Kalshi Politics — Mispricing Audit (v4, archetype-targeted)

Bottom line: an efficient week — cash is the position. Every open market in the v4 Politics universe closing by Oct 4 was either a ≤5¢ tail, a ≥95¢ favorite, a zero-volume book, an existing live pick, or — for the only two candidates that survived all mechanical cuts (Bank of Israel Sept 1 decision, Bank of Japan Sept 17 decision) — a fairly-priced, informed book where the committed pre-market probability landed inside the spread. Under v4 rules (no-trade band from the live book, no <40¢ tails, no ≥90¢ favorites), no leg is deployable. Zero picks is the correct output, not a failure to find one.

All 120 allowlisted series were screened; 35 series had any plausible in-horizon activity and were swept live against the Kalshi public API (the DB mirror showed stale rows, so every filter number below is the live *_fp value). Only markets belonging to allowlisted series were considered. Findings:

• Tier-1 in-horizon slate is structurally empty. The big Tier-1 series (KXTRUMPADMINLEAVE, KXFEDERALCHARGE, KXARREST, KXTRUMPPARDON/S, KXSAVEACT, KXBILLS…) have no markets closing before Oct 5 — their open legs are Dec-2026/2027-dated. What does close in-window (KXIMPEACH Sep 1 at 0/1, KXALITOOUT Sep 1 at 0.1/0.6, KXKASHOUT Sep 1 at 2/3, KXLEAVEWALZ 0/1, KXLUXONOUT 2/3, KXZELENSKYYOUT 2/5) is all resolved-in-practice tails.
• Survivors of all mechanical cuts (spread ≤5¢, 5<price<95, live vol24≥500): KXCBDISRAEL-26AUG31-HOLD (84/86, vol24 3,190), KXCBDECISIONJAPAN-26SEP17-H25 (83/87, vol24 1,791), KXCBDECISIONJAPAN-26SEP17-HOLD (12/17, vol24 821), and KXKASHOUT-26JUL-26OCT01 (8/9, vol24 509 — both sides band-forbidden).
• KXLOCALLAW-CAJEWISH-26OCT01 (80/82) looked like the one interesting Tier-1 confirmation/enact leg, but live vol24 = 0 — the series' snapshot volume belonged to the 98¢ KCROYALS leg. Hard-floor reject; the zero-volume cohort is the documented phantom-edge graveyard.
• No Mentions markets surfaced; no close-after-expiration or inside-3h violations among survivors.

KXCBDISRAEL-26AUG31-HOLD — Bank of Israel maintains rate at the "August" meeting

Prob: 82% pre-market → 83% final vs a 84/86 book (only 20 contracts at the 86¢ ask). Precedent: KXFEDDECISION-26JUL-H0 resolved YES — "buy the hold rung when a hawkish repricing has knocked it well below par" — but here the hold rung sits at par, not below it.

The load-bearing fact (primary source): Reuters, July 6 — "The Bank of Israel also said it had moved its next rates decision to September 1 from a planned August 31." The Kalshi market was listed July 5 (one day before the move was announced), still shows expected expiration Aug 31 13:00 GMT, and its delay clause reads "delayed past the expiration date → No change resolves Yes." A strict expected-expiration reading would make HOLD a mechanical YES. But the operative contract "expiration date" is almost certainly the formal expiration_time of Sep 7 — a Sep 1 announcement lands inside it, so the market settles on the actual decision. Both Kalshi (84/86) and Polymarket (84/85) price pure hold-vs-cut odds, i.e. the crowd shares that reading. I credited the mechanical reading ~15–20%, worth only ~2pts of optionality.

Base case: after two consecutive cuts to 3.50% (July 6), consensus expects a hold, but Governor Yaron told Bloomberg on Aug 18 the meeting "will be a live one," with inflation at ~1.8–1.9%, a strong shekel and cheap oil all arguing for a third cut. I put hold at ~80%. Final 83 sits inside the 84/86 spread — no YES edge at the ask, and the NO side would be a forbidden 16¢ tail. Resolver deductions: −2 rulebook-reading ambiguity (net positive to YES, so not disqualifying). Reject, reason: inside spread.

KXCBDECISIONJAPAN-26SEP17-H25 — BOJ hikes 25bps on Sept 17–18

Prob: 75% pre-market → 78% final vs an 83/87 book (vol24 1,791, OI 22,248). Precedent: KXFEDDECISION-26JUL-H25 resolved NO after a 11%→38% hawkish repricing — "a hawkish repricing into a live meeting is a fade candidate rather than a signal."

Evidence: BOJ held at 1.0% on July 31 but warned core inflation will run "clearly above" 2% from H2 FY2026 (CNBC), Ueda was read as mildly hawkish (Bloomberg), and on Aug 14 Reuters sources said the BOJ is "eyeing a September rate hike and a faster pace of tightening." Unlike the July FOMC case, this repricing is the central bank's own leak, so I put a hike well above coin-flip — but a month of yen, equity and political risk (a hike-averse PM) separates the leak from the vote, and BOJ has a long record of letting hawkish expectations slip a meeting. My 78 is below both the 87 ask and the 83 bid's implied floor for a YES entry; the NO side is a forbidden 17¢ tail. The specialist-dense book already ate the leak. Reject, reason: inside spread. The HOLD leg (12/17) is the same cluster's runner-up and a banned tail.

Cluster table, conviction-exposure table and EV table are trivially empty (0 picks). Reserve requirement (≥10%) trivially satisfied. The 14 existing live picks are untouched; none reappears above as a new pick.

• Consulted: KXFEDDECISION-26JUL ladder (all five legs, resolved 2026-07-29) — hold won through a 11%→38% hawkish repricing; "buy the hold rung when knocked below par," "fade hawkish repricings into live meetings." Applied to both CB candidates; neither hold rung was below par this week. KXHORMUZ rows reviewed and set aside (different resolver family). No prior KXCBDISRAEL / KXCBDECISIONJAPAN rows existed in the store.
• Written back (2 rows, settled markets, verified this run): KXCBDISRAEL-26JUL06-C25 (the July 6 cut to 3.50% + the BOI's own announcement moving the next decision from Aug 31 to Sep 1 — with the delay-clause vs. formal-expiration reading the next run must check at settlement of the 26AUG31 event) and KXCBDECISIONJAPAN-26JUL30-HOLD (July 31 hold at 1.0% with hawkish guidance; the Aug 14 Reuters leak repriced the Sept H25 leg to ~85% a month out).

• The single number to watch before the next run: whether Kalshi settles KXCBDISRAEL-26AUG31 on the Sept 1 decision or via the delay clause. That settlement pins the "expiration date" reading for every future rescheduled-meeting CB market and is logged in the precedent writeback.
• If BOI cut odds rise materially before Aug 31 close (Yaron called the meeting "live"), the HOLD leg could dip back into the 60–84¢ core band with real edge; it would be a fresh candidate next run, not a chase now.
• BOJ Sept 17 stays specialist-dense; the only entry that would ever clear v4 bands is YES H25 at ≤my prob, which requires either a price dip toward 78 or new primary-source confirmation (e.g., a second sources-leak or a hawkish Ueda speech) that lifts the committed probability above the ask.