Daily Archives: July 4, 2008

The CFTC is going to close the comments in 3 days. We have 3 days left to convince the CFTC to accept FOR-PROFIT prediction exchanges (e.g., InTrade USA or BetFair USA), and counter the puritan and sterile petition organized by the American Enterprise Institute (which has on its payroll Paul Wolfowi

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ADDRESSES: Comments should be sent to the Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581, Attention: Office of the Secretariat. Comments may be sent by facsimile to 202.418.5521, or by e-mail to [email protected].

Reference should be made to the &#8220-Concept Release on the Appropriate Regulatory Treatment of Event Contracts.&#8221- Comments may also be submitted through the Federal eRuleMaking Portal at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&amp-log=linklog&amp-to=http://web.archive.org/web/20080930170145/http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Bruce Fekrat, Special Counsel, Office of the Director (telephone 202.418.5578, e-mail [email protected]), Division of Market Oversight, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581.

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THE MIDAS ORACLE TAKES:

– CALL TO ACTION: Let&#8217-s fight so that the CFTC allows the FOR-PROFIT prediction exchanges to deal with &#8220-event markets&#8221-.

– In the for-profit vs not-for-profit debate, our prediction market luminaries, doctored by Bob, are on the wrong side of the issue.

– The definitive proof that FOR-PROFIT prediction exchanges (like BetFair and InTrade) are the best organizers of socially valuable prediction markets (like those on global warming and climate change).

– Analysis of the HedgeStreet&#8217-s comment sent to the CFTC.

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BACKGROUND INFO:

– CFTC’s Concept Release on the Appropriate Regulatory Treatment of Event Contracts&#8230- notably how they define &#8220-event markets&#8221-, how they are going to extend their &#8220-exemption&#8221- to other IEM-like prediction exchanges, and how they framed their questions to the public. Here are the comments sent to the CFTC.

– The BusinessWeek news article about the CFTC&#8217-s concept release.

– The Arnold &amp- Porter lawyer&#8217-s take. &#8212- (PDF file)

– The Schulte, Roth &amp- Zabel lawyers&#8217- take. &#8212- (PDF file)

– The Sullivan &amp- Cromwell lawyers&#8217- take. &#8212- (PDF file)

– Michael Giberson&#8217-s economic take.

– Chris Hibbert&#8217-s libertarian take.

– Tom W. Bell&#8217-s libertarian take.

– The American Enterprise Institute’s proposals to legalize the real-money prediction markets in the United States of America

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COMMENTS TO THE CFTC

– Very soon, two prediction market organizations and one VIP will submit their comment to the CFTC.

– What Vernon Smith told the CFTC. &#8212- (PDF file)

– Jed Christiansen&#8217-s pragmatic take. &#8212- Final draft – (PDF file) – His comment to the CFTC – (PDF file)

– The International Swaps and Derivatives Association&#8217-s comment to the CFTC – (ISDA) &#8212- (PDF file)

– Jason Ruspini&#8217-s comment to the CFTC &#8212- (PDF file)

– Tom W. Bell&#8217-s petition, which will be sent to the CFTC. &#8212- (Jonathan Gewirtz is in.)

– HedgeStreet&#8217-s comment to the CFTC. &#8212- (PDF file)

– A young economist rebuts the American Enterprise Institute. &#8212- (MO mirror) &#8212- Comment to the CFTC – (PDF file)

– Tom W. Bell rebuts the American Enterprise Institute.

– Robin Hanson&#8217-s comment to the CFTC. &#8212- (MO mirror)

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APPENDIX:

Paul Wolfowitz&#8217-s profile at the American Enterprise Institute

– How the neo-cons drove the United States of America into the unecessary Iraq war

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TOM W. BELL: Thanks, Chris. Thanks, too, for being such an effective gadfly. I might well have blown off the whole exercise if you had not kept blogging about how you were awaiting my comment!

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&#8220-Gadfly&#8221- is a term for people who upset the status quo by posing upsetting or novel questions, or attempt to stimulate innovation by proving an irritant.

The term &#8220-gadfly&#8221- (Gk. muopa) was used by Plato in the Apology to describe Socrates&#8216- relationship of uncomfortable goad to the Athenian political scene, which he compared to a slow and dimwitted horse. The Bible also references the gadfly in terms of political influence- The Book of Jeremiah (46:20, Darby Bible) states &#8220-Egypt is a very fair heifer- the gad-fly cometh, it cometh from the north.&#8221- The term has been used to describe many politicians and social commentators- in modern Hebrew, which knows many more idioms than those used by Jeremiah, gadfly is &#8220-mekhapes pagam&#8221- literally &#8220-fault finder&#8221-.

During his defense when on trial for his life, Socrates, according to Plato&#8217-s writings, pointed out that dissent, like the tiny (relative to the size of a horse) gadfly, was easy to swat, but the cost to society of silencing individuals who were irritating could be very high. &#8220-If you kill a man like me, you will injure yourselves more than you will injure me,&#8221- because his role was that of a gadfly, &#8220-to sting people and whip them into a fury, all in the service of truth.&#8221-

In modern and local politics, gadfly is a term used to describe someone who persistently challenges people in positions of power, the status quo or a popular position. The word may be uttered in a pejorative sense, while at the same time be accepted as a description of honorable work or civic duty.

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I&#8216-m a modern-day Socrates&#8230- !!!&#8230- :-D

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Previously: Let’s Tell the CFTC Where to Go. – by Tom W. Bell

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PROF TOM W. BELL, PLEASE, DO SKIP THE PAGAN CELEBRATIONS, AND, PLEASE, DO RETURN TO YOUR DESK TO FINISH THE DRAFT OF YOUR COMMENT TO THE CFTC. THANKS FOR YOUR PRAGMATIC (NOT ETHEREAL) CONTRIBUTION TO THE FUTURE OF HUMANITY. (There is a hidden slam to Robin Hanson in this title. I wonder whether peop

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Tom W. Bell rebuts the puritan and sterile petition organized by the American Enterprise Institute (which has on its payroll Paul Wolfowitz, the bright masterminder of the Iraq war).

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Tom W. Bell:

The CFTC should not limit &#8220-no action&#8221- status to markets run by tax-exempt organizations. The no-action letters that the CFTC issued to the IEM emphasized not the nature of the hosting institution, the University of Iowa, but rather the business model adopted by the IEM itself. Profitability could not have mattered, as tax-exempt organizations can and do earn profits (indeed, as their burgeoning endowments demonstrate, many universities earn immense profits). The CFTC apparently cared only that the IEM did not plan to profit from charging traders commissions. A tax-paying organization could satisfy that condition just as easily as a tax-exempt organization could. In either event, price discovery would flourish and consumers would win a safeguard against getting fleeced.

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– The American Enterprise Institute’s proposals to legalize the real-money prediction markets in the United States of America

– In the for-profit vs not-for-profit debate, our prediction market luminaries, doctored by Bob, are on the wrong side of the issue.

– The definitive proof that FOR-PROFIT prediction exchanges (like BetFair and InTrade) are the best organizers of socially valuable prediction markets (like those on global warming and climate change).

– Analysis of the HedgeStreet&#8217-s comment sent to the CFTC.

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APPENDIX:

Paul Wolfowitz&#8217-s profile at the American Enterprise Institute

– How the neo-cons drove the United States of America into the unecessary Iraq war

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