How much are the NSA and CIA front running markets?

[antigop]

http://www.nakedcapitalism.com/2013/06/how-much-are-the-nsa-and-cia-front-running-markets.html

A 2008 paper by Arindrajit Dube, Ethan Kaplan, and Suresh Naidu (hat tip MS) evidence that the CIA and/or members of the Executive branch either disclosed or acted on information about top-secret authorizations of coups. Stocks in “highly exposed” firms rose more in the pre-coup authorization phase than they did when the coup was actually launched.
,,,
Their conclusions:

Covert operations organized and abetted by foreign governments have played a sub- stantial role in the political and economic development of poorer countries around the world. We look at CIA-backed coups against governments which had nationalized a considerable amount of foreign investment. Using an event-study methodology, we find that private information regarding coup authorizations and planning by the U.S. government increased the stock prices of expropriated multinationals that stood to benefit from the regime change. The presence of these abnormal returns suggests that there were leaks from the CIA or others in the executive branch of government to asset traders or that government officials with access to this information themselves traded upon it. Consistent with theories of asset price determination under private information, this information took some time to be fully reflected in the stock price. Moreover, the evidence we find suggests that coup authorization information was only present in large, politically connected companies which were also highly exposed.

We find that coup authorizations, on net, contributed more to stock price rises of highly exposed and well connected companies than the coup events themselves. These price changes reflect sizeable shifts in beliefs about the probability of coup occurrence.

Our results are robust across countries, except Cuba, as well as to a variety of controls for alternate sources of information, including public events and newspaper articles. The anomalous results for Cuba are consistent with the information leaks and inad- equate organization that surrounded that particular coup attempt.

[maxcopper]

1. How much are the NSA and CIA front running markets

Good job done !

[bemildred]

2. As much as they like. nt

[Demeter]

3. Well, that's just lovely

and I doubt the money goes into the Corporation's account, either. These are individuals engaging in the worst form of insider trading...disrupt a nation, and skim off the cream.

Not at all like Reagan's amateurish Iran/Contra syndicate.

Is there anything uncorrupted in this country, any more?

[leveymg]

4. This has been going on as long as there have been markets, particularly for public debt and bonds.

Here's an article on the use of dirty-tricks and false flag terrorist operations by the Czar's secret police during the period from the Prusso-Russian War until the outbreak of World War One. The Okhrana pioneered the manipulating of values for state bonds on the Paris Bourse: http://www.dailykos.com/story/2006/11/15/271437/-The-History-of-Political-Dirty-Tricks-Pt-1-The-Okhrana-and-the-Paris-Bourse

[DemReadingDU]

7. Lots of good history, thanks!

[Mika]

5. Nothing new, according to Major General Smedley D. Butler

“I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.”

― Smedley D. Butler, War is a Racket: The Antiwar Classic by America's Most Decorated Soldier

[snot]

6. K&R'd!

[Mojorabbit]

8. Amazing! nt