Data expert Nate Silver is known for making big statements in elections and at the poker table, and right now those two worlds have converged as both presidential election polls and betting markets show momentum building for Donald Trump and decreases for Kamala Harris by less than a year ago. week to go before election day.
Silver has been on record since last week as saying the odds are in Trump’s favor — he laid out his call in a New York Times op-ed — but he also described it as a “gut instinct” rather than more certain data science. In an interview with Jon Fortt, host of CNBC’s “Closing Bell: Overtime” at the CNBC Technology Executive Council Summit in New York City on Tuesday, Silver made several major caveats about current polling and betting markets.
Silver told Fortt that his current model shows the odds favor Trump, who has a 55% to 45% win probability advantage over Harris.
But he also said that for every anecdotal example he can give of why Trump’s momentum is peaking, “there’s a counterexample.”
Trump’s momentum in the polls has narrowed or erased Harris’ lead in some key swing states, but Silver says he thinks after two straight cycles in which the polls have been “pretty bad” and there has been a lot of criticism of the voting industry was targeted. , “many pollsters are raising their hands.”
“They’re pushing a draw,” Silver said at the CNBC event, giving the example of a hypothetical poll call: “Harris is up 3%? Let’s say 1%. Trump is up by 4? Let’s say 1.5%. what we call herd behavior, where people strive for consensus. They don’t want opinions to get too out of line.”
Another factor that could skew the polls is if Trump voters are “more charged and excited,” which could lead them to participate in more polls than they have in the past, and that leans toward Harris voters will participate less in the polls.
Political polls are never as accurate as people expect, Silver said, noting that if you modeled a 52%-48% lead in most scenarios and it turned out to be the opposite, that would still be pretty close. But political polls are an exception, and it becomes even harder for the polls to get things right.
The polls in the recent elections have been “systematically, across the board” down three to four points, so recent small swings in the polls in Trump’s favor are “overwhelmed by the uncertainty … essentially cutting out the noise,” he says . said.
Five percent of people answer polls: “and they’re weird,” Silver said.
Most people no longer even have the landline telephones that election history relied on. “Old white people answer the phone, but others vote,” he added.
Why the betting markets are all ‘atmosphere and chatter’
The betting markets are showing a much bigger advantage for Trump, with big bets on Polymarket, Robinhood jumping into the action and presidential election contracts becoming increasingly popular.
Wall Street research reports from major banks and billionaire investors, including Ken Griffin and Stanley Druckenmiller, point to the recent action in stocks and bonds as a sign of growing conviction about a second Trump term. Shares of Trumpmediawhich runs the former president’s social media platform Truth Social, was also up sharply in recent trading, though it remains extremely volatile, down 22% on Wednesday.
Critics have raised concerns that election betting markets may be manipulated. But Silver, an advisor to one of the leading prediction markets, Polymarket, says he wouldn’t pay much attention to the betting market data at this point because it may not be very accurate at this point in the election cycle. In principle, they can take into account additional information such as early voting and historical data, but there is limited historical data on elections that the prediction markets can use as a basis for accuracy, making most of these calls ‘calibrated based on atmosphere and chatter ‘. rather than useful information, Silver said.
Nate Silver during an interview with CNBC’s Jon Fortt at the CNBC Technology Executive Council Summit in New York City on October 29, 2024.
CNBC
There are different times when prediction markets work. Within minutes of the Trump-Biden debate ending, Silver said, the prediction markets knew it was bad for Biden, potentially implying a tougher race for Trump as well. And on election night itself, there are plenty of smart people who can dig into the county-by-county votes as they come in and figure out which way the election is trending. But for now, Silver says, what’s being seen in these markets may be a sign that they may be “getting a little carried away” in their beliefs, rather than proving that they can “escape the conventional wisdom,” which is exactly what good data analysis does. .
The real money is made from bets that can yield outsized returns. Trump is not nearly as good a bet for the gambler as he was in 2016. In that election, Silver’s model had Trump’s chances of winning at 29%, which was almost double Trump’s chances in most polls. For the gambler, that was a situation where the risk was worth taking, with one winning bet making up for all the losing bets many times over. That is not the case this time. In today’s prediction markets, Trump is favored by a whopping 66% to 34% over the vice president. And that’s with the polls and models showing a much tighter race, putting Harris in the position of perhaps being the better bet.
Regardless, Silver says of the current election and the latest data: “Anyone who has confidence in the selection is someone whose opinion should be disregarded.”
All reasons why Trump could win and Harris could lose
There are several reasons why Silver sees Harris as vulnerable. Inflation and immigration are among the losing issues for Harris who inherited them from the Biden administration, he said, noting that Biden was so unpopular with voters that he had to drop out of the race, and even if inflation is now under control , prices are still much higher. than four years ago.
He noted that incumbent parties are struggling in elections worldwide. The Silver poker player – he has won more than $800,000 as a professional player – described Harris as “a tough hand to play.”
On the other hand, Silver noted that Democrats have won five of the past six popular votes, that abortion is a major burden on the Republican Party in this election, and that Democrats are generally doing a good job of turning out voters while Trump more or less rolls up his sleeves. that responsibility to Elon Musk, who has no previous experience with voter campaigns. While he offered a caveat even here, he said this election could be one where a surprise turnout helps Trump more than Harris. Voter registration data has shown gains for Republicans in key swing states that run counter to recent historical patterns.
“First-time voters are not as blue as they usually are,” Silver said. He described a liberal-leaning new voter as “no longer inspired” by major structures like the Democratic Party, though he emphasized that this is a fundamental shift and not specifically related to Middle East politics.
“The margin of likelihood to vote for Harris has narrowed,” Silver said.
Recent polling data shows that younger Black, Latino and Asian American voters are migrating to Trump in numbers that defy historical trends. “That’s where he’s grown the most,” Silver added.
He gave the example of an 18-year-old voting for the first time who would have been 10 when Trump was first elected, as he is unlikely to be swayed by any concerns arising from Trump’s term in office. And for young black voters, Silver said, the civil rights era is a distant memory that could sever historical ties to the Democratic Party.
Younger voters in particular, Silver said, are “uneasy” after the Covid-19 crisis.
Silver doesn’t think Democrats made a mistake by replacing Biden at the top. “Biden was on track to lose in a landslide… all the swing states would have gone for Trump… they (the Democrats) were saved from certain death,” he said. But he does think the Harris campaign made mistakes by putting too much faith in what may have been just a “sugar high” in the polls after the convention and debate against Trump, which most people thought Harris handled well. In the short term, “they’re running on vibrations,” Silver said. He said the Harris team had no longer-term message and “wasn’t thinking about how things would play out in November.”
One advantage Harris does have is that she remains more popular than Trump, for several reasons, including his beliefs. “Trump is far from an optimal candidate,” he said.
Correction: Stanley Druckenmiller is among investors who have cited the recent action in stocks and bonds as a sign of growing conviction about a second Trump term. An earlier version of this article misspelled his name.
