Earlier quoted context omitted.
Taleb wrote at long on the election models. TL;DR: A proper statistical analysis should have given around even odds (50:50), not 98:2. "So back to the mechanism of the model, Taleb imposes a no-arbitrage condition (borrowed from options pricing) to impose time-varying consistency on the Brier score. This is a similar concept to financial options, where you can go bankrupt or make money even before the final event. In…
People should be cautious when citing Taleb as an absolute authority. He envisions himself as an anti-intellectual, and doesn't mind talking out of his rear. I enjoyed his book Fooled by Randomness, but he repeatedly bashed "journalists" throughout---maybe an early indicator of the "fake news" movement even among those who should know better. Anyone who proposed 98% certainty was ridiculous and should not be taken se…
Can go bankrupt, not should.
He is saying that if in finance someone would make such a ridiculous forecast, his forecast would be shorted into oblivion and he would have lost most of the money bet on the forecast before the event even took place.
Imagine two relatively matched football teams, but a bookie offering 10:1 bets on one of them. There would have been massive bets against that bookie.
Given the recent history of american elections and other factors, a 50:50 prediction is much more sensible than a 98:2 one. But because journalists don't actually put money on their predictions, they can spout whatever numbers.
He is also complaining that even with a lot of polls hovering around 50%-50%, that 98%-2% prediction was still on, which doesn't really make any (math) sense (binary options, delta, ...).
In his math paper he describes this in more precise form.