InTrade CEO John Delaney over-sells his prediction markets to a gullible journalist.
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Prediction markets are just an information aggregation mechanism (and also a collective anticipation mechanism), which highly depends on what the experts on the ground can discover. Prediction markets are not a magical tool. Event derivative traders are like bees; they harvest information and the expert consensus out there. Prediction markets cannot be a substitute for the credit rating agencies —that’s the biggest stupidity I have ever heard in my life. (How come a CEO can state such a crétinery, and how come Jason Ruspini can endorse indirectly such an imbécility.)
If the InTrade prediction markets had been so useful during the recent (and on-going) credit crisis and stock market crisis, then the Wall Street Journal and CNBC would have immediately reported on their magical prowess. These media didn’t put InTrade on the spotlight during the recent crises for a simple reason: the InTrade prediction markets have a low social utility at this time. It’s just a tool of convenience for people who don’t want to bother looking into the various polls. InTrade cuts time for the busy people. InTrade is like a shortcut. It is somewhat useful if you are busy, but you can live well without it if you are not. (Do read the very last line of this interview.)
Can InTrade be a substitute for the credit rating agencies? Even asking the question is preposterous. I disagree strongly with InTrade CEO John Delaney (“Prediction Markets Have a Big Role to Play“). In my view, it is wrong to overvalue the real social utility of the prediction markets. We should not lie. We should not over-sell. We should tell the truth. We should call bullshit on John Delaney’s grandiose statements.
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One important aspect of prediction markets is the trend. An upward trend can point towards increased risk, a downward trend to decreased risk.
EXAMPLE.
Market : The number of gambling addicts in the UK exceeding 400,000 at the end of 2008.
An upward trend (the price has risen from 30% to 45% in recent months) will point to increased risk.
1. Largely unnoticable to any single individual (people adapt, especially to small movements), prediction markets can pick it up and reflect it.
2. It calls for pro-active corrective measures.
3. The existing indicators can give the wrong impression, making the prediction market the only valuable resource, assuming they’re accurate. In this example, the existing indicators (number of people seeking help) have been wrong in the past, because it has become more socially acceptable for people to seek help. Another case of throwing the facts out the window, btw. Oh yes, scientists get it wrong all the time !
4. Given that the Gambling Commission won’t do another review for at least another year, prediction markets can help avoid a disaster.
Now tell me why I’m wrong Chris, in stead of ignoring me and criticizing John Delaney.Â
“the existing indicators (number of people seeking help) have been wrong in the past, because it has become more socially acceptable for people to seek help.”
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Very interesting point.
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While the most visible “prediction markets” have mostly been tools of convenience, the Fed Funds futures and related rates, for example, are not. For one thing, when markets react more quickly than other predictions by hours or days, this is more than just convenience.
Default markets are vulnerable to the most pernicious kind of manipulation, but they would not have the systemic incentive problems that precipitated the meltdown and destroyed the reputations of the ratings agencies:
http://www.nytimes.com/2008/10/23/business/economy/23rating.html?bl&ex=1224907200&en=51d89d7ad85ef46d&ei=5087
Surely one is familiar with such issues.
People take many things for granted. Complacency rules.
We may survive this crisis but the next one is buiding up quickly, and it will start in the US as well.
This one will be the big bang, the mother of all depressions, the end of civilization as we know it.
It will be caused by the ever increasing gap between rich and poor, plain and simple.
Wake up people.
“We” are way ahead of “you”. (Now there’s a line that has some hidden truths to it)
Agreed Medemi…….one thing that I’ve been sizing up for almost a decade now is “Economic Terrorism”:
There is no need for enemies to bomb or shoot their victims, all they need do is engage in a long-term campaign to ostracise what tends to be held dear worldwide: The Dollar.
And I see many signs that this is indeed happening.
For many decades global financial entities have structured most of what they own and most of what they do in terms of the Dollar (rather than a less-maipulatable, basic, Value Standard, such as Gold). They can “pump and dump” and do all sorts of other things to steer investment behaviour into the directions they wish.
Or at least it USED to work that way.
Unfortunately, they pushed their luck a bit too far and began portraying Financial Trash (“sub-prime loans” indeed!!!!) as gilt-edged, low risk Value. The mugs took the bait, and now they have big hooks embedded in their collective lips. Everyone seems to be focussed on the “fisherman” holding the rod and line (at the OTHER END!) – Nations, National Banks and the IMF.
They are desperate not to “lose it”.
They probably won’t. Just yet…….
But they’ll have a MUCH tougher time in future selling their sob-stories to the now-streetwise.
Enter the “saviours”……..
They are going to show how to make gains WITHOUT the risk of some Wall Street Mandarins, Uncle Sam, or his “Fed” rigging the Game at every turn. When a bank goes belly-up, they’ll make it MUCH more difficult (read expensive) for a Government ( which needs to retain credibility) to bail it out WITH TAXPAYERS’ MONEY!
The mandarins have bled the Dollar pretty much dry, to the point where – if challenged Big Time – it cannot survive in it’s established form.
It’s weak.
It’s overvalued.
It’s begging to be exploited.
Watch and see. It can only be a matter of Time.
The Stuff which Depressions are made of…………
Adonis
Adonis,
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we probably won’t be around when the shit really hits the fan.
I can see great prospects for the US economy in the short to medium term.
They’ve got a lot going for them and the Chinese don’t have what it takes, IMO. Innovation can only come from a truly free society.
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But the US is running a false economy based on consumption and debt. Consumption is good, but not when you’re making it impossible for a large majority to participate. I’m talking about minimum wages being far too low in the US. To compensate for this, they’ve had to export their rubbish and it looks like they’ve gotten away with it.
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Now it’s time to create a new breed of consumers in China and India, in what will probably be the largest economic expansion of all time. It will also once again camouflage the underlying fundamentals of the false US economy. This growing perception of world dominance and an economy that simply can’t fail is what will kill us off eventually, because people never learn. A true economy can only function properly when every person can be a part of it (and China and India will act as proof of that), or else we will be left at the mercy of the Gods. There will be none….
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But still, there’s a lot of time and hope left for the human race to get it right. If only people weren’t so naive and ignorant, especially in the US.
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As for the UK, there is no hope. Even though the economic fundamentals are stronger than in the US, the only thing you’re good at is travelling back in time. Best to emigrate and do it quickly. We can then use the land as one big prison, or grow algae and turn it into biofuels. Or we can go agricultural which makes a lot of sense economically because we wouldn’t need any manure…
Do you get this message when accessing the general betting forum on betdaq ?
“Sorry, the administrator has banned access to the forums for your account.”
I smell a rat.
Dear Mr xxxx,
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Our Forum Moderator has reported that you have been posting inappropriate content and therefore your forum privileges and BETDAQ account were automatically suspended pending investigation.
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Furthermore the forum is intended for use by members with funded accounts only. As you have never funded your account your forum privileges cannot be restored at this time.
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Your BETDAQ account has now been reactivated to allow you to deposit funds and following sufficient betting activity by you we may restore your forum access in the future, subject to you abiding by the Terms and Conditions as agreed upon registration.
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Kind regards,
Â
The BETDAQ Team
The UK is indeed almost without hope, but when it sinks, beware that the tsunami doesn’t swamp over the North Sea defences and swallow up the Netherlands!
More seriously, have you been swearing online again? (lol)
Email them & ask?
Adonis
Adonis,
that response I got following an inquiry. I sent another one asking for more details.-
Hi,
Â
Thanks. In order to be able to determine whether I will be making use of betdaq’s services in the future, I would like to learn what inappropritate content the moderator is referring to.
I think you owe me that much when suspending my forum access.
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Awaiting you response.
Sincerely,
xxxx Â
If it was my swearing, I can live with it. :-D However, I don’t think I’ll get another response. We’ll see.
Dear Mr xxxx,
Â
Thank you for your reply.
Â
I can confirm the reason your forum access was suspended was due to inappropriate language used, in breach of the Terms & Conditions you signed up to. I am sure you are fully aware which comments these refer to and no further explanation will be offered.
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I suggested that it would be better not to censor anything including terms like shit and piss, and that I would use them anyway. That must be what they are referring to.
What I didn’t add was that expressions like “taking the piss” and “I don’t give a shit” are perfectly legit IMO.
Maybe that’s because I’m from a different country. Whatever, case closed. The end of my betdaq career.
They don’t come much holier these days.
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Mister Ruspini,
I don’t see how your comment can be related to what I said in the post.
Sorry Chris, just a final word on this
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Adonis,
Â
FYI, I won’t be back. They’ve closed my account on my request.
I know there are at least a few people who are not going to be happy about this, but that’s the way it is in Big Brother land.
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I still believe I’ve been treated unfairly. It was a constructive comment and I was trying to get a point across. Unsuccesful in doing so, the forum moderator decided to ban me from the forum in stead of doing his/her job and moderate (edit) and/or give me a warning.
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I don’t have many regrets, but I’m really sorry I ever “set foot” on UK soil. How was I supposed to know ? Things are quite different here. You show good intention and you are granted the freedom to express your ideas/thoughts/beliefs, whatever they are.
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