Daily Market Mispricings: 2 Election Events Where We Disagree With Polymarket — May 19, 2026

TL;DROn May 19, 2026, Naly's biggest election-market disagreements are the Senate reconciliation contract and the Daegu mayor race. Polymarket prices Senate passage by May 22 at 67c YES; we think fair value is closer to 20c YES because floor math, parliamentarian setbacks, and calendar compression all point the same way. In Daegu, 74c YES on Choo Kyung-ho looks too rich versus our 44c fair price.

Election mispricings usually come from one of two failures: markets overweight a headline and underweight process, or they extrapolate a partisan baseline into a race where candidate-specific shocks matter more than usual. Today's list has one of each. In Washington, traders appear to be pricing party intent more than procedural reality. In Daegu, they appear to be pricing the city's conservative history more than the actual shape of this year's contest.

Key Takeaways

The strongest answer flip is the Senate reconciliation contract: Polymarket's 67c YES looks too high against our 20c fair price because late defections and procedural rework have to be solved inside a compressed window.

The Daegu mayor race looks much closer to a coin flip than the market's 74c YES on Choo Kyung-ho suggests, largely because Kim Boo-kyum is a uniquely strong opposition challenger and the PPP entered the race bruised.

In both cases, the market seems to be overpricing the easier narrative and underpricing friction: Senate floor mechanics in one case, coalition fracture and candidate quality in the other.

The practical watchpoints are near-term and observable: committee markup and whip count movement in the Senate, and late-campaign polling plus conservative consolidation in Daegu.

2 Mispricings at a Glance

Event Snapshot

Will the Senate pass a reconciliation bill by May 22?

YES Resolves May 22, 2026 Open 62/100 confidence

Polymarket Top Answer YES 67%

Naly Top Answer NO 80%

Max Payout if Correct +67c

0c 50c $1.00

Polymarket Naly

Why we disagree: Traders are pricing party intent, but the actual chain still requires repaired text, a stable 50-vote coalition, and a fast vote-a-rama inside days.

Event Snapshot

Will Choo Kyung-ho win the 2026 Daegu mayoral election

YES Resolves June 3, 2026 Open 78/100 confidence

Polymarket Top Answer YES 74%

Naly Top Answer NO 56%

Max Payout if Correct +74c

0c 50c $1.00

Polymarket Naly

Why we disagree: The market appears anchored to Daegu's conservative baseline even though Kim Boo-kyum is unusually competitive and the PPP spent weeks damaging its own coalition.

How to read this: Polymarket Top Answer and Naly Top Answer show the final answer each side sees as most likely. Max Payout if Correct shows the gross upside from the current quote to the $1 settlement if the selected contract side wins. The horizontal graph still shows where that selected side sits on a 0c to $1 range for Polymarket versus Naly.

Event 1

Will the Senate pass a reconciliation bill by May 22?

ForecastContract · YESResolves May 22, 2026Open62/100 confidence

+67c

Max Payout if Correct

Polymarket Top Answer YES 67%

Naly Top Answer NO 80%
Trade on Polymarket →

Traders are pricing party intent, but the actual chain still requires repaired text, a stable 50-vote coalition, and a fast vote-a-rama inside days.

Causal Chain

Cause Cause bullet: Senate Republicans entered the week with at least one explicit holdout, plus parliamentarian damage that forced rework of parts of the package.

↓

Effect Effect bullet: Rewriting text, re-whipping votes, and surviving a vote-a-rama are sequential constraints, not parallel ones, so delay compounds rather than cancels out.

↓

Projection Projection bullet: When a bill needs both substantive repair and nearly perfect caucus discipline inside a sub-week window, the probability of missing the date rises faster than headline odds suggest.

Key Factors

| Factor
▲ | Axios reported on May 18, 2026 that Sen. Thom Tillis had told colleagues he would not vote for the bill in its current form, directly threatening passage this week.
▲ | The Senate parliamentarian ruled against parts of the GOP immigration funding package on May 15, 2026, forcing redrafts rather than allowing a straight glide path to the floor.
▲ | The budget resolution only set up the narrow reconciliation path on April 23, 2026 and required committee recommendations by May 15, leaving very little slack between drafting and final passage.
▲ | Reconciliation protects the bill from a filibuster, but it does not remove the need for a clean internal majority or the time cost of amendment voting.
▲ | Traders may be overweighting the existence of a Republican majority and underweighting the fact that narrow majorities magnify every single defection.

Bayesian Calculation

Base rate: Start from the market's 67% YES prior because same-party control and reconciliation rules make passage plausible in ordinary conditions.

Positive update: Majority control and a live leadership push keep some chance of a late procedural salvage, so we do not collapse YES toward zero.

Negative update: A named holdout, recent Byrd Rule damage, and a compressed calendar are all deadline-sensitive negatives, which matters more than generic party intent.

Naly estimate: 20% YES, which implies 20c fair value on YES and 80c fair value on NO.

Alternative explanation: A reasonable bull case is that the market is correctly reading this as a leadership-forcing event rather than a deliberative one: the bill gets narrowed, problem provisions are stripped, reluctant Republicans fall in line, and the Senate jams it through before the deadline because the political cost of failure is too high.

What Would Make Us Wrong

We are wrong if the holdout problem is more tactical than substantive, if leadership already has replacement text ready after the parliamentarian ruling, and if the Senate can move into a vote-a-rama by midweek without fresh defections. In that scenario, the market's 67c YES would have been pricing hidden whip progress rather than visible noise.

Fresh Checks

Axios: Tillis pops up against GOP's new reconciliation bill (May 18, 2026)

The Fiscal Times: Senate parliamentarian rules against parts of GOP immigration funding bill (May 15, 2026)

AHA News: Senate adopts budget resolution, sets up path for narrow reconciliation bill (April 23, 2026)

Reuters via Investing.com: Senate Republicans seek $1 billion for Secret Service upgrades, including Trump's ballroom (May 5, 2026)

Event 2

Will Choo Kyung-ho win the 2026 Daegu mayoral election

PoliticsContract · YESResolves June 3, 2026Open78/100 confidence

+74c

Max Payout if Correct

Polymarket Top Answer YES 74%

Naly Top Answer NO 56%
Trade on Polymarket →

The market appears anchored to Daegu's conservative baseline even though Kim Boo-kyum is unusually competitive and the PPP spent weeks damaging its own coalition.

Causal Chain

Cause Cause bullet: The market appears to be anchoring to Daegu's long conservative history instead of treating this as a candidate-specific race against one of the opposition's strongest possible challengers.

↓

Effect Effect bullet: That anchor hides two real sources of slippage for Choo: Kim Boo-kyum's personal strength and the PPP's self-inflicted nomination damage.

↓

Projection Projection bullet: If late undecideds treat this contest as a referendum on candidate quality and coalition competence rather than party label alone, Choo's baseline advantage compresses sharply.

Key Factors

| Factor
▲ | ChosunBiz reported on March 25, 2026 that Kim Boo-kyum led all hypothetical Daegu matchups against PPP contenders and that Choo was only at 10.6% in a multi-candidate suitability survey at that stage.
▲ | The Korea Times reported on April 10, 2026 that the PPP nomination process in Daegu had triggered internal backlash and real concern about independent bids splitting conservative support.
▲ | Yonhap reported on April 26, 2026 that Choo ultimately won the PPP nomination, but nomination is not the same thing as reconsolidation.
▲ | Chosun's English edition reported on May 9, 2026 that a JTBC-commissioned survey showed a near tie, with Choo at 41% and Kim at 40%, which is far closer than a 74c YES market implies.
▲ | Kim Boo-kyum is not an ordinary opposition candidate in an unwinnable seat; he is a former prime minister with local roots, name recognition, and a credible cross-coalition argument in a city that rarely offers liberals a serious opening.
▼ | In races where party identity is strong but candidate asymmetry is stronger than usual, market participants often arrive late to the rerating.

Bayesian Calculation

Base rate: Start with Daegu's conservative baseline, which justifies Choo opening as the favorite rather than as an underdog.

Positive update: Choo has party machinery, residual home-field advantage, and a partisan floor that weaker conservative candidates would not enjoy.

Negative update: Kim's strength, the PPP's bruising nomination fight, and evidence of a tight race all argue against pricing Choo like a three-in-four favorite.

Naly estimate: 44% YES for Choo, which implies 44c fair value on YES and 56c fair value on NO.

Alternative explanation: The market may be correctly assuming that Daegu's partisan gravity reasserts itself in the final stretch. Under that view, early turbulence and scattered polls matter less than the simple fact that conservative voters return home once the ballot is set and the race nationalizes.

What Would Make Us Wrong

We are wrong if the last two weeks produce clear conservative reconsolidation, if Kim's crossover ceiling turns out lower than the press narrative implies, or if turnout patterns favor habitual PPP voters far more than swing or anti-PPP protest voters. A late, clean Choo lead in multiple independent polls would move this contract much closer to the market's current frame.

Fresh Checks

ChosunBiz: Kim Boo-kyum leads Daegu mayoral polls against People Power candidates (March 25, 2026)

The Korea Times: DPK far outpaces PPP in nominations for Daegu mayoral election (April 10, 2026)

Yonhap: PPP nominates 3-term lawmaker Choo as Daegu mayor candidate (April 26, 2026)

Chosun: Prosecution Law Backlash Tightens Yeongnam Races (May 9, 2026)

Conclusion

The watchpoints for the next 72 hours are unusually concrete. In the Senate contract, the whole question is whether leadership can repair text, secure holdouts, and still clear floor procedure by May 22, 2026. In Daegu, the question is whether Choo's partisan home field reasserts itself or whether Kim's crossover strength keeps the race in true toss-up territory. If those catalysts break against the market narrative, both contracts should reprice fast.

Methodology

This roundup uses the same framework as our finance mispricing articles, adapted for election contracts on May 19, 2026. We start with the quoted market cents price on one binary side, translate that into the market-implied probability, then rebuild fair value from process risk, coalition structure, timing friction, polling quality, and candidate-specific causal factors. Our public calibration history is available on Naly's track record.

Disclaimer

This article is for informational purposes only as of May 19, 2026. It reflects probabilistic judgment, not certainty, and it is not financial, legal, or investment advice. Prediction markets can move on new information, thin liquidity, or resolution-rule nuances, so readers should verify contract terms and fresh reporting before taking any position.