Survivor Raises Liu’s Profile: Joel Rivera vs John Liu – Who is the bigger fool?

Separately from the article below, the Survivor series has brought John Liu into the spotlight. This has brought competition for the title of reigning New York idiot councilman with strong contender, John Liu, being quoted in many articles that mention the show.

Have you ever read the ‘Weird News’ sections of the paper about a proposed law that was just eye roll inducing? If it occurred in New York City you can count on the pea brain of city councilman Joel Rivera somehow being involved. Some of his more embarrassing proposals include limiting the number of fast food restaurants within certain proximity of each other and banning flavored cigarettes. Unfortunately, Comrade Rivera’s term runs through 2009 so more statist stupidity can be expected.

John Liu is another anti-capitalist politician whose main output is self promoting press releases. Unsurprisingly, New York Times reporters fall over themselves to see who can go the furthest to flatter both of them. A very revealing proposal of his was for, “authorities track and fine restaurants that send workers to areas with high crime”. The dog whistle message here couldn’t be clearer; Liu is not only a racist but an unabashed statist as well. He is currently making a name by attacking CBS’s Survivor, calling the idea of race based teams, “preposterous”. Why that is the case he can’t be bothered to articulate.

Ironically Joel Rivera and John Liu are both the sons of thieves. John Liu’s father was convicted of bank fraud in 2001, while Jose Rivera maintained a veneer of respectability by becoming a State Assemblyman. The apple doesn’t fall far. It’s a shame that such blatantly statist sentiments get so much uncritical press. The market decides what ideas are good and that’s the only way it should be.

Amazing Races – CBS Survivor Betting Odds Listed

Wagerweb.com has posted odds for a several bets on the series.

http://www.wagerweb.com/pressreleases/2964.html

Winner's Ethnicity of Survivor - Cook Islands:

Caucasian +225 (2.25 to 1)
Asian American +200 (2 to 1)
Hispanic +275 (2.75 to 1)
African American +240 (2.4 to 1)

Asians are favoured with Hispanics least likely to win.

NABH Housing Market Index and the S&P 500 - Pt 2.

Below is an excel file with the data and chart. I added interest rates as a reference.

http://www.nastybrutishandtall.com/nahb%20lagged.xls

Insiders should not only be permitted to trade, they should be encouraged

Prediction Markets and Insider Trading from Bainbridge, my take below:

Banning traders with the best information does not benefit any of the market participants or the market itself. Most people would agree that insider participation ensures market pricing is accurate. Excluding their knowledge will cause the market to decrease in relevance since it couldn’t be relied on to aggregate all available information about an event. Even defining what constitutes an “insider” for news/event related contracts would be a bigger rules debacle than the NKM contract.

Traders don’t benefit from mispricings; a winning trade due to banning of knowledgeable participants sounds like luck or some kind of subsidy rather than skill. Decision markers will also suffer if the markets do not accurately reflect the odds of an event occurring. An academic might make the argument that liquidity would suffer if it was known that insiders were able to trade. However isn’t that already implicitly the case with every prediction market contract currently? Traders, so far, don’t care if there are insiders trading.

Defining an insider would be an impossible and silly task. Would a meteorologist be banned from trading weather contracts? After all they can use fancy modeling equipment and satellite data that most people wouldn’t be able to access. Being an insider is still no guarantee of a win. Even the ultimate insider on the NK missile contract, Kim Jong-il himself, would have lost if he longed the contract on TS. The exercise of defining an insider for most of the news contracts quickly turns absurd. Of course they shouldn’t be banned, they can’t even be defined! Does any knowledgeable market participant have an obligation to withhold information? Since it would be to their detriment to do so, who would benefit? It’s not the traders who are trading on off-prices. And it can’t be decision makers who are making decisions without using all the information that could be available.

The very idea that there is some special type of “insider knowledge” that shouldn’t be used for trading is an advancement of the idea of information socialism. There will always be parties with more information than the general public and those knowledgeable participants should be able to profit from their superior knowledge. What would be the point of acquiring it otherwise?

Free markets work. If demand exists for a market free of insiders than existing firms will profit from moving into that space. Any exchanges banning insiders would be a big step in the wrong direction.

Banks Balk at Gambling Enforcement Crackdown - WSJ

Banks Balk at Congressional Plan
To Cut Off Cash From Net Casinos

A group representing 5,000 small banks is opposing a tool lawmakers hope to use to stop illegal online gambling, posing a challenge to what is widely seen as the government's best shot at cracking down on the activity.
...
The U.S. Chamber of Commerce, in a recent letter to U.S. senators, said it is concerned about deputizing banks "to enforce social policy."

Finally some good news!

"This would be a huge blow" to banks, says Ellen Zimiles, chief executive of New York-based Daylight Forensic & Advisory, which advises banks on regulatory compliance. "It would be extremely challenging, and it would take their efforts away from all the other things they're trying to do right now," such as helping authorities flag terrorist financing.

Apparently the "terroism" excuse works both ways.

Chart of the Week

Stolen directly from Gartman.

HedgeStreet Hurricane Contracts

In a flurry of press releases and an extremely well put together How To, HedgeStreet announced their new Hurricane contracts. Unlike the TradeSports weather contracts these allow a trader to bet on the amount of damage during the entire season as well as damage by individual hurricanes.

The conference call sounds like it will be something worth listening to:

The teleconference will be attended by Russell Andersson, VP Instrument Origination and a Co-Founder of HedgeStreet; Dr. Robert Dubil, Chief Market Strategist for HedgeStreet, Bill McIntosh, Vice President of Marketing for HedgeStreet, and Gary Kerney, Assistant Vice President of the Property Claim Services unit of Insurance Services Office, Inc (ISO), which provides underlying data for the contracts. All four will be available to answer questions and discuss the contracts, their structure, and the many ways they can be used.

The call will take place at 1pm EST and can be accessed at (866)-244-4530.

TradeSports Contract Suggestion - Aybody care to put a price on the contract?

Asks The Unknown Professor at Seeking Alpha.

Sure! I'll make a two way market in anything, but you won't like the spread.

Step Up Lieberman - Blogs, Social Networks, and Betting

First was the Lieberman surprise. Then this weekend 'Step Up' blew away projections and more than doubled estimates. Internet marketing from blogs and social networks were the prime factors for each.

While the funding raised by DailyKos and MoveOn wasn't a factor in the primary, the mobilization of undecided voters was unprecedented. By making the focus of the primary the war, bloggers were able to sway moderates to vote for Lamont without pushing a centrist agenda. Will the bloggers be able to sustain the momentum until the real election? Can they really get voters to elect an amateur single-issue candidate against their own best interest? Maybe, but I wouldn’t bet on it.

Step Up is a cliché dance film which racked up over $20m its first weekend. How did it beat estimates of $8m so handily? There was no big marking push, no famous director or big name stars (although Channing Tatum is well on his way). But the movie does have nearly 100k myspace friends due to savvy use of social network marketing (at the end of the trailer was a myspace address not a .com) . They held an online dance contest on myspace that would allow the winner to perform in a music video. The promotion was interactive with a hint of reality TV and a chance at stardom. Very slick. With an audience 70 percent female and 72 percent were under 25 years old, according to boxofficemojo.com, what better way to reach them?

For this target audience, critics don’t matter. Participation and interaction do. Keep that in mind if you plan on shorting SOAP, the old metrics just don’t apply.

TradeSports Won’t Reverse the NKM Contracts and They’re Right - The Trade is Settled

By now anyone who follows prediction markets is familiar with the TradeSports North Korea Missile contract debacle. Chris Masse did an excellent job covering and publicizing the case.

The Edmunds email rationally covers the reasons that TradeSports was wrong in expiring the contract at zero.

Several commentators on the incident wrongly suggest that TS should go back and compensate the traders of the contract. That would be a mistake. Refunding the bets after the fact won’t increase confidence in the market.

Time to Move On

Right or wrong, once a contract settles the question of who should win is a dead issue. Any clarification can’t take place after the trade is done. No trader wants a market that works that way. The fact TS provides the exchange and is not taking bets gives them a strong case to stick to their decision. Pushing for reforms (which TS has already put in place) is a good way to minimize expiry source confusion. Once traders know the rules and how contracts will be handled they will adjust.

This won’t be the last time that a contract is disputed on the exchange. What will hurt the market more than the current decision is if bets are reversed after settlement, turning the winners into losers. Traders won’t know when a contract really settles. It would also be a bad precedent for TS to hand out refunds to the bettors. Refunds now would taint any future contract disputes and cause inconsistency based on the size of the market. In other words, TS won’t be able to make refund larger volume contracts if there was a legitimate dispute. So the refund decisions would be related to volume not legitimacy, and that’s not a consistent way to run a market. The way to head that off now is by not giving refunds in the first place. TS has chosen a path and is obligated to stick to their guns.

No one (that I’m aware of) is suggesting that the contract winners’ trades be reversed and credited to the losers. Why should the funds to compensate the contract losers come out of TS’s pocket? If the contract really should have expired at 100, aren’t the current winners unjustly enriched?

TradeSports dropped the ball in the handling of this contract. Clarifying the rules for next dispute is what traders should focus on.

What counts for source confirmation? A press release? An anonymous source? A blog? A personal email? Recording of a phone call? What if the source won’t confirm either way?

Refunding traders who lost won’t fix the market or increase confidence of its participants.

Is the Justice Department going to steal BetOnSports US Client's funds?

This article suggests it's a possibility: http://www.nytimes.com/aponline/us/AP-Online-Gambling-Money.html

But Hanaway said if BetOnSports doesn't return the money, the U.S. government has every right to seize it.
Hanaway contends the bets were placed illegally, violating the 1961 federal Wire Act. That means the government could take the money to settle legal claims in the same way it takes money from drug cartels, Hanaway said.
''In all kinds of crimes we forfeit money that someone has paid,'' she said.

The article also states that, "last month's federal restraining order requires BetOnSports to return any money that American customers have tied up with the site."

The tie up is with the payment processors who are refusing to do business with BetOnSports since the charges last month. The message that the prosecutors sent was heard loud and clear. The payment processors are staying out of the way to avoid prosecution and business disruption.

This allows the "Justice" Department to disingenuously claim they are only going after the bookmaker, knowing full well that they will be able to snatch the funds as a bonus

A Necessary Clarification- – TradeSports Cuban Presidency Rules Updated

In order to avoid NK style debacle TradeSports has been adding more contingency scenarios to their rules. As we discussed with the Cheney contracts, resignations and taking office contracts are always about more than just the act in the contract. They also include the chance that the candidate can die or, like in the case of the Cheney contract, take a higher office.

The Cuban Presidency

http://www.intrade.com/news/mainpage.jsp?article=news_62.html states what most traders likely already assumed, “No return to power can be for various reasons such as ill health or death etc.”

Not a bad start, as long as the DOD doesn’t have to confirm…

David Carruthers Arrest - Wall Street Journal Op/Ed

WSJ Editoral Page Going Soft

Nearly three weeks after the arrest of David Carruthers today’s Wall Street Editorial page tepidly expressed their dismay that this was a case of, “extraordinary prosecutorial zeal”.

This case is one that only a statist could love.

Illegal?

The Wire Act is frequently used as a stop-gap measure when existing legislation hasn’t caught up with reality but what Mr. Carruthers did was not illegal in the UK.

But BetOnSports and Mr. Carruthers are not charged with dishonest behavior toward their customers. They are being told that a business they believed was legal was a criminal enterprise even if it was being run in the open. That suggests that prosecutors believe they have the right to enforce compliance with even ambiguous U.S. laws on any business, wherever based, solely because some of the people accessing their site happen to be Americans.

Protectionism

….they'd rather not have the online competition, which is why most of those "good" gambling operations support suppression of online gambling sites like BetOnSports.

The lobbying to restrict gambling is pure protectionism masquerading as protection for the children. The argument that online gambling puts the young at risk is absurd given that nearly any other age restricted product can be purchased online. Is it really necessary to throw foreign CEO’s in jail to protect our casino industry?

Political Games

This Nifong style prosecution has nothing to do with morality and is a pure political move. Carruthers was a target because of his outspoken views on gambling and his arrest was a message to the other gaming CEO’s to keep their mouth shut. Since the Blair the lapdog cares not a whit about what happens to his businessmen it’s a message that won’t take long to sink in.

Follow the latest news on the case here: http://www.freedavidcarruthers.com/

New TS/Market Blog

http://caveatbettor.blogspot.com/

a link from http://www.chrisfmasse.com/ is worth a read. Lots of TradeSports gossip, news etc.

The Lamont Fade - TradeSports CT Primary

With polls for the CT Senate primary opening at 6am, the TS odds have put Lamont as a lock with 80% chance of winning. While it is tempting to just ride the favourite in this race I think that a smarter play will be to fade the favorite here (by buying Lieberman or selling Lamont). What we've seen in past close races where the odds are far outside the polls is a pull toward parity leading up to the election day. This one is going to cut it close since Lamont clearly has the momentum. The Lieberman/Lamont contract is worth buying/selling till Lamont is down to 60-70.

Another trade to look at is the GOP senate control. Its at 83 now and is less subject to temporary whims like this CT Primary. Since Lieberman says he will run as an Independent if he loses the primary, the split vote will be very good for a GOP victory, turning a good chance of maintaining Senate control to a better one. If Lieberman does end up winning the Primary and running as a Democrat its not a state the GOP was expecting anyway. Buy it.

Free David Carruthers

This link is from the very underrated NY Post Business section

http://www.freedavidcarruthers.com/

For most industry followers the arrest of former BetonSports CEO wasn't his bad luck. As an outspoken industry supporter he was a target. The arrest was to shut him up and send a message to anyone else who would support legalising online gambling to keep their mouths shut.

Tony Blair, the lapdog, has done nothing to defend the CEO.

NFP Forecasts

Economists' consensus - 142,000
CME Auction Market participants' consensus - 144,480

Once again the CME auction is on the highside. Last month both numbers were skewed by the ADP report and diverged for the first time. The economists concensus ended up being more accurate, but not by much.

The ADP estimate is more in line this time so they have probably changed the formula after last months disaster.