I read political blogs and news sites every day. A few sites that I read through every day are:

NYTimes.com -- great election and world news coverage. The NY Times also has an excellent set up for mobile web (on your phone). Whenever you click to view an online article on your phone it recognizes that and gives you a phone-friendly version.

CNN.com -- good news site. Some fluff. Light liberal bias.

FoxNews.com -- good news with a heavy conservative bias.

Slate.com -- very well written articles about the political race, the environment, and other important issues. Liberal bias. Mobile phone friendly.

Fark.com -- oddball news, links to blogs, hilarious but at times poignant intros to the links.

One popular phrase in the election coverage is that it is neck-and-neck, too-close-to-tell, or some other phrase describing how Obama and McCain are very close.

I'll agree that the race is close but it isn't 50/50. McCain might win, but I'd say his odds of winning are about 40% right now to Obama's 60%.

Why do I say that? Because I look at what the smart money is betting on. It's more reliable than any polls you may find. The more money bet on something, the more I think there's value in the odds.

Two sites that I will often check out for election odds are Betfair.com, and Matchbook.com. These are actually betting exchanges rather than sports books.

The philosophy from a bettor's standpoint is about the same, however. The only difference between an exchange and a book is that in an exchange the house matches up bettors and takes a % fee for arranging the bet. A sports book, on the other hand, actually wins and loses money directly from and to the players. An exchange can't lose while a sports book can.

Their are other places that accept bets on the election. A few others I know of are thegreek.com, bookmaker.com, and intrade.com. I feel more confident in the value of looking at matchbook and Betfair because they also show how much money is being offered at particular odds and because the lines are closer since they don't have to have as large of a difference as an sports book would. (A sports book's edge comes from the difference in the offer amounts on each side of a bet. Since an exchange simply charges a fee on whatever people want to bet each other, the lines are often tighter and therefore more indicative of the true odds.)

So let's get to the numbers...

Right now Matchbook.com has $2,000 being offered by someone at 140 on McCain while there is $3,866 at -174 on Obama. That means that there are other people out there willing to accept a bet from me at those odds. They are also willing to wager a sum of money large enough that I believe they feel it's a good bet for them and not simply for entertainment purposes.

While not a perfect system, if you figure out a "no-vig" line between those bets, you can get a good idea of the current odds of winning for each candidate. Since there's a 34 point difference, take half of that and add or subtract it to each person.

If we add 17 to McCain, we get 157 and if we subtract 17 from Obama we get -157. According to the current numbers at matchbook, the fair line right now is 157/-157. This means any bet of $100 on McCain will pay $157, while you must lay $157 simply to win $100 on Obama. In other words, McCain is the underdog and Obama is the favorite.

This 157/-157 line translates to odds of 38.9% / 61.1%. In other words, according to Matchbook's bettors McCain is about 40% to Obama's 60% to win.

Online there is an excellent calculator for converting the moneyline to a percentage if you want to follow the race odds daily as I do. It's located at this link at SmartCapper.com.

BetFair uses a different style of pricing than we're accustomed to in the USA. They do decimal pricing rather than moneyline. It is relatively simple to convert to a probability. You simply take the reciprocal of the "Back" number (the number 1 divided by the number listed on BetFair for "Back").

For example, right now there is $5,955 being offered on McCain at 2.7. If you divide 1 by 2.7 you get 0.37 probability which means 37%. Obama currently has $1,486 offered at 1.61. If you divide 1 by 1.61 you get 0.62 probability which is 62%.

We can see that 62% + 37% doesn't equal 100% but it's close enough. What it tells us is that the smart money on Betfair, like the ones at Matchbook, also give McCain about a 40% to Obama's 60% chance of winning.

These numbers can fluctuate wildly. Obama's favorite status increased immediately after the Democratic convention and his acceptance speech. The following day, McCain's announcement of Palin as the VP candidate plummeted Obama's favorite status, and increased McCain's odds to where they were nearly even money for a day or two. The numbers have now gone back up to about what they were before the Palin announcement.

While this may be an exciting way for many of us to watch the election, some people I know find these opportunities to be ripe ones for making money on the political betting markets. Some spikes and drops in the odds are highly predictable such as immediately after a major party's convention or after a major announcement such as the VP candidate. Some people can make money on this using a buy low / sell high strategy. Sometimes you can bet on McCain one day and then Obama the next day and it won't matter who wins, you'll have a locked in profit.

One other interesting thing that Betfair provides is a visual graph of the changing odds on the race. For example, in this graph, you can see how the odds were largely in favor of the Democrats months ago and then the race and extremely tight. You can see the Palin announcement and how it squeezed the Dem and Repub lines nearly together. Now they've expanded out a bit.

 My guess is the lines will once again get tighter as November draws close. And my other guess is that I really have no idea who'll win. I just figure Obama's odds are about 3 in 5 right now.