Condor Options

As the market sighs and concedes a monster gap up, isn’t it good to know that there’s always a bull market somewhere?  We’re speaking, of course, about the Intrade contract betting that Sarah Palin will withdraw (or, more likely, be withdrawn) as the Republican VP nominee before the 2008 election.

If you were actually long this PALIN.VP.WITHDRAWN contract, perhaps you could hedge the gamble with some long 2008.PRES.McCAIN, on the view that these might be close to inversely correlated: if Palin is withdrawn, it’s hard to see how McCain could recover quickly enough to ever take the lead, but your losing McCAINs would be more than offset by those winning PALINs.  And if Palin weathers the storm, you lose on that side, but maybe pull out a winner on the general election (i.e., you win, and we all lose).

This contract just started trading today; the real challenge is figuring out which of the various and sundry problems is generating so much withdrawal buzz.  Is it the:

• Teenage pregnancy thing? Surely not: only trolls and Falwells care about such things.
• Corruption scandal?  Maybe, but that’s old news, even if it is an ongoing matter.
• Cover-up of the corruption scandal?  Probably, in part.  As they say, the cover-up is always worse than the crime.  In this case the cover-up amounts to Palin lawyering up and exerting executive privilege, Bush/Cheney-style.  Independent maverick, indeed.
• $27 million in earmarks secured for a town of 7,000 people when she was mayor there?  Anti-corruption pork-fighter, indeed.

(We still can’t figure out why, if McCain really wanted to pander so transparently and shamelessly, he didn’t at least pick someone reasonable.  If the qualifying exam to be John McCain’s VP was, apparently:

Question 1: Are you a Republican?
Question 2: Are you a woman?

…there are plenty of people – Olympia Snowe, Kay Bailey Hutchinson, Jodi Rell all come to mind – who would’ve been more qualified, and certainly are already better vetted, than Sarah Palin.)

[Jonathan W. provided editorial and research assistance on this item.]