Some events or developments that are ignored as “under the radar” can have an outsize influence on one’s investment results. The following two “minor” stories showed up with no fanfare in the news feed overnight:
- Citigroup trader’s error causes 8% drop in Swedish stock index
COPENHAGEN, May 2 (Reuters) - The sudden fall in European shares driven by a brief crash in Nordic markets was caused by a single sell order trade by Citigroup Inc… involved an erroneous calculation relating to a Nasdaq Inc index involving Swedish companies…
The Stockholm OMX 30 equity benchmark index was one of the hardest hit, falling by 8% at one point following a five-minute dive, before paring most of its losses to trade down 1.7% at 1229 GMT.
Each time a “fat finger” or “order entry mistake” causes massive swings in markets worth billions of dollars (or kroner), I am deeply suspicious that someone on one side or the other of an affected trade may have been involved in intentional malfeasance, seeking to make an intentional action seem like an “innocent boo-boo.” I am doubly suspicious when the stock exchange treats the market gyration as “harmless,” so that none of the affected trades need to be unwound.
- Sandbox AQ Gets Backing From CIA’s Venture Capital Arm
The Central Intelligence Agency’s venture capital firm has invested in Sandbox AQ, a Google software spinoff… focused on harnessing artificial intelligence and quantum science.
The CIA’s In-Q-Tel was joined by Paladin Capital Group, which backs innovative tech companies, in Sandbox AQ’s first round of fundraising. The round – which was oversubscribed – has garnered “well into the nine figures,” Sandbox AQ Chief Executive Officer Jack Hidary said in an interview.
“We want them to be able to sell into the U.S. government,” Bowsher said in an interview. He added the venture firm had spent the past few weeks introducing Sandbox AQ’s work to some of the eight U.S. intelligence agencies that it works with, which include the National Security Agency, Federal Bureau of Investigation and CIA…
Who even knew that the CIA (our foreign intelligence gathering agency) had its own “venture capital firm?”
Does this not sound sort of like a “vulcan mind meld” of government and big business? It creeps me out and reminds me that I cannot trust our government and/or Google not to conspire together to either control my behavior, read my thoughts, or “disappear me” the way that the Chinese government does its own citizens who disagree with government policy.
When government and businesses work hand-in-glove, such corporatocracy is surely NOT what our US Constitution’s framers had in mind. This seems more than just a typical “military-industrial complex” arms-length negotiated transaction based on K Street lobbyists greasing politicians’ hands.
The United States government is painstakingly serious about the “separation of church and state,” so that no god, man, or creed can control the body politic or establish an official state religion.
However, a transaction like the CIA In-Q-Tel direct investment in a private company is the type of investment that was a bad idea, according to the late Nobel prize-winning economist Gary Becker and esteemed jurist Richard Posner of the 7th Circuit Court of Appeals (retired).
Government Equity in Private Companies: A Bad Idea
Experience shows that political rather than economic criteria tend to dominate in the pressures exerted by government shareholders on corporate decisions.