Update after the jump.
Original post:
From the Wall Street Journal via MSN, November 6:
How the Trump Whale Correctly Called the Election
The mystery trader known as the “Trump whale” is set to reap almost $50 million in profit after running the table on a series of bold bets tied to the presidential election.
Not only did he see Donald Trump winning the presidency, he wagered that Trump would win the popular vote—an outcome that many political observers saw as unlikely. “Théo,” as the trader called himself, also bet that Trump would win the Blue Wall swing states of Pennsylvania, Michigan and Wisconsin.
“I am very happy and confident for my bet!” he wrote after Trump’s strong showing in Florida boded well for his long-shot bet on the popular vote.
In messages sent privately to a reporter before Election Day, Théo predicted that Trump would take 49% or 50% of all votes cast in the U.S., beating Harris. He also predicted that Trump would win six of the seven battleground states.
As of Wednesday afternoon, analysts were projecting that Trump would win the popular vote, with nearly 72 million votes to Harris’s 67.1 million, although millions of ballots had yet to be counted in California and other states. Betting markets regarded it as a near-certainty that Trump would win the popular vote.
Trump is also favored to win all seven swing states, betting markets show. The one state where Théo thought Harris might win, Michigan, was called for Trump on Wednesday.
The Journal has confirmed that Théo is the trader behind the Polymarket accounts that were systematically purchasing wagers on a Trump victory. Polymarket has corroborated some parts of his story, saying that the individual behind the bets was a French national with extensive trading experience and a financial-services background.
Théo said he placed the Trump bets using his own money, with an eye toward making a big profit, and he had “absolutely no political agenda.” The Journal was unable to determine whether these statements are true. Nor could the Journal rule out links between Théo and any political organization or Trump allies.
In his emails and a Zoom conversation with a reporter, Théo repeatedly criticized U.S. opinion polls. He was particularly critical of polls conducted by mainstream-media outlets that, in his view, were biased toward Democrats and tended to produce outlier poll results that favored Harris.
“In France this is different!! The pollster credibility is more important: they want to be as close as possible to the actual results. Culture is different on this,” he wrote.
Théo shared a table of numbers he had compiled based on RealClearPolitics polling averages, showing that Trump had overperformed his swing-state polling numbers in 2020. Given the tight polls in swing states in 2024, Théo reasoned that a similar overperformance by Trump would easily push him into the lead.
Polls failed to account for the “shy Trump voter effect,” Théo said. Either Trump backers were reluctant to tell pollsters that they supported the former president, or they didn’t want to participate in polls, Théo wrote.
To solve this problem, Théo argued that pollsters should use what are known as neighbor polls that ask respondents which candidates they expect their neighbors to support. The idea is that people might not want to reveal their own preferences, but will indirectly reveal them when asked to guess who their neighbors plan to vote for.
Théo cited a handful of publicly released polls conducted in September using the neighbor method alongside the traditional method. These polls showed Harris’s support was several percentage points lower when respondents were asked who their neighbors would vote for, compared with the result that came from directly asking which candidate they supported.
To Théo, this was evidence that pollsters were—once again—underestimating Trump’s support. The data helped convince him to put on his long-shot bet that Trump would win the popular vote. At the time that Théo made those wagers, bettors on Polymarket were assessing the chances of a Trump popular-vote victory at less than 40%....
....MUCH MORE
Update: "The Polymarket 'whale' actually made $85 million, far more than originally thought"
Some previous posts on teasing reality out sociology:
November 2021
Politics: I Am Told I Should Read Professor Timur Kuran To Understand Current American Politics
The underlying thesis is that in societies where people don't feel safe expressing themselves they will have, but not exhibit, their political preferences. This can lead to preference cascades ripping through a society, when through subtle signaling or even osmosis individual learn they are not alone and feel freer and freer to express themselves.
May 2022
The Wildly Perverse Effects Of Compelled Beliefs
And as noted in a February 2023 post:
In authoritarian/totalitarian/tyrannical societies when people are attacked for their ideas, to the point that their ability to earn a living is threatened or destroyed they oftentimes keep their thoughts to themselves, while outwardly appearing to acquiesce to the authorities or the mob which is oftentimes created by the authorities.
This dynamic makes for a very dysfunctional society, exemplified by the old Soviet joke, "We pretend to work, They pretend to pay us." This ended up being the way of life from the Balkans to the Baltic, with various degrees of submission. After the East German revolt in 1953 was put down, the GDR was probably the most enthusiastic adopter of the totalitarian society required to force people to do things that are contrary to the human spirit, and thus had less distinction between outward appearance and inner beliefs; while people in Czechoslovakia and Poland probably had the most difficult time accepting the diktats from above and thus had the widest divergence between mouthing the party line and what they were actually thinking.
In the case of Poland it was so apparent to everyone involved that Stalin once remarked that imposing Communism on Poland was akin to “fitting a saddle onto a cow.”.
A major, major issue to be aware of is that when people begin to realize they are not alone in their thinking, their passive resistance begins to exceed the limits of containment and self-restraint that individuals have practiced, to the point you get Budapest in 1956, Prague 1968 or Tiananmen Square 1989. The rulers, fearing for their lives, much less their hold on power, tend to react violently to what they didn't see coming or, in the case of Gdansk in 1989 they try to cut a deal to hang on.
This rapid reveal of what the populace actually thinks and feels is the preference cascade....
Here's a 2022 post that will suffice as a quick overview:
When Self-Annointed Elites And Other Control Phreaks Care More About Image Than Substance
For the record, Potemkin, like Dracos, got a bad rap from history.
Excerpted from the Ecospohia essay "Potemkin Nation", August 18, 2021:
One of the repeated lessons of history is that when Potemkin politics become standard operating procedure in a nation, no matter how powerful and stable that nation might look, it can come apart with astonishing speed once somebody provides the good hard shove just discussed. The sudden implosion of the Kingdom of France in 1789 and the equally abrupt collapse of the Soviet Union in 1991 are two of the most famous examples, but there have been many others. In every case, what happened was that a government that had stopped solving its nation’s problems, and settled for trying to manage appearances instead, discovered the hard way that governments really do derive their power from the consent of the governed—and that this consent can be withdrawn very suddenly indeed.
When things start to crumble they can crumble fast.
This is exactly the point made by Vaclav Havel in "The Power of the Powerless" and by Timur Kuran in his writings on preference cascades. If interested see:
February 2024
Compelled Beliefs and Preference Cascades
Gathered together in our October 27, 2024 pre-election compendium:
If You Repress People (and their ability to express themselves) You Won't Get The Information You Need
This is true whether you are talking about something as mundane as political polling or as esoteric as the state intelligence organs....
