Betting Policy Consequences

Michael Stastny quoting a closed Financial Times column:

President John F. Kennedy helped to revive the City of London in 1963 by imposing a tax on US investment in foreign securities. That made the international bond market move to London, allowing the City to regain its 19th century status as Wall Street’s rival in capital markets.

I did not know this bit of history. It seems like a perfect illustration of some obvious but often ignored truth, perhaps simply that policies have consequences. Consideration of more than policy advocates’ lies may be in order. Betting market prices may be one valuable source of more information.

A small irony then, that U.S. regulation is ensuring that the leading betting markets are located outside the U.S., largely in London. Eventually this may be a big deal:

It does not sound like a very worrying loss for Wall Street given its strong position in equities, bonds and derivatives. But Mr Bloomberg should watch out: in an arena of financial innovation that is rapidly converging with other forms of trading and investment, New York is drifting behind London.

As an anti-nationalist, I don’t care much where the leading markets locate; I just hate to see stupid policy implemented anywhere, including the U.S. If I were betting on the consequences of this policy I’d short New York.

Financial markets too gauche? Think through the likely consequences of heavy handed cloning regulation.

5 Responses

  1. Hello San Francisco,

    Excellent post.

    It would make sense if US Social Security contracts were traded on an US-based exchange —as opposed to Ireland.

    Besides Great Britain and Ireland, Antigua is the third gambling and betting spot.

    WTO’s recent ruling in favor of Antiga could lead to either tighter or more relax legislation in the USA. Wanna bet?

    Best regards,

    Chris. F. Masse

  2. I don’t see any advantage in having social security contracts traded on a US-based exchange, so long as exchanges outside the US offering such contracts take dollars.

    Ok, funny money anyway:

  3. […] It happens that this use is a good fit for my anti-nationalist agenda. A country or nation is easily anthromorphized as the fatherland or motherland, personified in the form of a ‘great’ leader, thought worthy of cultish loyalty and sacrifice, blessed by a diety, and nearly always constitutes a geographic monopoly. […]

  4. […] I’d strike “well-meaning” from the above, but another beautiful example nonetheless. […]

  5. […] Betting Policy Consequences. Eventually could be longer than 8 years, but after that time betting markets are still of zero importance. That they have remained so in spite of probably being legally feasible in much of the world is particularly damning. […]

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