containment thread 2

1. Manipulating financial markets for fun and profit

While emerging market regulators have not identified specific skills sets required of surveillance staff, survey results highlight that the common skills that regulators and exchanges seek in surveillance analysts include data mining and analytical skills and the ability to understand the mechanics of the electronic trading environment, i.e. trade flow and processes and to analyse and evaluate surveillance technology programs and procedures. In addition, maintaining a good contact of networks with the industry in order to draw leads of potential market abuse and facilitate the understanding of market trends and market behaviour is a critical aspect to supplement surveillance efforts.

-Approaches to market surveillance in developing markets by the International Organization of Securities Commissions (IOSCO) who are practically begging for regulatory capture. Wanna fuck a wealthy investor? Become a regulator!

IOSCO explicitly outlines their recommended investigatory methodology in market manipulation from pg. 12 onwards. This allows for stealth adaptations, and since they also describe their recommended approach to prosecution, dodging the po-lice. Thanks for the how-to guide IOSCO. Oh, did I mention a document on specific technological limitations to policing this kind of thing? Anyone want to rob a banking system?

According to the Australian regulation:

The Market Integrity Enforcement team typically had over 85 matters under investigation at any one time during the relevant period

-report

yet only 3 insider trading, 2 market manipulation, 8 infringment and 2 pecuniary penalty actions where taken overall (table 1). Table 3 shows that 122 inquiries where made into suspicious behaviour. That's a lot of false positives. And this is all really basic stuff. Even batman villain Bane could think of something creative like a terror attack against a stock market to capitalise on it (his client shorted first, presumably). Of course, this doesn't work IRL because terrorists attacks even on the exchange tends to have a rather innocuous short-lived effect, with exceptions like 911. However, an attack on a particular company might be very different.

Insider trading surveillance basically hinges on big money trades (and that's big money from the perspective of hedge funds...) that are subsequently investigated. If you're a regular joe and your friend billy works at the listed company in quesiton and leaks some reliable, market sensitive info to you, you basically get some big wins, pre-empting the market, scot free. What suprises me then is that this not-insignificant profit opportunity doesn't have a bottom-up criminal infrastructure. Where are teh darkweb forums for this kind of deals! Where the stories of shady dealings by your friend Pete! In the meantime, I gotta make me some friends in some listed companies....maybe some biotech peeps working in R&D...

Are 'anonymous' smart contracts, known only by the parties involved plausible? Should they be functional, I envision that insider trading will being unregulatable if conducting via darknet anonymous smartcontracts. Someone could set up a tor site that connects scientists with financiers who then formulate an anonymous smartcontract that binds that scientists to lose $100,000 if the value of a stock is lower after new years day, since the scientist has told the financer (before it has become public knowledge) that the company will announce that they have been granted FDA approval for a drug, or something like that on Christmas. However, if the stock price rises by a threshold amount, they are to receive $1million from the financier. Meanwhile, the financier will invest $2M in the stock and expect an appreciation greater than the amount he will reward the scientist with for his trust. Too easy.

2. Tobacco control undervalued as an opportunity to give?: Only for heretical strands of EA

Tobacco control is undervalued if:

• you are a total utilitarian, rather than favouring the personal-affecting view, since the mortality is humongous for smoking

• you don't factor in 'justice' considerations, where you believe 'choice' to start smoking in spite of public health recommendations should be punished with less altruism than otherwise

• you don't believe GiveWell donors will pay proportional multiplayer game theoretic attention to Development Media International, a standout charity that doesn't make the top 4 cut and promotes avoidance of smoking among other things

• you give extra value to local problems (e.g. for tractability or sustainability reasons), since smoking is a big issue in the developed world too (unlike deworming)

3. Amateur intelligence analysis

Is there a credible risk that terror attacks on underground storm water drains could bring down buildings, or otherwise causing mass casualties (such as by some consequence to critical drainage infrastructure)? Cross posted at: /r/credibledefence

4. The relative value of contributing to LW vs Wikipedia

Would the time you spent posting here in LessWrong have been better spent posting on Wikipedia?