The market backing Robertson

The latest prices on iPredict for the Labour leadership and the next PM continue to intrigue.

David Shearer is at 70.4% to become the Labour leader. The stock on whether the PM after the 2014 election will be Labour is 52%, so if you multiply them together the chance Shearer will become PM should be 36.6%. However the price for Shearer to become PM is 29.6c or 29.6% which suggests that the market thinks Shearer becoming leader is a negative for Labour winning in 2014 by 7.0%.

But Cunliffe has the same issue. His leader stock is 28.2% suggesting his PM stock should be 14.7%. But in fact it is 7.4%, which suggests that Cunliffe as leader damages Labour chances by 7.3% – much the same as for Shearer.

So how is this possible? Well the answer is that despite not being a candidate for this leadership ballot, Grant Robertson is at 5.7% to be PM after the election. As the price for a Labour victory is 52% this suggests that the market thinks there is an 11% chance Grant will roll whomever gets elected Leader before the 2014 election.