Tag Archives: CFTC

What to think of HedgeStreets comment to the CFTC

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It&#8217-s a very important take.

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

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Basically, they are saying:

  1. We saw that the CFTC is entertaining the &#8220-exemption&#8221- way for prediction markets on politics and on other news.
  2. You have lost your sanity, folks. The &#8220-exemption&#8221- solution will bring you plenty of problems.
  3. You should approve these prediction markets under the classic, regulated way (the DCM solution). The classic regulation is the right way to deal with the potential problems you mentioned in your &#8220-concept release&#8221-.

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That&#8217-s a pretty strong argument.

(Just remember the conundrum that Jason Ruspini has exposed.) (PDF file)

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Now, the counter argument is to say that the DCM way slows innovation &#8212-thus the need to &#8220-exempt&#8221-.

That&#8217-s a pretty strong argument, too.

Indeed, one can point that it&#8217-s IEM, InTrade and BetFair who have grown the field of prediction markets &#8212-not HedgeStreet.

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DEVELOPING&#8230- :-D

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UPDATE: Jason Ruspini seems to be in agreement with HedgeStreet. I like that. See his comment, just below.

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UPDATE: Jason Ruspini gives his understanding of the HedgeStreet&#8217-s comment to the CFTC.

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UPDATE: A second look at HedgeStreet&#8217-s comment to the CFTC about &#8220-event markets&#8221-

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The freshest comments sent to the CFTC

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– Jed Christiansen&#8217-s comment to the CFTC – (PDF file)

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

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Previous blog posts by Chris F. Masse:

  • The last comments are up on the CFTC website, finally.
  • InTrade CEO John Delaney sends a good comment to the CFTC.
  • Robin Hanson’s purity test is based on an absurd principle.
  • NewsFutures is the most usable prediction exchange I know of.
  • HubDub question
  • Implied Prices for Presidential Decision-Aid Markets
  • What I said to BusinessWeek

My question to Jason Ruspini

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Jason, thanks for your hard work on this issue. Your 7-page letter to the CFTC is a master document. &#8212- (PDF file)

What makes you think that your proposals will create more freedom for our prediction exchanges than the CFTC&#8217-s proposals?

Could you point to specific instances to us where you think that your input is more libertarian than the CFTC way? After all, your proposals contain many &#8220-don&#8217-t do that, and forbid that&#8221- things. :-D

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The CFTC is going to close the comments in 5 days. We have 5 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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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).

– COMMENTS TO THE CFTC: What to expect from Tom W. Bell and Jason Ruspini

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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 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

– This week, 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)

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

– Jason Ruspini&#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)

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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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The freshest comments to the CFTC

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

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

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Will those 2 exchanges be affected by the upcoming CFTC ruling?

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– YooNew

– FirstDibz

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Previous blog posts by Chris F. Masse:

  • The FaceBook profiles of the 2 most important men of the field of prediction markets
  • THE HUMAN GADFLY WHOSE OBJECTIONS ROBIN HANSON IS DUCKING…???…
  • Google now considers Midas Oracle as a major blog.
  • Horizon 2015: A long-term strategic perspective for the real-money prediction markets
  • Join our group at LinkedIn to have your “Prediction Markets” badge on your profile. It’s ‘chic’. (“Groups” info should be set as “visible”, in your profile options.) We are 63 this early Saturday morning —keeps growing.
  • If you have been using PayPal to fund your InTrade, TradeSports or BetFair account, please, check that horror story.
  • 48 hours after the launch of the “Prediction Markets” group at LinkedIn, we have already 52 members —both prediction market luminaries and simple people (trading the event derivatives or collecting the market-generated probabilities).

COMMENTS TO THE CFTC: What should be expected, next.

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Two prediction market organizations will submit, each, a comment. I suppose that what they will tell the CFTC will say more about their industrial strategy than about the right state of the US regulations on event derivative markets, but I could be damn wrong.

Tom W. Bell is working on a comment to the CFTC (that&#8217-s public information). Once it is published, the next thing to do is a comparative analysis of Bell versus Ruspini. With that question in mind: Which of these 2 luminaries will have the best impact on the CFTC?

I can&#8217-t wait.

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The Chicago Mercantile Exchange is not a friend of the prediction markets. Nor is the ISDA.

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Will the Chicago Mercantile Exchange write to the CFTC?

&#8230- asks Google&#8217-s Bo Cowgill.

That could be&#8230- However, I&#8217-m not holding my breath. Here&#8217-s why. The CME (along side the CBOE and ISDA) represents forces that does not push for the kind of financial innovations we are pushing here, on Midas Oracle. We are pulling for Web-based, de-intermediated, low-cost, event derivative exchanges. The financial dinosaurs (like the CME) do not.

Take a look at the CME&#8217-s 2003 letter to the CFTC about HedgeStreet&#8217-s application as a DCM. – (PDF file) – Here are the titles of the first 2 sections:

  1. HedgeStreet’s Proposal is Materially Deficient.
  2. The [HedgeStreet] Application Violates the CEA.

No need to go further. :-D &#8230- You have computed that the CME was (in 2003) no friend of HedgeStreet &#8212-and, thus, of our prediction markets. (For those who are just surfacing from an Afghan cave, yes, the CFTC did approve HedgeStreet&#8217-s application, finally, and told the CME to go fugging themselves.) So, I&#8217-m not holding my breath for a CME comment to the CFTC&#8217-s concept release on &#8220-event markets&#8221-. Saying that the CME is talking for the prediction market community is like saying the Ayatollah Khamenei was talking for priests, ministers, and rabbis.

As for the ISDA, they represent big institutional traders&#8230- who do not use exchanges ( !! ). What they say to the CFTC (PDF file), basically, is to be careful not to hurt the framework of the whole landscape. Well, thanks ISDA, but the CFTC knew that already.

As I said, 2 prediction market organizations will, each, submit their comment to the CFTC. I don&#8217-t expect that to be a deep read, with regards to derivative regulations. However, their industrial strategy might transpire, and that might be interesting for curious people like me. :-D

The 3 interesting takes about the &#8220-event markets&#8221- are from:

  1. the CFTC &#8212-if you are able to sense what their true opinion is.
  2. Jason Ruspini &#8212-(PDF file).
  3. Tom W. Bell &#8212-upcoming.

The future of US-based, non-sports, non-hedgeable prediction markets depends on those 3 poles of thought.

In the coming weeks, you&#8217-ll see many intellectual interactions between them.

The real question is: Will Jason Ruspini and/or Tom W. Bell have a proven impact on the CFTC process? I wish that, but both of them do stray away from the CFTC&#8217-s strict framework.

DEVELOPING&#8230-

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The CFTC is going to close the comments in 6 days. We have 6 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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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).

– COMMENTS TO THE CFTC: What to expect from Tom W. Bell and Jason Ruspini

–

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 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)

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

– This week, 4 prediction market organizations and VIPs will submit their comment to the CFTC.

– Michael Giberson&#8217-s economic take.

– Chris Hibbert&#8217-s libertarian take.

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

– Jed Christiansen&#8217-s pragmatic take. &#8212- Final draft – (PDF file)

– A young economist rebuts the American Enterprise Institute. &#8212- (MO mirror)

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

–

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

–

The CFTC is going to close the comments in 7 days. We have 7 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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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).

– COMMENTS TO THE CFTC: What to expect from Tom W. Bell and Jason Ruspini

–

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 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)

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

– This week, 4 prediction market organizations and VIPs will submit their comment to the CFTC.

– Michael Giberson&#8217-s economic take.

– Chris Hibbert&#8217-s libertarian take.

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

– Jed Christiansen&#8217-s pragmatic take.

– A young economist rebuts the American Enterprise Institute. &#8212- (MO mirror)

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

–

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

–