Jeff Ma, ProTrade: "I had inside information — and in sports, there's no SEC."
Ma is excited because ProTrade is about to launch the ability to short stocks on its stock market of professional athletes.
As an aside, for those who don't know what shorting is, here is a quick definition:
A short sale is a three-step trading strategy that seeks to capitalize on an anticipated decline in the price of a security. First, arrangements are made to borrow shares of the security, typically from a broker. Next, the investor will sell the shares immediately in the open market with the intention of buying them back at some point in the future. Finally, to complete the cycle, at a later date he/she will repurchase the shares (hopefully at a lower price) and will return them to the lender. In the end, the investor will pocket the difference if the share price falls, but will of course incur a loss if it rises.
Ma recounts a time that he was out drinking and ran into then-Texas Rangers relief pitcher Esteban Loaiza, who was in town for a game with Ma's favourite team, the Boston Red Sox. He proceeded to buy Loaiza a few drinks, which turned into a few more, and then a few more, until Loaiza was totally shitfaced. Puking his way out of the bar, there was no way Loaiza would pitch well the next day, if at all.
If only there was a way for Ma to capitalize on this insider information …
With ProTrade's new short-selling feature, now there will be. All Ma would have to do today to capitalize on Loaiza's presumed inability to produce would be to sell shares in Loaiza's stock short. When the stock dropped after Loaiza's poor or non-performance, Ma would earn a profit and be rewarded for his intelligence.
In THX 1138, George Lucas visions a society in which citizens may electronically report to a central authority violations of its strict cultural codes — codes generally designed to ensure continued production and consumption from its members. But it appears that Lucas was slightly off: if we have inside information that production/consumption is at risk we need not file a report to a central authority, but rather take that information to the central intelligence of the market — the inverse of a central authority — and sell that person's stock short.
Hardt and Negri: "Perhaps, just as Foucault recognized the panopticon as the diagram of modern power, the world market might serve adequately — even though it is not an architecture but really an anti-architecture — as the diagram of imperial power" (Empire, p.190).