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Lesson: Watch the prediction markets

Want to get the jump on the next Bush administration resignation? Follow the nascent political prediction markets, where insider trading ain't no crime. This just arrived in my in box from InTrade, one of the leading markets:

Within minutes of TV reports of the resignation the price of a single contract on Gonzales resigning had soared to 99.5, representing a probability of 99.5% that he would be gone by the end of September.

Less predictable was the movement in this market early on Sunday, more than 24 hours before the resignation was officially made public. On Sunday the price of a contract for Gonzales to resign by the end of September rallied from 10.0 to 29.0. The contract for a resignation by end of December rallied from 26.0 to 40.0. 

Washington Whispers broke the Gonzales rumor at 12:06 p.m. on Sunday, the day Gonzales met Bush and resigned in person, so it's likely that people were just making a bet based on that story. After the Winograd Commission condemned Israeli PM Ehud Olmert in late April for his conduct of the war with Hezbollah, InTrade's Olmert resignation contracts spiked. Today they are at rock bottom. Still, this, from the same newsletter, is intriguing:

A similar market for Donald Rumsfeld to resign as Secretary of Defence also saw sudden upward movement in the hours before the news became public. The market on Saddam Hussein being captured also rallied just before he was found hiding in his bunker.

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Can Pakistan's X-prime ministers save the day?

Saturday Day Night Live used to run a cartoon skit called the "The X-Presidents" in which Bush I, Carter, Reagan, and Ford would team up to snatch the country from the jaws of disaster. (It later became a comic book by Robert Smigel.) The concept is no joke in Pakistan, where former PM Benazir Bhutto appears poised to triumphantly return and save a flailing Pervez Musharraf:

A power-sharing pact between Pakistan's embattled President Pervez Musharraf and former prime minister Benazir Bhutto has almost been finalized, a cabinet minister said on Wednesday. Bhutto, who has lived in self-exile since 1998, has demanded a commitment from Musharraf to quit as army chief and become a civilian president as a condition for any deal, but Railways Minister Sheikh Rashid Ahmed said the issue had been settled.

Meanwhile another ex-PM, Narwaz Sharif, is waiting expectantly in London for his vindication. But what happens if the ex-prime ministers fight amongst themselves? That may soon be the critical question.

UPDATE: Bhutto herself is now reportedly confirming that Musharraf has agreed to step down as army chief.