14 New Stocks - Interest, Anyone?

14 news stocks are now underway, all relating to interest rates and what they'll be doing over the next six months.

For the first time, iPredict is pointing at Australia and asking you to consider what the Reserve Bank of Australia will do with its cash rate when the RBA board next meets on 3 February, next Tuesday. Yes, a short sharp set of stocks this one, but we expect some healthy trading.

In another first, iPredict is also asking you to forecast retail mortgage rates for home owners by the middle of this year. How low will variable rate mortgages be in June? Below 7%? Below 6% below 5.5%? This should be a stock of interest to home owners considering whether to break their agreements with their banks and moving to a lower interest rate.

Finally, we launch another set of OCR stocks, this time for the RBNZ's 12 March annoucement. Of course, we'll be keeping an eye on these stocks as tomorrow's OCR news comes through.

91 Unleaded Stocks Launched

Today sees the launch of our first petrol price stocks, aimed at forecasting the price of 91 unleaded petrol at the pump.

Five binary stocks are designed to measure this, each asking will the price of 91 unleaded be within the following ranges:

91.FEB09.VLOW: price less and 132 cents
91.FEB09.LOW: price between 132 and 139.9 cents
91.FEB09.MID: price between 140 and 148 cents
91.FEB09.HIGH: price between 148.1 and 156 cents
91.FEB09.VHIGH: price above 156 cents

How do we measure price? We use the Ministry of Economic Development's Regular Petrol Price series, available from here. Although the Ministry does not make it clear on the page, this series is measuring the GST inclusive, all other taxes-inclusive price of 91 unleaded petrol in the Wellington region. I had to call the Ministry to figure that out.

We have also launched a new bundle called BUNDLE.91.FEB09 which combines all five stocks and sells for $1.

19 New Contracts Launched

iPredict launches 19 new contracts this morning covering politics, the economy, and our first foray into science with two contracts on climate change.

The full set of contracts launched today are:

FIJI.PM: Frank Bainimarama to lose position as Interim Prime Minister of Fiji in 2009
ZIM.MUGABE: Robert Mugabe to lose position as President of Zimbabwe in 2009
MP.CLARK: Helen Clark to leave Parliament in 2009
MP.CULLEN: Michael Cullen to leave Parliament in 2009
MP.ANDERTON: Jim Anderton to announce in 2009 he will not stand in next election
LEAD.GOFF.09: Phil Goff to be replaced as Labour leader in 2009
DL.KING.09: Annette King to be replaced as Labour deputy leader in 2009
NAT.MAORI.09: Maori/National agreement to be terminated in 2009
NAT.ACT.09: ACT/National agreement to be terminated in 2009
UNEM.DEC08: What will the unemployment rate for the December 2008 quarter be?
UNEM.MAR09: What will the unemployment rate for the March 2009 quarter be?
UNEM.JUN09: What will the unemployment rate for the June 2009 quarter be?
UNEM.SEP09: What will the unemployment rate for the September 2009 quarter be?
OCR.09.SUB45: OCR to go below 4.5% in 2009
OCR.09.SUB40: OCR to go below 4.0% in 2009
OCR.09.SUB35: OCR to go below 3.5% in 2009
OCR.09.SUB30: OCR to go below 3.0% in 2009
TEMP.2009: Global temperatures to be warmer in 2009 than 2008
TEMP.2009.HIGH: Global temperatures in 2009 to be highest ever

All but four of the contracts are binary. This is the result of demand: over 95% of all trading to date on iPredict has been on binary stocks.

Probably the newest aspect to these stocks is the introduction of two questions on climate change. 2009 is shaping to be an interesting year for climate science. There are, as I understand it, two camps in the climate change community. One says that greenhouse gases is a major driver of changes in climate. The second says changes in the Sun's energy output is responsible. What makes 2009 interesting is that these drivers are expected to head in opposite directions - greenhouse gas concentrations will continue their inevitable march upwards, but the Sun's energy is expected to continue falling. So which driver will temperatures tend to follow in 09?

We have more contracts in the works on petrol prices, mortgage rates and the weather, and possibly commodity prices.

Fourth Quarter Negative Growth? Ummm, Yes

Well it seems New Zealand is in for a fourth consecutive quarter of negative growth in GDP, at least according to early trading on our new recession stock. Our RECESSION.DEC08 contract launched at 70 cents about 15 minutes ago, and has just shot past 90.

Earlier today, Statistics NZ announced growth of -0.4% in production-based GDP and -0.7% growth in expenditure-based GDP in the September quarter.

It is hard to find any good news for the New Zealand economy anywhere in today's numbers, and based on that 90 cents, its hard to see any good news coming soon.

Merry Christmas!

New Stocks: OCR January 29

Yesterday saw the launch of five new contracts asking what the Reserve Bank will do in its 29 January OCR announcement. Previously we have launched new OCR contracts after the previous one, but this time we went ahead of today's announcement to see what effect today's announcement would have on expectations for January 29.

The theory was that a big drop today would quell xpectations of another large drop next month. So did it?

The strongest response was for a 75 point drop on 29 January, this stock settled 11 cents higher than just before 9am today.

The next strongest ressponse was on the 100 point stock, this was about level with 75 points prior to the announcement but fell from 18 cents to 12 cents in the two hours after today's OCR announcement.

Other stocks were more sedate. Stock for a 50 point stock increased, but much more gradually than the 75 point stock, settling around 3 cents higher at this time. A 50 point drop is the market's pick for the 29 January OCR announcement.

Stock for a 25 point drop (not shown on the chart) bounced downwards but ended exactly where it started at about 9%.

You can, by the way, produce your own charts for any active or closed stock using our web tools page. The chart above was produced using this url call. The bottom of the web tools page lists the full set of arguments available to you - you'll need the end and count arguments to see closed stock data, here for example.

New Stocks: Ferry Strikes and Building Consents

Two new sets of stocks tonight.

The first group asks about building consents. Earlier today, Statistics NZ announced residential building consents were at their lowest in October since 1992. What's in store for the next four months?

We have launched four stocks aimed at answering this question: BC.NOV08, BC.DEC08, BC.JAN09 and BC.FEB09. These contracts pay $0.01 for each 100 building consents for residential dwelling units granted.

We are using Statistics NZ's Building Consents issued report, usually issued towards the end of month following the period in question.

The other stock launched tonight, thanks to a suggestion by commenter (and trader?) Colonel, asks whether the Interislander will be hit by industrial action during the Christmas/New Year period. The Interislander is a division of Kiwirail which until July this year was owned by Toll NZ and now owned by the NZ government. Early trading is interesting - the contract opened at $0.10 and bounced all the way up to $0.28 before adjusting back to around $0.15. A contract to keep your eye on if you're planning a vacation on the other side of Cook Strait these holidays.

We're aiming to keep rolling out new contracts every few days for time leading up to Christmas. Please keep in mind we are obliged by our authorisation to limit the scope of stocks being offered to those political, business, economic, sociological, or demographic events, and we continue to welcome your ideas.

Your Feedback: What Stocks for iPredict?

iPredict closed nine contracts this morning, and with the cupboard looking temporarily bare we thought it might be useful to let you know about contract suggestions before us, for a possible launch in the next few days.

In addition to core stocks for iPredict – political leadership and economics statistics, we have received many good and great ideas for forecasting. Here is a summary of requests, most of them, from users. What do you like? If you have more, please send them to us at stockidea@ipredict.co.nz

Our goal – as the market operator – is to run contracts which say something of consequence about the future. Traders' goals are, of course, different – the goal is to run contracts that satisfy both objectives.

Please note that iPredict is not authorised to run sports markets.

Update 28/11: iPredict is also not authorised to run entertainment contracts. We are authorised to run contracts that depend on "political, business, economic, sociological, or demographic events or circumstances".


Politics

National/Maori/Act/UnitedFuture longevity

Helen Clark appointments

Economics

Emissions Trading Scheme – what will carbon trade for?

Will oil be below US$40 a barrel before 1 Jan 2009?

Retail gas price to exceed NZ$5 on 1 Jan 2010, 1 Jan 2011, 1 Jan 2012

Mortgage rates

New Zealand visitor arrivals

Australian OCR-equivalent

Listed company profits

Fonterra payout

Bluff oyster prices

Social

Transmission Gully – construction to begin before 2011?

Cook Strait ferries on strike at Christmas/New year

Tolls implemented on Waterview Motorway

Science

Weather - rainfall totals?

SETI detects alien intelligence before 2010-2012

International

Mugabe to lose job in 2009

Other

The number 1 trader as reported on iPredicts rankings page at 5pm on 31 Dec 2008 will have a net worth at least $4,000.

New Stocks on iPredict

The election is over and iPredict has many new contracts. In the last 24 hours we have launched 17 stocks asking:

• Who will replace Helen Clark as leader of Labour? Goff, Cunliffe, Mallard, Other
  
• Who will replace Michael Cullen as deputy leader of Labour? Cunliffe, Street, Jones, King, Goff, Other
  
• By how much will the Reserve Bank cut interest rates in their 4 December OCR announcement? 100 points, 75 points, 50 points, other.
• Will the Electoral Finance Act be repealed by May?
• Will the economy's negative growth continue in the September quarter?

We will also be launching new PM stocks asking who will win in 2011 in the next few days.

Wellington Central contracts launch

Wellington Central is a marquee electorate, and this election it is being contested by four high-profile candidates: Grant Robertson for Labour, Stephen Franks for National, Sue Kedgley for the Green Party, and Heather Roy for ACT.

Three contracts launched today on iPredict asking who will win Wellington Central: WC.FRANKS, WC.ROBERTSON, and WC.OTHER.

The timing of this launch was influenced by the appearance of these candidates tonight on TVNZ7's live show "Back Benches". It will be interesting to see contract price movements during and immediately after the show's airing at 9:10pm tonight. A real-time poll, if you like, of the candidate's performance on the night.

New Stocks launch today: SEATS.MAORI and MAJORITY.NAT

Today we launch two contracts to do with Parliamentary seats that will be allocated to two parties – the Maori Party and the National Party, but with each stock we have a different purpose in mind.

SEATS.MAORI is a stock aimed at counting the number of electorate seats the Maori Party will win. The contract pays 10 cents for each seat won by the Maori Party. As with all our stocks, pay out is capped at $1 per contract. The purpose of this question is to measure one source of overhang in the next Parliament – that is, the total number of seats it will have.

Overhang occurs when a party wins more electorate seats than its share of the party vote would entitle it to. The current Parliament has an overhang of one seat because in 2005 the Maori Party won four electorate seats when their party vote entitled them to three seats. SEATS.MAORI asks how many electorates – Maori or General – the Maori Party will win in 2008. In combination with another contract on iPredict, VOTE.MAORI, we will be able to estimate the overhang the Maori Party will produce.

Overhang is important - it can determine who leads the next government - and tactical voting can produce large distortions. One idea floated recently was for Maori roll voters to split their vote: give their electorate vote to the Maori Party but their party vote to Greens. If every Maori Party voter did that, and if the Maori Party won seven electorate seats, then an overhang of 7 would occur, meaning a Parliament of 127.

As David Farrar pointed out earlier this year, overhang could determine the election:

Let’s say National gets 51% of the vote and 62 MPs. They should get to be the Government under MMP - this is exactly what MMP is meant to guarantee. But by this strategy of deliberate vote splitting to ensure over-hang, then Labour, Greens and Maori Party could gain 65 MPs instead of the 58 they would have on the party vote only, and get to form a Government which only a minority of NZers voted for.

SEATS.MAORI is trading at $0.5597.

Our second contract is MAJORITY.NAT, which asks a simple question: will the National Party win an absolute majority of seats in the next Parliament. This is a yes/no question which asks whether this election will produce the first FPP-style government under MMP. This contract is trading now at $0.3300.

Recession Contract Launched

iPredict is pleased to launch a contract on the possibility of a New Zealand recession being declared for the June quarter.

On 27 June, Statistics NZ announced GDP growth for the March quarter of -0.3%.

If Statistics NZ reports another quarter of negative growth in June 2008, a recession - defined as two consecutive quarters of negatvie economic growth - will have occurred.

Our contract pays $1 per share if this occurs. We expect Statistics NZ to report this result in late September or early October.

If the March 2008 GDP growth figure is revised to a positive value before this contract closes, then this stock pays $0.

If you have any questions on the stock's definition, please ask us for clarification.