If you follow markets, you quickly get used to the vagaries of mass psychology, which include frequent popular delusions and the occasional madness of crowds.
This brings us neatly to the big question in the political betting markets right now: Are we witnessing a full-blown, bona fide Hillary Clinton "bubble"?
I seem to be immune to the general rule that you either love her or hate her. The junior senator from the state of New York inspires no strong emotions in me either way.
But the fact remains that right now, long before the first ballot has been cast and in a reasonably strong field, the markets are already giving her a 70% chance of winning the Democratic presidential nomination.
Even more extreme: They are now giving her nearly an even shot at winning the whole campaign.
That's right. According to the collective wisdom of the money changing hands at InTrade and Betfair and the Iowa Electronic Markets, Hillary Clinton's chance of winning the White House doesn't just eclipse the chance of Barack Obama or John Edwards or Rudy Giuliani or Mitt Romney or Fred Thompson or John McCain.
It pretty much eclipses all their chances put together.
(Betfair gives a 48% chance of a female president. InTrade gives Clinton a 44% chance of being the next president. At the IEM, combining her odds of winning the nomination with the Democrats' odds of winning the election gives her about a 45% probability of becoming president.)
Is this for real?
Sure, she's come a long way since her first tin-eared appearances on the national scene 15 years ago. But these odds are crazy. We are four months away from the first caucus.
And even if she wins the nomination, we are thirteen months from the general election. The name of the Republican opponent: still unknown.
A British politician once put it well. "A week is a long time in politics." There's 56 of them before the presidential ballot.
I first noted the developing Hillary boom in the betting markets
here some months ago. But now it isn't just a boom. We have to be in bubble territory.
There's no perfect definition of a "bubble" in financial markets. But they always involve prices, or odds, becoming disconnected from fundamentals. (Clinton's odds surged toward 50% just as a new poll from Iowa actually showed her in a competitive race there with Obama and Edwards).
In a bubble, momentum feeds on itself. The bubble becomes self-sustaining and, in its own little sphere, all-absorbing.
Two nights ago I watched a TV program devote five minutes to dissecting Clinton's laugh. And witness the media discussion of her cleavage, if you can believe it.
If you want to get the measure of how silly the odds on Clinton are, just imagine taking the bet. Imagine risking $100 of your own money in the hope of making a little over $100 if she ends up winning the White House.
That's a gamble. You'd better hope she doesn't stumble.
And that no skeletons tumble out of her closet -- or her husband's.
And that Mike Bloomberg doesn't team up with Chuck Hagel to run an independent ticket. What does that do in swing states?
Don't be fooled. Don't think these markets always have the right prices. Don't think you can't beat them.
I wrote a book about sports futures markets. Once upon a time, they were excellent barometers. But that's because most of the people betting were savvy insiders. Now they let the amateurs in, with predictable results.
Popular delusions. The madness of crowds.
The Hillary bubble in the markets reflects the Hillary mania in the media. The East Coast press, in a parody of itself, has rushed to anoint the New York senator as the nominee and likely next president.
Also, these markets give far too much weight to foreign money because of our crazy federal restrictions on gambling. InTrade is run from Ireland, Betfair from London, though the Iowa Electronics Market, which has an exemption from federal rules due to its educational role, is run by the state university out there.
Those looking to take a flyer might instead take a long odds gamble on Obama winning the nomination. Right now the bookmakers will offer you better than 6-to-1. Edwards? 15-to-1.
Even Al Gore is 9-to-1.
Last December, when I first wrote about the political betting markets, McCain was given a 50% chance of winning the Republican nomination. That was an easy short. Today, he's under 10%.
Meanwhile, Romney, the former Massachusetts governor, my tip then and now, was on about 11%. Today, he's between 23% and 30%, depending on the bookie.
I still think Romney is more likely to win the GOP nomination than anyone else, if only by elimination. I also think the markets, and the media, grossly underestimate his strengths in the swing states in a general election.
Maybe Clinton will win the nomination. And maybe she can win over the "purple" states in the general. Maybe swing voters that stuck to George Bush against John Kerry last time will back her against Romney.
Anything can happen. But someone would have to offer me a lot better odds than 50-50 before I'd bet on it.
In keeping with TSC's editorial policy, Brett Arends doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Arends takes a critical look inside mutual funds and the personal finance industry in a twice-weekly column that ranges from investment advice for the general reader to the industry's latest scoop. Prior to joining TheStreet.com in 2006, he worked for more than two years at the Boston Herald, where he revived the paper's well-known 'On State Street' finance column and was part of a team that won two SABEW awards in 2005. He had previously written for the Daily Telegraph and Daily Mail newspapers in London, the magazine Private Eye, and for Global Agenda, the official magazine of the World Economic Summit in Davos, Switzerland. Arends has also written a book on sports 'futures' betting.