Flip Pidot joined me to talk about prediction markets and what’s ahead given an improving regulatory environment for the industry. One of my goals here was to demystify the nature of the prediction market beast. (It does involve a lot of math. Alas.) Fortunately, Flip managed to make the topic accessible and entertaining.
Flip is a pioneer in the space, in fact he founded the American Civics Exchange in 2007. AmCiv is the “first commercial market for political futures.” From its website:
Political uncertainty is the only major source of external financial risk you can't hedge with traditional products.
Our SOLUTION: Exchange-traded and OTC policy futures
Businesses and investors can hedge fluctuating commodity prices, interest rates, foreign exchange, and even inclement weather. But what about a proposed tax hike, denial of a new drug approval, or your preferred candidate or party losing a big election?
By tying binary derivative contracts to specific policy and electoral outcomes, we're bringing the reliability and efficiency of futures and swaps to the world of policy risk management.
Flip's informative and entertaining Substack is “The Supermodel”.
By the way, the Trump Chaos Index (which Flip and I discussed) edged higher yesterday "on news of an executive order to direct Secretary McMahon (just 3 days on the job) to dismantle the Department of Education." The Index is presently at the height of “Disarray” but not quite reaching “Light Bedlam.”
