Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Treason in the Futures Markets

paulkrugman.substack.com

Post reply on HN
Print view View original

41–50 of 67 posts

Re: Treason in the Futures Markets

#41

Post by basilikum »

patall wrote: post #37

So, who is paying the bill here? I am assuming the insider trading itself is zero-sum (its obviously different if what's happing happens only to allow insider trading) and while some (like passive investors like me that buy every month) win a bit, others lose a bit, someone loses big on the futures market. Is that the high frequency and quant traders? Because I assume, someone must be really mad? Especially since, an…

It's you. Every trader who does not have the insider information loses. That's how markets work after all. They collect information by rewarding the use of information. Anyone who has information and uses it is rewarded and anyone who does not is punished.

Even when you are a passive investor you lose. You essentially buy shares at random points in time. When that point happens to fall between the trading of an insider and the public disclosure of the insider information you will get a worse price for that trade.

It isn't even relevant whether the insider buys stocks or other securities directly or trades in futures instead. All information you enter into the market through trades permeates the whole market through arbitrage regardless of where you enter that information.

Re: Treason in the Futures Markets

#42

Post by DLA »

libertine wrote: post #15
rich_sasha wrote: post #4

While I agree it is very suspicious, needs investigating and far, far greater oversight in general, I'm not sure there is enough to conclude this definitely is insider trading. Markets are weird. People trade for weird reasons, sometimes gently and in small size, sometimes aggressively and all at once. We're zooming in at a short window just before the tweet. If you look at random windows you'll find these too. 6.49…

I'm sorry but I'm finding it hard to believe this is a real comment. How's this a coincidence? Trump has boasted about this, that's the point we're in.[0] They're announcing in a newsletter a fund raising where they will share national secrets with donors.[1] This is literally people paying to get access to privileged information, in a fund raising for what? Like it's openly being said that if you pay enough money, y…

[flagged]

Re: Treason in the Futures Markets

#43

Post by rich_sasha »

patall wrote: post #40
rich_sasha wrote: post #4

While I agree it is very suspicious, needs investigating and far, far greater oversight in general, I'm not sure there is enough to conclude this definitely is insider trading. Markets are weird. People trade for weird reasons, sometimes gently and in small size, sometimes aggressively and all at once. We're zooming in at a short window just before the tweet. If you look at random windows you'll find these too. 6.49…

Maybe a naive question: those transactions are traceable. But we assume this admin will not turn itself in. However, such transactions in other nations would be investigated. Are there cases of similar transactions before the US presidents tweets in i.e. Europe?

There's plenty of very suspicious trades in US politics, and presumably European ones too. Actually on both sides of the aisle. Senators putting trades in sectors that overlap with their committee memberships, or these trades appearing in their "blind trusts", with "no input" from the senators. There is so much of it that I am sure there is plenty of insider trading. On average, if you blindly follow their trades, will you make money? The evidence is mixed, and made worse by the fact that the disclosures can be made on paper (pen and paper is allowed!) and the records not all electronified. You can imagine the juiciest trades are probably "disclosed" on a napkin if at all.

There's no doubt it's very dirty business. I just find it lazy thinking to say, hey this one is very suspicious therefore definitely criminal.

Re: Treason in the Futures Markets

#44

Post by ang_cire »

epolanski wrote: post #17

And very soon, as economics and behavioral sciences suggest, we will have world events directly influenced by people having the incentives to make them happen for financial gains only. There's a reason we have banned and prosecuted any hint of insider trading or match fixing for centuries. Yet we play dumb on way more serious risks, allowing betting on whether a country will attack another and labeling it "informatio…

"A man's rights rest in three boxes. The ballot box, jury box and the cartridge box." - Frederick Douglass

Re: Treason in the Futures Markets

#45

Post by rich_sasha »

rubyfan wrote: post #11
rich_sasha wrote: post #4

While I agree it is very suspicious, needs investigating and far, far greater oversight in general, I'm not sure there is enough to conclude this definitely is insider trading. Markets are weird. People trade for weird reasons, sometimes gently and in small size, sometimes aggressively and all at once. We're zooming in at a short window just before the tweet. If you look at random windows you'll find these too. 6.49…

I agree the article could include more data around the frequency and size of these kind of trades around other events and for a longer period. However as the article notes the time and size of this particular series of trades makes it look suspicious and that’s all one can say with certainty at this point.

I'm happy with "very suspicious". But IMO you need more to title an article "Treason in the Futures Markets: People close to Trump are trading based on national secrets" based on "very suspicious".

Re: Treason in the Futures Markets

#46

Post by rich_sasha »

u1hcw9nx wrote: post #6
rich_sasha wrote: post #4

While I agree it is very suspicious, needs investigating and far, far greater oversight in general, I'm not sure there is enough to conclude this definitely is insider trading. Markets are weird. People trade for weird reasons, sometimes gently and in small size, sometimes aggressively and all at once. We're zooming in at a short window just before the tweet. If you look at random windows you'll find these too. 6.49…

The quantity makes it more than weird. This is not just price change or manipulation. Prices can move big amounts for weird reasons without significant changes in trade volumes. The volume of sales makes it significant. $580 million sales of oil futures and probably similar amount of buys in stock futures means $1T quick billion move. Nobody makes half trillion __trades__ for weird reasons and this was too short to b…

It is very weird and suspicious but not out of the realms of possibility. And I don't say it because I'm vouching here for the honesty of this administration. Crude oil contracts (WTI and Brent - both same size) traded roughly 3m contracts that day. 6,200 quoted by FT is about 2% of that. It's a lot - crazy much. But not crazy-crazy-someone-is-defo-a-crook crazy.

It's not even a given at this point that all these trades come from one person. In fact I doubt they do - because most brokerages would simply not allow you to put this trade. It could well be a huge trade, but a fraction of the 6200 that changed hands, then HFT algos jumping in in the action.

Which is all investigable, and should be investigated.

Re: Treason in the Futures Markets

#47

Post by fc417fc802 »

yifanl wrote: post #35
magpi3 wrote: post #19

Earlier quoted context omitted.

> Even if they found the culprits, what's a judge's verdict against a presidential pardon? This is bad logic. A presidential pardon at least exposes the corruption, and exposing the corruption is more important than a prison sentence.

Is there anyone who isnt Trump4Life who still needs to be convinced theres corruption happening very high up in the government? We've very little doubt its happening, and it does us no good if there arent actions taken against it.

It still needs to be methodically exposed. The process is important.

Re: Treason in the Futures Markets

#48

Post by QuadmasterXLII »

Grimburger wrote: post #24
QuadmasterXLII wrote: post #8

Earlier quoted context omitted.

*580 million

There was equity futures and oil contracts both at the same time. Total risked with zero public news was approx $1.5B

Sure, I believe that. But not 580 Billion. (I sometimes wonder how much damage has been done to the United States political system by naming them million, billion and trillion. Would we all budget carefully and precisely consider the relative impacts of different scales of expenditure if a thousand thousand was a woozle, a thousand woozle added up to a brillig, and a thousand brillig was a fearsome vogon?)

Re: Treason in the Futures Markets

#49

Post by kasey_junk »

pbhjpbhj wrote: post #30
jfengel wrote: post #9

"Treason" seems a bit much. We put a very high bar on that term because it comes with the most serious consequences. The fact that nobody seems particularly surprised by it suggests that the damage is long since done.

You don't think starting a war apparently to distract the media, then lying about peace talks solely to drain money from the markets is treasonous? How about when combined with all the tariffs, which seem designed to be market levers and/or just vindictive acts? Pushing businesses to the edge, plunging people into poverty, so your cronies and you can drain money from the stock market? Or taking bribes using crypto? O…

Treason means something very specific in the US, intentionally. It’s one of only a couple of criminal acts defined in the constitution.

“Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort.”

So no. None of those things is treason. This administration throws the word around loosely, like many authoritarian regimes, but the founders had direct experience with a dictator who used treason charges as a political weapon and tried to ensure that wouldn’t happen here.

Re: Treason in the Futures Markets

#50

Post by readthenotes1 »

ang_cire wrote: post #44
epolanski wrote: post #17

And very soon, as economics and behavioral sciences suggest, we will have world events directly influenced by people having the incentives to make them happen for financial gains only. There's a reason we have banned and prosecuted any hint of insider trading or match fixing for centuries. Yet we play dumb on way more serious risks, allowing betting on whether a country will attack another and labeling it "informatio…

"A man's rights rest in three boxes. The ballot box, jury box and the cartridge box." - Frederick Douglass

And others before him https://en.wikipedia.org/wiki/Four_boxes_of_liberty
Post reply on HN