WSJ: The burgeoning “political intelligence” industry

[Stephanie]

Links in article at site

SNIP:
posted at 4:41 pm on January 18, 2013 by Erika Johnsen

This perfectly encapsulates one of the many prices we are all now collectively paying for an ever-expanding and intrusive federal bureaucracy: That it can now be more worthwhile for businesses to divert serious time, money, and resources into pursuing “political intelligence” at the opportunity cost of dedicating those efforts to providing a better, more efficient, and competitive product for consumers. A pathetic spectacle, to be sure.

Today’s WSJ has a report on the SEC’s investigation of the “political research firm” Marwood Group, and on how, although there’s no evidence out there yet for technical wrongdoing, the investigation is shedding light on what is becoming an increasingly profitable and potentially shady industry:

… But emails subpoenaed in the inquiry, some of them reviewed by The Wall Street Journal, open a rare window into a burgeoning business known as political intelligence, in which firms gather information and analysis about activities in Congress, the White House and federal agencies and sell these insights to investors looking for an edge.

A look at Marwood shows how one leading player in this field—an industry that operates with little regulatory oversight—managed to distribute prescient information about a future government decision that ended up sharply moving a stock. …

The political-intelligence business has expanded rapidly over a decade as government decisions have come to play a growing role for some on Wall Street. Investors spend more than $400 million a year for such intelligence, according to Integrity Research Associates, which follows the research industry. Its founder, Michael Mayhew, said hedge funds tell him the “single largest source of gains for them has been what’s going on in Washington.”

all of it here
WSJ: The burgeoning ?political intelligence? industry « Hot Air

 

[Mad Scientist]

Sounds sorta like the "pump and dump scam" that the FaceBook founders did, and never went to Jail for.

Some unscrupulous Traders like to use Algorithmic Trading as well. What they'll do is submit HUGE buy or sell orders to drive the price of stock the way they want it to got then microseconds later they submit HUGE buy or sell orders depending on how they wanna' profit. They THEN cancel their original orders that drove the stock price.

Stock Traders are always talking about "Price Discovery" meaning the price a stock will trade at in the NORMAL course of the days HONEST trading. But when stock prices are rigged like that it there's no real Price Discovery.

So what's the best way to win at the Stock Market?: Don't play. Even Al Capone knew the Market was rigged and it still is.

 

[jwoodie]

This sounds a lot like the reasons for Japan's non-recovery since the 1990's:

Explaining Japan's Recession