[Content warning: Swearing. Lots of it.]
[Update: I got my principle back, minus a few Dollars for fees and a few Euros because the Dollar got stronger.]
So during the sedisvacancy I put $500 into Intrade, betting most of it on the conclave’s outcome. Yep, that’s totally legal canonically, though I’m not quite sure about Germanically. If they hadn’t canceled all positions a few days before the conclave, I would have won, by my calculation, $82.41. Now it looks like even my original investment is in danger.
No need to worry about my wellbeing, I can afford the loss, or I wouldn’t have been gambling with that money in the first place. This isn’t my lunch, it’s my Nexus 10. Still, I am really fucking pissed off and need to vent a little.
Random points of random:
- Conspiracy theory: When the American authorities shut Americans out of Intrade for flimsy reasons a few months ago, did they know something?
- Alternative speculation: Or otherwise, did the exodus of American customers break the camels back?
- Incredulous swearing: How the fuck do you need external auditors to tell you the balance on your bank accounts is $700000 less than in your computer system? This ain’t rocket surgery.
- Policy proposal: The directors of a financial service company should have to pledge their personal property on its survival. Not because there would be much to collect but to align incentives.
- Insight: Perhaps illiquid markets are illiquid for reasons.
- Dire prediction: For the foreseeable future, this is the end of prediction markets. Governments don’t like them, so there will be no properly regulated versions. The main prediction market advocates are libertarians anyway, so basically nobody wants prediction markets regulated to the the degree that is objectively necessary for them to work. And the free market is plainly unable to do it. Sorry GMU econ department, come back in 50 years.
If you wanted to have a punt on the papal conclave, why didn’t you stick with a bookie? Okay, maybe America doesn’t permit online betting (I know nothing about it) but far as I’m concerned, stock markets are gambling and if I’m going to gamble, I’ll stick with the fellas shouting the odds on the racecourses.
Sorry to hear you got stung, but in future why not just buy a lottery ticket if you want to waste money?
No, that’s harsh. But according to the Irish satirical magazine, “The Phoenix”, which did a bit about the woes of Intrade in its issue of 11th January this year because the late John Delaney, its founder, was Irish:
“Intrade filed accounts which raise questions over payments made into bank accounts controlled by the founder of the firm, John Delaney…According to the 2010 accounts for Intrade…over $1.2 million was transferred into accounts controlled by Delaney. The nature of these payments is unclear because of insufficient documentation, the accounts state….A note from the Intrade accounts also states that the current directors are aware of issues identified related to ‘significant financial inaccuracies’ in the company’s internal accounts for previous years”
So it looks as though, for at least three years, the accounts were in a dodgy state – sufficient reason for the U.S. government to take action, I would have thought? And another reason why I don’t think prediction markets are this shiny new improved instrument of policy-making which will be impervious to the bad old manipulations of the stock market because goodness, why would anyone want to cook the books to make more dough?
OK, several points here: