The Markets React to Iowa (And So Do I)

So, Obama and Huckabee have won the Iowa Caucuses. Here's how Intrade is reacting in the nomination stakes (bid price; ask price; change):

Hillary Clinton: 56.0; 57.9; -9.6

Barack Obama: 36.0; 36.8; +10

John Edwards: 3.1; 3.2; -4.1

John McCain: 30.0; 30.2; +10.0

Rudy Giuliani: 24.0; 26.8; -4.6

Mike Huckabee: 13.1; 16.3; +5.3

Willard M. Romney: 13.0; 15.0; -10.8

Fred Thompson: 2.9; 4.0; +1.0

The only result here that looks odd is the McCain boom. He came in a distant fourth, losing to the narcoleptic Fred Thompson. However, the media have decided that McCain would win simply by showing up — even I can feel for Hillary Clinton when Chris Matthews declares that a 33% result for Clinton would be a monumental defeat, while a 18% result would make McCain a conquering hero — and so he has. It's hard to see how Romney regroups after this, and even though Romney is my preferred Republican, the horse-whipping he got affords me the consolation prize of watching all that money he spent coming to nothing. Turns out winning an election is not the same thing as executing a leveraged buy-out. Amazing!

On the Democratic side, the upshot of the Iowa Caucuses will likely be the end of all the second-tier campaigns, and I'd be surprised to see Edwards stay in very much longer. Obama is starting to pull away from Edwards and Clinton — a 7+ point victory is not close, considering the size and resources of the Clinton machine, and the four years Edwards has spent camped out in Iowa. Andrea Mitchell is describing the mood at Hillary Clinton HQ as "dirge-like," and so it should be.

On the Republican side, the contest appears to be one between two candidates the Republican establishment loathes, Huckabee and McCain. More specifically, the contest is between, on one side, the tribune of the yokels the GOP establishment has been conning and laughing at for thirty years, and a man whom the GOP establishment made a concerted effort to destroy eight years ago. I can't wait to watch.

In minor candidate news, Rudy Giuliani is going to finish 6th, well behind Ron Paul. I think that means that a national crisis, and indeed an international crisis, has been averted.

UPDATE: I'd been wondering how Hugh Hewitt would put a positive spin on Willard M.'s throttling. Here it is: "Shades of 1976 –the long march begins." That's it. You know things are looking bleak for Romney if Hugh Hewitt can't convince himself that Romney won. Hey, remember this?

Mitt Romney's "Faith in America" speech was simply magnificent, and anyone who denies it is not to be trusted as an analyst. On every level it was a masterpiece. The staging and Romney's delivery, the eclipse of all other candidates it caused, the domination of the news cycle just prior to the start of absentee voting in New Hampshire on Monday –for all these reasons and more it will be long discussed as a masterpiece of political maneuver.

And so it shall be.

UPDATE: I almost forgot to mention Joe Scarborough's well thought-out and cogent analysis of the impact of Benazir Bhutto's assassination on the primary races. Is it possible for a pundit to spout so much shameless bullshit that his mainstream credibility gets revoked (and I'm not just referring to Scarborough)? My guess: nope.

UPDATE: Shorter John Edwards concession speech: "I won by coming in second."

UPDATE: Shorter Hillary Clinton: "Congratulations all around, it was a good night for Democrats." She was very gracious, but went on forever.

UPDATE: Obama: "On this January night, at this defining moment in history, you have done what the cynics said couldn't be done." There's a reason people like this guy.

UPDATE (1:28 am): The prediction markets are still moving a lot. Hillary is now down to 51 cents (-13.9), Obama's up to 43.5/46.0 (+19.8). Interestingly Rudy Giuliani is rebounding very slightly.

While we're on the subject of embarrassing political forecasting, who can forget this promethean insight from Christopher Hitchens?

Sen. Obama cannot possibly believe, and doesn't even act as if he believes, that he can be elected president of the United States next year.

In fairness to Hitch, I think that whole paragraph was written so that he could use the word 'etiolated,' with the swipe at Obama an afterthought. (There's even a helpful hyperlink to the dictionary.com entry for 'etiolated'. Oh internet, you are so good.) Also, Hitchens gives a half-hearted compliment to John Edwards, saying the ex-senator is "in politics for the right reasons." Really? I think Daniel Drezner gets the last word on Li'l Huey Long:

As for Edwards — I can't take seriously anyone who thinks that a free trade agreement with Peru — Peru!! — is somehow going to devastate workers and communities. Proposing to "make top prosecutors at the Department of Justice responsible for enforcing trade agreements"? I love how Edwards wants to re-engage with the world and simultaneously bully these governments into accepting American terms. Hillary Clinton's trade positions are problematic, but Edwards is Hillary on steroids.

Okay, one more word from me: Edwards' approach to domestic issues, like his approach to foreign affairs, is basically bullying dressed up in fancy clothes, as in his threat to take away congressional health insurance. 'Attaway John, blackmail 'em on behalf of the little guy. I don't think this sort of thing is healthy or useful.