Winter cancelled/uncancelled banter 25/26

[donsutherland1]

The Washington Post has a feature story concerning prediction markets. Far from this form of betting providing insight into the future, the Post's article suggests manipulation through massive numbers of automated transactions of 1 million or more transactions (roughly one every 3 seconds). If so, the prediction value is limited, as perceptions are created to back a given narrative disconnected from actual probabilities (an issue that is much less present in large, deep markets where handfuls of accounts lack the capacity to manipulate prices in most cases). As transactions in any buying-selling decision influence prices, these automated trades almost certainly have a price impact and, in the process, give their users a qualitative advantage by creating a skewed perception about the future.

Not mentioned, but also a consideration, is the possession and use of inside information. Examples where such information might have been involved range from large trades shortly before President made tariff-related announcements e.g., postponing their implementation, and the recent military operation to remove President Maduro from Venezuela (one special forces soldier involved in the operation had placed large bets). 

One image from the piece:

The full story can be found here: https://wapo.st/49o6Jxc