And Obama's Nominee Is...

Sure it's easy for armchair enthusiasts of the federal-court system to casually throw out their guesses as to President Obama's upcoming pick to replace Justice David Souter on the Supreme Court. But what are people saying who have actually put their money where their mouth is?

Mosey over to political futures site Intrade, a Dublin-based gambling hub for newsy predictions, and the two clear favorites are federal appeals court Judge Diane Wood and Solicitor General Elena Kagan. Kagan in particular is on a major upswing in just the last few days, leaping from a closing price of 28.0 on Friday ($2.80 for a share worth $10 if she is chosen) to as high as 39.0 on Monday. Wood had been riding a steady upward trend, but now she’s on a downward slope that seems to mirror Kagan's rise. She dropped today from close to 38.0 to 28.0 in a matter of hours.

An oft-discussed Supreme Court possibility, Judge Sonia Sotomayor of New York, has dropped from 30.0 to 20.0 over the last week.

Farther behind are big names like Michigan Gov. Jennifer Granholm (13.8), who generated a lot of buzz in the press after meeting with Obama recently. Another oft-discussed possibility, Judge Sonia Sotomayor of New York, has dropped from 30.0 to 20.0 over the last week.

Intrade and other political futures markets have drawn praise from statheads in the past for predicting elections with impressive accuracy—in 2004, for example, Intrade predicted the exact states George W. Bush and John Kerry won. Another futures market, run by the University of Iowa as a research tool, has bested a collection of about 1,000 polls 74 percent of the time in predicting presidential elections since its founding in 1988. The futures market's potential uses are intriguing enough that the Pentagon once even considered employing it to predict terrorist attacks.

But betting on a raft of polls, demographic trends, and other hard evidence seems fundamentally different than determining something that President Obama himself may not even know yet. This was evident during the runup to both President Obama and Sen. John McCain's vice presidential picks in 2008, where traders largely missed the mark on Vice President Joe Biden and Gov. Sarah Palin until the last minute, when more solid news began to leak about their impending selection. On the Democratic side, Sen. Jim Webb and Secretary of State Hillary Clinton were the top choices of political bettors immediately after the primaries while former Gov. Mitt Romney and Gov. Tim Pawlenty easily garnered more bets than the obscure Palin.

And the futures markets are hardly perfect on elections, either—they blew it in the Democratic primaries, along with the pundits and pollsters, in predicting Hillary Clinton's New Hampshire win. And while President Obama's stock was trading high on November 3 on Intrade, a year earlier they gave him a 6.5 percent chance of winning the White House and McCain a 3.5 percent shot, with the gambling community predicting neither making it out of the primaries. In addition, some critics, including polling wunderkind Nate Silver, suggested in 2008 that erratic betting patterns on Intrade showed gamblers intent on influencing media coverage of their favored candidate (or just betting large amounts of cash on a whim) were messing with the numbers.

Ultimately, in a scenario where exactly one person makes the final decision as to who to nominate for the Supreme Court, Intrade's likely more a measure of conventional wisdom than anything else. Maybe these gamblers know something we don't—a stray rumor going around Washington or a secret meeting with a candidate—or maybe it's just random fluctuations that will continue until more solid news starts leaking out of the Obama camp. So enjoy the frenzied trading leading up to Obama's impending choice, but please, take these numbers with a Dead Sea’s worth of salt.

Benjamin Sarlin is a reporter for The Daily Beast. He previously covered New York City politics for The New York Sun and has worked for talkingpointsmemo.com.