I wouldn't be too surprised. Peter Ajak [0] (the Belfer Center fellow indicted by the DoJ for attempting the coup) is a fairly slick and well spoken guy.
Westerners seem to underestimate how mercenary and brass knuckled politics in the developing world is (no, politics in insert_OECD_country_here is not to the same degree), and assume every bleeding heart activist will become the next Gandhi. Ironically this is how Orban's political career got started as well as an pro-Democracy campaigner in the 1980s and 1990s.
This isn't to undermine activists and NGOs working in these countries, but the default assumption in due dilligence should be that everyone is a crook and then validate.
That said, I definetly saw plenty of glazing of questionable developing country politicians during my time when I was much more HKS adjacent, but this is common for just about every pmajor policy program - it's the only way you can attract big names, and non-Westerners know how to take advantage of that Western naivete (I've definitely used it on occasion despite being raised in North America).
Sudan exports about one ton of gold per week to the UAE. That's how the conflict is funded.
Even the most modern country (South Africa) is an economic basket case. 42% unemployment. Stealing from the electric utility costs hundreds of millions per year. The most senior elected person in the legislature was charged with corruption and is pending trial.
He's been trying to participate in opposition politics in South Sudan and imprisoned for it, likely because he's a real threat to power. I think it's too much to label him a crook, he's just fighting corruption by actual crooks with tactics others will obviously disagree with. He's definitely a radical activist.
I'm not denying that South Sudan's leadership aren't crooks, but the only way you can climb up in these kinds of environments is to be a crook yourself - reformists do not survive in political environments where violence and criminalization is normalized. And this is part of that naïveté I mentioned earlier.
And if a coup were to happen, would stuff even get any better? Countries run on institutions, and a coup by default undermine institutions by normalizing violence as a short circuit to consensus building. This weak institution building due to the power of the gun is what lead both Argentina and Pakistan to stagnate despite being economic darlings in the early and mid 20th century respectively.
And more critically - we in the US do not want to normalize private citizens fundraising armed movements en masse in the 21st century. This is a bad precedent.
Finally, the Wikipedia article has clearly had some PR panache attached to it based on the edit history, and it's silence about Ajak's case despite having been going on for over a year now.
Pretty wild story. And not going to lie, as someone who did an economics degree myself (never worked as an "economist" though) I have a bit of sympathy. No one listens to economists, then blames them for not being able to fix things (since no one listens to them), it's a cycle that makes you cynical enough to want to simply overthrow everyone else and become a dictator lol...
There’s a pretty narrow band of intelligences in quant: any dumber and you can’t make 400k a year playing games for children, any smarter and you start to be able to make 400k a year curing disease or building a reusable rocket or any number of other actually interesting jobs.
> any smarter and you start to be able to make 400k a year curing disease or building a reusable rocket or any number of other actually interesting jobs.
A co-founder of something like Jane Street must be making a great deal more than $400k/year. Its probably small change for him.
You cannot make that much money doing those "interesting jobs". You might by financing and employing the people doing them.
A smart person going into finance will definitely make a lot more money than that same person going into another field. Going into finance from an "interesting" field has made a lot people rich: https://en.wikipedia.org/wiki/Jim_Simons
Man can we do sway with the notion that competence in one area translates to another?
Being able to identify market arbitrage has little to do with biology and rocket science, and smart people are already working on such problems with the limitations of current fields well known. Throwing "smart” people at solving cancer isn't going to magically solve cancer.
it's not even about intelligence as much as it is about the background of these people. A lot of them are gifted kids coming out of academic households, prep schools and ivy league colleges and quite a few are on the spectrum.
When people were confused why Sam Bankman Fried behaved as stupidly as he did and thought this was all an act, no they genuinely are like overgrown kids who don't know what guile is, they couldn't survive in a rough neighborhood of New York let alone deal with South Sudanese arms dealers.
If we're going to talk about it in terms like these, what does it say about the evolution of this our own field since that was colonized by finance beginning around 2000?
Smart people can be deceived too. Without devolving the conversation into semantics, Garry Kasparov is also someone we would consider to be “smart” by many definitions.
Allegedly. And if you read anything about the case its clearly in a very gray area.
Their actions are what you'd expect any firm to do to hedge their exposure. Its just that they were so large and the Indian stock market is relatively so small that they're hedging moved the market.
So the question is, was their market moving hedging actual market manipulation or was it just the same thing every other quant firm would do in the same situation to hedge out their option exposure?
> Their actions are what you'd expect any firm to do to hedge their exposure
No, their actions were the opposite.
They were pushing the price in the same direction as their derivatives holding. A hedge would push it in the opposite direction. (Eg: If you're long calls, you would hedge by selling the underlying, bringing its price down.)
Your comment doesn't make a whole lot of sense to me. By definition, doesn't hedging the market ALWAYS move the market? The indian market was so small the movement was perceptible, but hedging the US market would also move the market, albeit imperceptibly, right?
Also, the absolutely hilarious fact that Jane Street lawyers were instructed not to say the country's name out loud in court to protect trade secrets, yet they utterly failed to do so on multiple occasions.
This and what the article refers to are just two examples of the kind of thing this company considers to be their "business". For another example, Sam Bankman-Fried and his helper Caroline Ellison came from there. They're always looking for schemes to add billions to their accounts, morality be damned.
There are, at least in theory, methods by which the citizens of the United States control the CIA. (The president and senate nominate and confirm the Director of the Central Intelligence Agency, for instance)
This isn’t perfect but it’s better than randos choosing what to manipulate abroad
Readit News
[1] https://news.ycombinator.com/item?id=44376256
Westerners seem to underestimate how mercenary and brass knuckled politics in the developing world is (no, politics in insert_OECD_country_here is not to the same degree), and assume every bleeding heart activist will become the next Gandhi. Ironically this is how Orban's political career got started as well as an pro-Democracy campaigner in the 1980s and 1990s.
This isn't to undermine activists and NGOs working in these countries, but the default assumption in due dilligence should be that everyone is a crook and then validate.
That said, I definetly saw plenty of glazing of questionable developing country politicians during my time when I was much more HKS adjacent, but this is common for just about every pmajor policy program - it's the only way you can attract big names, and non-Westerners know how to take advantage of that Western naivete (I've definitely used it on occasion despite being raised in North America).
[0] - https://www.belfercenter.org/person/peter-ajak
Even the most modern country (South Africa) is an economic basket case. 42% unemployment. Stealing from the electric utility costs hundreds of millions per year. The most senior elected person in the legislature was charged with corruption and is pending trial.
https://en.m.wikipedia.org/wiki/Peter_Biar_Ajak
And if a coup were to happen, would stuff even get any better? Countries run on institutions, and a coup by default undermine institutions by normalizing violence as a short circuit to consensus building. This weak institution building due to the power of the gun is what lead both Argentina and Pakistan to stagnate despite being economic darlings in the early and mid 20th century respectively.
And more critically - we in the US do not want to normalize private citizens fundraising armed movements en masse in the 21st century. This is a bad precedent.
Finally, the Wikipedia article has clearly had some PR panache attached to it based on the edit history, and it's silence about Ajak's case despite having been going on for over a year now.
This sounds very suspicious.
So Jane Street, a large commodity derivatives trader has no interest in an oil rich South Sudan?
They just wanted to finance the "human rights"
A co-founder of something like Jane Street must be making a great deal more than $400k/year. Its probably small change for him.
You cannot make that much money doing those "interesting jobs". You might by financing and employing the people doing them.
A smart person going into finance will definitely make a lot more money than that same person going into another field. Going into finance from an "interesting" field has made a lot people rich: https://en.wikipedia.org/wiki/Jim_Simons
Being able to identify market arbitrage has little to do with biology and rocket science, and smart people are already working on such problems with the limitations of current fields well known. Throwing "smart” people at solving cancer isn't going to magically solve cancer.
When people were confused why Sam Bankman Fried behaved as stupidly as he did and thought this was all an act, no they genuinely are like overgrown kids who don't know what guile is, they couldn't survive in a rough neighborhood of New York let alone deal with South Sudanese arms dealers.
Deleted Comment
https://www.levels.fyi/companies/spacex/salaries
There is a band, but whats termed intelligence.
But he said and did lots of embarassing things.
I guess that's part of the definition of genius.
EDIT: My bad, I didn't realize he was part of the article, didn't take the time to deal with the paywall.
https://en.wikipedia.org/wiki/Renaissance_Technologies
Their actions are what you'd expect any firm to do to hedge their exposure. Its just that they were so large and the Indian stock market is relatively so small that they're hedging moved the market.
So the question is, was their market moving hedging actual market manipulation or was it just the same thing every other quant firm would do in the same situation to hedge out their option exposure?
https://libgen.li/edition.php?id=151275376
Here's a decent description of the issue.
No, their actions were the opposite.
They were pushing the price in the same direction as their derivatives holding. A hedge would push it in the opposite direction. (Eg: If you're long calls, you would hedge by selling the underlying, bringing its price down.)
Allegedly being investigated is also quite far from "been manipulating markets", I appreciate the clarification.
Sources:
https://www.reuters.com/sustainability/boards-policy-regulat...
https://www.business-standard.com/finance/news/explained-jan...
https://www.outlookbusiness.com/markets/jane-street-under-se...
https://www.rediff.com/business/report/why-is-sebi-probing-a...
https://www.reuters.com/sustainability/boards-policy-regulat...
This isn’t perfect but it’s better than randos choosing what to manipulate abroad
Deleted Comment
Reminds me of:
"In every disaster throughout American history, there always seems to be a man from Harvard in the middle of it."