UT and MA?

What do Utah and Massachusetts have in common?

(Other than an affection for Mitt Romney?)

These are the two surest bets in the nation when it comes to the upcoming presidential election, according to Intrade.

Here's how it works: Intrade offers a security that pays off $1 if the Republican nominee wins, say, North Carolina's electoral votes.  Then it allows trading in that security.  If the current market price of that security is 50 cents but you think the probability McCain wins North Carolina is actually 60 %, then you can make money (in expectation) by buying the security.  

How does this work? 

If you think McCain will win with probability 60%, then the security is worth

0.60 * $1 = 60 cents.

If it costs you 50 cents to buy it, then you've just made 10 cents in expectation. 

The actual price of the "North Carolina Republican" security on Intrade right now is 44 cents.  This means that there isn't anyone in this market who's willing to buy at a price higher than this --- so there must not be anyone in the market who thinks the probability McCain will win North Carolina is much higher than 44%.  

The 44% is therefore the market's current assessment of the probability McCain will win North Carolina.  These market assessments have been shown to do better than polls at predicting winners of elections.  Unlike people answering poll questions, these traders have real money at stake, so they're motivated to figure out which way the wind is blowing. 

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What does all this have to do with Utah and Massachusetts?

The "Utah Republican" security is trading at 98 cents.  The "Massachusetts Republican" security is trading at 2 cents.  These are the highest and lowest values among the 50 states and the District of Columbia.  

UT and MA might be the two most different states in the union politically --- it's pretty remarkable that Mitt Romney could be so popular here and an ex-governor there.