Look at the volumes. The problem with Intrade etc. is that currently the volumes are low enough that you don't really have a liquid market. FGZMPLE Obama's volume today was roughly 2% of the TOTAL contract volume, (the same was true of HRC).

Without liquidity, individual trades alter the price too much - essentially giving you the same sort of liquidity risk as penny stocks:

Penny stocks may trade infrequently, which means that it may be difficult to sell penny stock shares once you own them. Because it may be difficult to find quotations for certain penny stocks, they may be impossible to accurately price

Note also that InTrade being newer than Iowa Electronic has lower volume.

Mind you IEM also missed the NH predictions. What this tells us more than markets being trailing indicators is that politics is as susceptible to "bubbles" as various financial markets. In this case, the "bubble" was the "Obama Surge" which peaked in Iowa and then burst in NH.