online betting on the Presidential Elections and how it looks like Intrade's numbers are being manipulated. The authors best guess is that this is just some random individual (or group) manipulating the market (and I don't much believe in conspiracies) but the methology in tracking this down is fascinating.

Right now, Obama is trading at 52.3 points. That is, Intrade implies that he has a 52.3 percent chance to become the next President. [...] Over at BetFair, another large UK-based gambling and futures site, you can also buy an Obama contract. But the price there is 1.62, which implies a 61.7 percent chance that Obama will become the next President.

That is a huge spread, 51.5 points versus 61.7 points. This is the equivalent of the Giants being 3-point favorites at the Bellagio Sportsbook, and 7-point favorites at the Mirage down the block. Those things just don't happen in efficient, sufficiently liquid markets, because they create arbitrage opportunities [...]

Well worth reading.