Is a Trump-Biden rematch inevitable?

No, but I can't for the life of me figure out what prediction markets are thinking

This is the first paywalled post in Silver Bulletin history! You can sign up for a free or a paid subscription here.

Read media coverage of the presidential race, and a certain amount of tedious inevitability is already creeping in. It’s just presumed that Joe Biden will once again face off against Donald Trump, making for the first presidential rematch since Eisenhower-Stevenson in 1956 — even though we’re still months away from the first votes being cast and the primary process is notoriously unpredictable.

By contrast, if you look at prediction markets, they take a much more cautious view. For instance, as of when I’m writing this on Monday morning, ElectionBettingOdds.com, which compiles odds from several prediction markets, reports that both Biden and Trump have only about a 65 percent chance of winning their respective nominations:

Assuming that Biden and Trump’s odds are independent from one another¹, that means the chance of a rematch is only 65% x 67% = 44%. That’s right. Bettors at prediction markets think that a rematch probably won’t happen.

I think this is kind of insane and I would smash the “rematch” button all day at that price. For subscribers, I’m going to go into a fair bit of detail about why.