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- Hacker News
- >Trump Media may soon sell early access to the president’s Truth Social posts. Think about what this means. This is how the president announces war; every embassy on earth has to maintain a Truth Social account just to stay informed of American policy.
He is already so beyond the pale this doesnt even move the needle.
by Fizz43 - If they try this, multiple random people will write bots to republish everything instantly. The cash gusher they expected will turn into a trickle and the white house will look like a bunch of greedy Ferengi that lack the lobes to pull off a basic swindle. It's guaranteed to be an instant loss. I'll laugh pretty hard if they go ahead with it.by beloch
- The only true winners in those prediction markets are the insider whales that already know what will happen.
Anyone who is not an insider is a loser.
by rekabis - > Trump Media may soon sell early access to the president’s Truth Social posts.
Think about whether the spirit of the domestic/foreign emoluments clause would be okay with this. I'm sure some will argue there's enough layers of BS in this scheme that it's totally fine.
Ethics and judgement aside, I think startup founders can learn a lot from this administration as to how "successful" people twist things in their favor. The industry is full of it.
by avaer - The law only matters if there’s someone willing to enforce it. We learned from Trump’s first term that no-one is willing to enforce the emoluments clause.by dabinat
- If you ever thought “prediction markets” were a good idea, you should leave economic judgement to other people. Go take up gardening or something instead. It’s a hack reference at this point I know, but it’s Idiocracy-level stuff.by dwb
- > We built a superior information aggregation machine for the economy
Wow, no you built an avenue for corruption, insider trading and problem-gambling, and you should have known this beforehand. Would have known it beforehand if you'd bothered to consult with non-economists.
by Nursie - I read a sci-fi story years ago that had prediction markets in it that helped markets become more efficient. I thought it was a good idea at the time.
What neither I nor the author anticipated was that the easiest way to make the markets "efficient" was to rig them.
In hindsight it's obvious, but optimism is one of the most powerful blinders out there.
by pbohun - I don't like prediction markets, but I think a lot of people in this thread are assuming that gambling vs. not is clear cut.
Insurance was illegal at different times in history because it was considered gambling. Ditto for commodity trading.
Even you look at the structure of a futures contact, the basics look really similar to a bet that can be traded with someone else.
The main differences are the regulatory environment, and the intention the actors in the market have.
Commodities, options, and futures are all legitimately used to hedge against future outcomes. The "gamble" (placing money on a future outcome) is a mechanism for the main goal: protection against instability.
When you look at stocks and - in particular - derivatives, it starts to look a lot closer to how gambling is structured. I'm pro stock market, but that doesn't mean I won't admit that the line between it and gambling is pretty hard to draw. It's a lot more grey than people give credit for
by mind-blight - Is their "greyness" between gambling and day trading? Sure.
Prediction markets are obviously, blatantly, gambling. There is no "greyness", we've skipped the slippery slope and gone straight to the bottom of the ravine.
by class3shock - I mean I get how there are benefits to society from crop futures and insurance. I don't get how there are from an election prediction.by Glyptodon
- > Insurance was illegal at different times in history because it was considered gambling.
And it was, in fact, gambling. You could take out a life insurance policy on anyone without any relationship with them.
by waisbrot - My position is that prediction markets are bad and harmful but so are all mainstream stock markets. They're all prediction markets. People collaborate to pump up the value of specific assets or contracts, leading to undesirable outcomes.
It would be dishonest to ban prediction markets without banning stock markets.
The best which can be done, under the current system, is to punish unfair information asymmetries, which is practically impossible to do reliably... And even if we could find a way to punish it reliably; what would happen is that most rich people would end up in jail. Information asymmetry is almost never fair and it's how people make big money these days.
I think the best solution is to create conditions to allow people to earn big money in other ways; ways which create value. If there were other ways to make big money besides unfair information asymmetry, then skilled people would find it easier to do that instead...
Unfortunately, skill/talent does not allow you to gain an information advantage; only social connections do. So the current system is really bad in terms of wasting specialized skills/talents... Current system takes talented people and re-orients them towards adversarial games of deception where they're just a number in a sea of increasingly desperate untalented people who are better at playing the deception game... And the talented folks eventually lose their talents through lack of practice; they're so focused on learning ways to trick people and algorithms, that their actual talents atrophy; by the time they become well known, if they ever do (most don't), they've become mediocre; corrupted by their participation in the process of trying to become relevant; their main talent always takes the back seat.
by jongjong - You could ban stock market trading but the market itself is a very useful vehicle for investment and has democratized wealth and retirement planning to some extent.
How to ban trading? You could heavily addon tax profits from short term trading under 3 months at 90% say, tapering to zero as time increases maybe 2 years. With zero ability to offset any losses with other tax forms.
Shorts, options et. included unless it can be proven as part of a bigger trade or insurance but then apply to bigger trade.
This could also apply to market makers making that closer to a public service.
by hahahaa - I disagree with this - plenty of people treat stock as just wanting a share of profits/ownership and not as value speculation. That said, I do think we should be making rules that devalue speculation, perhaps turn-based trading since there's no particular benefit to the world from high frequency trading or value discovery happening in 5 milliseconds instead of 5 seconds, and making it so that being publicly traded requires not having controlling owners or preferential share classes.
Edit: and with prediction markets you don't own anything. Even with commodity futures you can end up having to take possession of cows or something.
by Glyptodon - Put the same energy into championing regulation then. Don't walk away from a mess you claim to have helped create. (which the OP may indeed be doing, but it isn't clear they are, hence the chiding)by ggm
- The people regulating this are the people profiting from it. Championing change isn't too different from prostrating in front of the King.
Your advice might work in a different world.
by avaer - is this the author's attempt at washing their hands of the damage they've done? Smart enough to win all these prestigious economics awards and hold all these prestigious positions but too naive to be able to predict the consequences of what they've been fighting for? Things that were, in my opinion, very easy to predict, given all the regulation in place around existing markets. What does this say about the author and the field of economics? Every day we get to play the "dumb or awful?" game.by gaze
- > And I know exactly what that costs: Before I was an economist, I was a teenager working for bookies on Australian racetracks. I once took five dollars from a coworker who “didn’t bet” and put it on number one in the next race. Six months later he was betting thousands a race and stealing from his own family. Compulsive gambling destroys lives — and the families it wrecks have no lobbyists.
> I don’t claim to know the exact right policy answer for America. But I know we never even had a grown-up debate.
If you've seen the destruction caused by something and can't figure it out, maybe you have a problem?
And let's be honest: the idea of "debating" things that are obvious is often one of the primary ways by which indefensible things are legitimized.
by ElProlactin - This reminds me of how people who worked for Facebook despite it being obvious that nobody with moral fiber should work for Facebook are more listened to when criticizing Facebook than people who realized the obvious to begin with. It's such a farce.
But it also reminds me that prediction markets are one of those things that are transparently a terrible idea because they create problematic incentives, and not just because people ruin their lives gambling. If you can make $1 million by triggering something that or getting somebody to trigger something that basically has no business happening, whether it's stripping on the Senate floor, causing a volcano to erupt, or crops yields to reduce by secret herbicide dusting, or any other bologna, somebody will do it if the balance makes it worthwhile. Likewise, they give people reasons to vote that are negative - "I have $100 on prop XYZ passing, of course I support it." (Though side note: the ubiquity of betting being super terrible for society because people can't handle gambling at all is one of those things that I've been super surprised by that seems to have good evidence now. I guess because gambling mostly just doesn't do it for me to the degree that I find it shocking just how addictive it is and just how much it exacerbates bad situations for many people.)
And I can't see how there's any benefit that's bigger than the problems. If prediction markets are better than Nate Silver, why is it worth all the problems to society for that extra accuracy margin? I can see why individual actors might find value, but I don't see how their value accrues to society in any way that makes it worth it.
by Glyptodon - The same perverse incentives apply to the stock market too. "I'm short United Healthcare, someone should go shoot their CEO." Or "I'm long defense stocks, I guess I'll vote for someone who will start a war."
People mostly don't do this because most of the things which you could do to move a stock price are highly illegal, and anyways there are laws against market manipulation. And I doubt people vote to benefit their portfolio (except for homeowners) because there's so little chance that any individual person's vote will result in a tangible benefit to the corporation. People mostly vote out of a sense of duty; the chance of your vote individually actually changing a tangible outcome is miniscule.
The problem seems to be in what it's used for. Prediction market supporters never intended it to be used primarily for sports gambling, much less used to override state sports gambling laws at the federal level. That was never part of the original proposal for prediction markets. I can see a legitimate use case for e.g. the Fed using conditional prediction markets to inform monetary policy; in that case, even a small increase in marginal accuracy/certainty could plausibly be worth billions of dollars to society.
Everyone here seems so sure that they knew prediction markets were a bad idea. But it seems to me that most of the harm comes from the CFTC regulated securities loophole. Without that, prediction markets on sports would be limited to states where sports gambling was already legal, and the marginal harm would be minimal. And I didn't see anyone predict that mechanism; if they did, they never got much traction. This is exactly the sort of problem prediction markets, in their ideal form, are meant to solve.
by fwipsy