InTrade Manipulation Confirmed

Both Krugman and Tabarrok point us to an article that confirms someone ("rogue investor") was manipulating the stock price of McCain and Obama in the inTrade contracts to make it appear that the race was closer than it really was. This was, interestingly, always something detectable if you were watching it closely, which may mean in the subsequent races, savvy investors can take these dollars laying on the ground at little risk. For instance, there was no comparable spread in the general Republican-Democratic contracts, nor was there similar spreads in the Iowa Electronic Market. Plus, from what I could gather studying the state contracts several months ago when these differences first started showing up, McCain was going to have to get incredibly lucky in order to win, since it would require winning all of the swing states. Even at swing states in which he had a 50/50 chance, winning all five of those swing states was not simply 50/50 but rather the joint probability, which made it much lower. So for anyone who was paying attention, you could infer that this was not going the way it looked. So, for the next time, we should conclude this. B/c this happened in both the 2004 and 2008 races, it's likely to happen again and again. But so long as the person in question is targeting a single site, it may be detectible by studying all the sites closely, or by trying to match up the state-specific contract probabilities with the national contract probability to see if they are in fact working out to be one and the same. Because if they aren't - and especially if these contract prices are changing a lot a few months out from the election date, but had been fairly stable up to then - then you'd expect to have some money lying on the ground that you can pick up rather easily.