Weekly PROPHET NOTES 10/28/24

Global Outlook: heat is up with one week left

What a week, huh? At least form me, last week stretched me both personally and globally. We have witnessed an amazing theatrical show with (thanks to 21st century) live commentary. Romans had their Colosseum and we have our global affairs. Different thing, same purpose. BTW

Polymarket

can you add an option to filter the markets in more detail, mainly an option to either exclude some categories or to see markets from several categories? With sport season in full swing it is now painful to go through new, ending soon and recently ended markets.

This week passed under the light of another Middle East drama, more and more delusion around the US elections as well as some very inaccurate articles around prediction markets. Media is really trying to discredit the concept. Do not get me wrong, Polymarket has its flaws, big ones (resolution process), but there is no need to post outright lies. If you are interested, I posted my reaction on X.

On top of that we had massive rallies from Kamala Harris and Donald Trump as well as Joe Rogan finally getting the courage to interview presidential candidate. Was it good? No idea, do not have time to watch three hours of the weave.

Enough of introduction, let’s move towards a short summary of the week and what lies ahead.

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Weekly Recap

There is a lot to unpack here so let’s go and see what was at the top of the news cycle last week.

US Politics

Trump is on his way to 69.420% probability, reaching the number of the beast in the process.

With seven days left the race is as close as it gets. Swing states are tied and popular vote is roughly 49-50 Trump-Harris. Due to last two elections and Republicans having an electoral college premium, the slightly higher odds are on Trump. I will not spill my beans now, while I wanted to avoid this topic, I think I need to write a summary article on US elections. I want to summarize both campaigns and based on this helicopter view to put out a prediction. Where data is plentiful, less is more.

Last week both campaigns bet on mass events with Trump appearing on the Joe Rogan podcast as well as doing the MSG rally with Melania, Elon Musk, RFK Jr. and Tulsi Gabbard speaking among others. I will just say one thing here - near the finish line this year’s Trump campaign feels more like 2016 than 2020. You can see the excitement.

While Trump bet on the big show, Kamala bet on blue chip celebrity endorsement. Beyonce appeared at her Huston rally and done a formal endorsement giving us some flashbacks of the 2016 campaign, where she performed for and endorsed Hillary Clinton. As I said previously, we are more in 2016 than 2020.

I will be back with more US politics later on.

Wars

War departments also kept the OSINT accounts busy this week. After a lot of telegraphing with most probably intense behind the closed doors conversation where US must have engaged both Israel and Iran to arrive at a missile show that satisfies Israeli public opinion while makes Iran content enough to not retaliate further for now.

The more I think about it, the more absurd the whole situation is. As I wrote yesterday, the whole war drama is there because the US is too indecisive to use its empire status. And each day it will be even more difficult to use it to full advantage.

Last note on the Israeli retaliation: I am quite happy with my deep dive and positioning on the market in the end. Striking oil did not happen and I managed to take some profit from the overall retaliation market. In hindsight I could have taken more, but the doc leak gave me more conviction that the attack will not happen before November. Anyway a good game overall with the thesis holding up very well. Subscribe below if you want to see more interesting analysis in the future.

One last bit on Ukraine. North Korean troops are now confirmed and this is a very interesting situation. North Korea is a very isolationist country and we did not really have an opportunity to see them in any kind of action since the Korean War over 70 years ago. Considering global tensions and alliances being made, clarity on NK capabilities would be invaluable in assessing future escalation risks in Asian theater.

Prediction markets

Lastly we have an organized attack ongoing against prediction markets. Led by publications such as the New York Times and TIME magazine, various hit pieces have been published, both on the overall concept of the markets as well as on creators themselves.

While I have many things against Polymarket myself, especially on the current resolution process, the prediction market niche is growing and solving problems day by day. They are invaluable tool for assessing public consensus on global events and for me they provide a basis for analysis and commentary with skin in the game. Negative propaganda is just propaganda. I will continue to debunk bad takes on prediction markets and support their growth as I believe that they are a massive positive in the global context and can help in tackling the divisive environment that was created in part by the very media that criticize them. As I like to say, accountability matters.

That is all major news from last week, let’s look ahead.

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Global Outlook

This week we will be overwhelmed with political propaganda in the final stretch of the election cycle. I expect social media to be close to unusable in the coming days with every party pushing on victory.

Everything is now presented in the context of elections and it is hardly shocking. The choice of the new leader of the US is a global event with major implications for the whole world as each candidate has their own agenda. Especially on the geopolitics front the two candidates differ much. But there is also one other issue that both hinges on the election as well as may influence the outcome of it - the economy.

Just before the elections we are bound to see new jobs data for October. On November 1st we should see both unemployment data as well as jobs data for the US economy. And there is just the chance for an upset or surprise. While traders are looking for a lower print, the chances for going high are not that small.

Lower numbers are partly influenced by the recent hurricanes that are bound to have a lot of impact. On the other hand any print below 100k would indicate problems with the economy. Why put out sub 100k print if you can just revise after the elections?

That being said, the unemployment data is bound to come at 4.0%-4.1% range indicating that overall job market in terms of official data is not that weak.

Overall I do not expect a major upset before the elections in terms of data and neither do the rest of the traders. There are no outliers left in the race it will all come down to swing state minority.

Markets ending this week