[btilly]

This makes perfect sense to me. But it shouldn't be 50%, it should be "regression to the mean" where the mean is a "naive" forecast based on history, the economy, demographics, etc, etc, etc.

Silver is making a prediction based on the best model that he has.

It isn't quite arbitrage, but if you did binary option pricing then you could indeed fairly safely make money off of Silver by taking known events that you know swing polls, like conventions, and betting on the likely pricing changes.

That said, the data set that Silver is developing using his model is going to be one of the key inputs into a more sophisticated pricing model. And how to factor in those other external factors is going to require a lot of calibration between Silver's predictions and a known database of such external factors. Which means that Silver's approach is the right starting place to get there, no matter how much Taleb might wish it otherwise.