Did the MBS corner the market on trade?

Relax wrote:At some point the KISS principle is being broken here... and $$$ increase. Ah, economics... such a thrilling tale, everyone wishes to read. Enough of this boring space opera/battles, daring do! I say Enough! What the reader REALLY wants is a treatise on make believe economics...

tlb wrote:

Brigade XO wrote:A good percentage of the Financial Marketplaces have representitives ON Manticore but the actual exchanges are located in lots of places. So are the various headquaters of these financial companies. Like Bank of New Madrid.....which would seem to be located on New Madrid.

Lots of BANKS and Stock Brokerages will have branches on Manticore.

You are talking about an interstellar banking and financial system that has grown up over centuries. They have adjusted to the time lags. Information flows no faster than ships in hyperspace. You could have a DB transmit information- encrypted etc- when it enters a system to initiate buying various stocks but that leaves lots of traces. Sending electronic mail would work better and be tougher to track if you were trying to steal time on making trades base on what you found out on X plante and you had an account or "assocate" on R planet.

Manticore is a financlal hub and tradeing nexus by virtue of the Junction. It's merchant marine etc seem to work harder, smarter and more efficiently. It has a Navy which is focused (and grew) on Commerce and it's protection. It's banking and financing laws encourage investment and apparently deliver on safety. Legal system that works and it's tied to a kleptocracy. Mantcore worked at creating this enviornment. Cornering isn't the right word- unless you are really envious and don't want to work or do it legaly.

What is your basis for calling Manticore a kleptocracy, if I understand you correctly?

Sorry, dropped a word......should have been [b] Llegal system that works and it's NOT tied to a kleptocracy.

cthia wrote:Cornering the market on trade is one thing.

Cornering the market on the Stock Exchange and/or commodities market is quite another. I don't see how other systems can compete with the MBS. Buying and selling stocks and commodities is based on news flow. If you have faster, reliable access to the news, you can break the bank and everyone else along with it. Manticore can be bullish on the market.

The Dukes attempted to corner the market on frozen concentrated orange juice (FCOJ). They thought they had the crop report looong before the masses. Seconds could mean billions—who knows with the insane lead time the MWJ gives Manticore.

It would seem that the MBS has a never ending stream of insider information. I'm certain the author knows how all of these money matters remain fair in the Honorverse, and how the financial markets can still successfully operate. I just don't have access to that blueprint. The only thing I can see is that the MBS is built on the Honor system. Pun intended.

****** *

Explaining the climax scene of "Trading Places"

The End of "Trading Places," Explained
BY TAYLOR TEPPER MARCH 30, 2016
Dumb Money: "Trading Places" Explained
MONEY writer Taylor Tepper discusses the events that lead to the final scene of the film Trading Places.

How did Dan Aykroyd and Eddie Murphy win at the end of Trading Places?

Investors make money when they buy low and sell high. In Trading Places, Eddie Murphy and Dan Aykroyd sell high and then buy low. Either way, they make a lot of money.

So what happened?

It starts with some insider information. Aykroyd and Murphy steal a report that will cause the price of orange juice to fall, and replace it with a report that says OJ prices will rise. They do this because they know their enemies, the Duke brothers, will trade on the phony report.

Moving to the big scene, the Duke brothers, through their trader, starts buying OJ futures. Then everyone buys. The value skyrockets.

Once the price gets to a high point, and the whole market thinks the price will only go up, Aykroyd calls out a promise to sell OJ at that high price in the future. Essentially he is making a bet that the price will fall. (He knows it will because he’s read the report.)

Basically, he buys a lot of orange juice for very cheap, and sell it for a lot of money. The Dukes didn’t.

P.S.: Don’t try this at home. Lots of stuff in Trading Places, including insider trading, is illegal. Trading commodity futures is also a terrific way for individual investors to end up as broke as the Dukes at the end of the movie.

Included as reference.

Theemile wrote:A good % of the galaxy's large Financial Markets are on Manticore in Landing for this very reason. Since it is the center of information it makes sense for the markets to be colocated. So Manticore has no advantage over anyone else - they have trading reps on Manticore as well.

Not only are the large Financial Markets colocated on Manticore, they are also colocated at the MWJ, per HoS. Why is that? Why would banks which surely have branches located ON Manticore, also have branches situated at the junction? I would imagine to help alleviate the same concerns I list.

But, many other questions and concerns arise, being familiar with the trading of stocks and commodities. I would imagine the entire Galaxy's equivalent of the NYSE is located on Manticore. Let's say in Landing. Let's also say the Galaxy's stock market and commodities reports are disseminated strictly in Landing. So far so good. Now what?

Well, let's stick with frozen concentrated orange juice for sake of discussion and convenience, albeit, it could just as easily be any raw commodity. Let's also consider the Galaxy's Agriculture experts for FCOJ are located on Planet X in System X, because that is the Galaxy's largest producer of the best damn FCOJ found on the market. Which makes sense because only the Galaxy's largest producer of FCOJ would know the state of this season's crop. This information has to make its way to everywhere else in the galaxy. Therein lies the first opportunity for criminal activity. The data for FCOJ originates from PLX. Does PLX have to wait for the Ag report to travel all the way to Manticore to be disseminated simultaneously to everyone at once to remain fair, then make it's way back to the planet of origin? That wouldn't be fair to the planet of origin, or realistic. Planet X needs to know the state of it's crop ASAP so that it can make any necessary adjustments. However, if that crop report IS released on Planet X, then a Manticoran representative on Planet X can immediately sprint that news to the SK, well ahead of the official courier. Ahead because the SKs ships are faster. Well, their warships are faster, I'm not sure if that speed advantage translates down to it's Dispatch Boats as well. Albeit, I'm also not sure whether the SK doesn't have unscrupulous people who would capitalize on such an opportunity. The Hauptman Cartel for one. Especially since it builds ships.


Couriers are waiting at the junction to sprint the latest numbers to banks across the Galaxy. Are the figures FTL'd to the waiting Couriers/DB's from Landing "across the board?" Or just the SK's Couriers? The equivalent of Rutgers, Bloomberg and others are not regulated to disperse the official quotes in real time to any players AFTER the reports are officially disseminated at the Stock Exchange.

So, THERE is another opportunity for the SK and/or unscrupulous players. The DB's awaiting at the junction has to await for the news to reach them at the junction. Presently, Manticore has FTL that can sprint the results of the Exchange to it's DB. And then they're off, the race is on and the fix is in. Potentially.

Remember, time is money when it comes to playing in this pond.

Brigade XO wrote:A good percentage of the Financial Marketplaces have representitives ON Manticore but the actual exchanges are located in lots of places. So are the various headquaters of these financial companies. Like Bank of New Madrid.....which would seem to be located on New Madrid.

Lots of BANKS and Stock Brokerages will have branches on Manticore.

You are talking about an interstellar banking and financial system that has grown up over centuries. They have adjusted to the time lags. Information flows no faster than ships in hyperspace. You could have a DB transmit information- encrypted etc- when it enters a system to initiate buying various stocks but that leaves lots of traces. Sending electronic mail would work better and be tougher to track if you were trying to steal time on making trades base on what you found out on X plante and you had an account or "assocate" on R planet.

Manticore is a financlal hub and tradeing nexus by virtue of the Junction. It's merchant marine etc seem to work harder, smarter and more efficiently. It has a Navy which is focused (and grew) on Commerce and it's protection. It's banking and financing laws encourage investment and apparently deliver on safety. Legal system that works and it's tied to a kleptocracy. Mantcore worked at creating this enviornment. Cornering isn't the right word- unless you are really envious and don't want to work or do it legaly.

How did it work during war? With the screws tightened down even further? This discussion should go a long way answering the question why DBs are still allowed in-system even during war.

As usual, your post shows lots of insight Brigade. I seem to have less time now because of this pandemic and the series of storms aimed at the East Coast. This topic needs lots of firing neurons to do it justice. My apologies.

More to follow as time permits.

cthia wrote:

Theemile wrote:A good % of the galaxy's large Financial Markets are on Manticore in Landing for this very reason. Since it is the center of information it makes sense for the markets to be colocated. So Manticore has no advantage over anyone else - they have trading reps on Manticore as well.

Not only are the large Financial Markets colocated on Manticore, they are also colocated at the MWJ, per HoS. Why is that? Why would banks which surely have branches located ON Manticore, also have branches situated at the junction? I would imagine to help alleviate the same concerns I list.

But, many other questions and concerns arise, being familiar with the trading of stocks and commodities. I would imagine the entire Galaxy's equivalent of the NYSE is located on Manticore. Let's say in Landing. Let's also say the Galaxy's stock market and commodities reports are disseminated strictly in Landing. So far so good. Now what?

Even in today's world with near instant communications not all companies choose to trade on the NYSE and there are certainly other large exchanges, for example in Japan, London, and Shanghai.

Most stocks probable get listed and do the majority of their trading on their home planet's exchange(s). There's probably some secondary trading at Manticore and elsewhere but it's likely to end up out of sync across the galaxy even with the speed information can travel through wormholes.

I suspect it'll be a lot more like the way stock exchanges worked back when the fastest way to get news between the US and Europe was a week+ ship ride. They just end up much more distributed and much less tied together.

As for your later example of frozen concentrated orange juice it wouldn't just be primarily from one state within the US that dominates the market. There would be dozens and dozen of overlapping markets as different planets end up producing exportable excess of FCOJ. But even as cheap as interstellar shipping is in the Honorverse a load of FCOJ from your own planet has to be cheaper than one from the next system over, which in turn is cheaper than one shipped hundreds or thousands of lightyears. So I simply can't see a unified global market in FCOJ.

Still Manticore is a great place for a financial clearing house, even if it's not necessarily the best place to trade every stock in the universe, because than's to its wormhole network its got the quickest transit times between most average points in the inhabited galaxy. So it's a good place for banks to meet up to, for example, settle up currency exchanges if they end up with a surplus (or shortage) of a given other banks local currency. And yes, if you're interested in stocks from all over the known galaxy then it's the place where the average information lag is lowest. But if you're really interested in stocks from a givne world you'd still be much better off giving investing instructions to a local agent at that world who will have access to the local information affecting local trading of that stock without the weeks long delay for it to get to Manticore.

(Though like back before underseas telegraph cables got laid on Earth you've got the chance, if the local market swing is large enough, to try to beat news of that to a foreign exchange so you can buy up, or sell off, the stock before everyone else learns of whatever news triggered the major price movement. (Of course it's got to be a pretty big swing to be worth the time and expense of attempting that maneuver; and even if you are the first to arrive the pricing on that other exchange may have been way out of whack from what you expected because of some local knowledge or believe there that you weren't aware of. So the gamble might not pay off)

Jonathan_S wrote:Even in today's world with near instant communications not all companies choose to trade on the NYSE and there are certainly other large exchanges, for example in Japan, London, and Shanghai.

Can you imagine the amount of money that is now being poured in to FTL communicatitons, since the cat is out of the bag that it is possible? In our world, the amount of money riding on Elon Musk's Starlink which may reduce the communication lag between London and New York by 10 or 20 milliseconds is staggering.

The most obvious thing being done is a civilian version of the Hermes system. Seed some in the system's hyperlimit and a control station on the habitable planet(s). Then any information, financial or not, can get out to a ready-to-depart D.B. in seconds. Similarly, a D.B. does not need to come into port for almost any reason except resupply or maintenance, even an
interplanetary-space port.

What I imagine exists are fast couriers for information only. They appear in a system, as close as they can to an interplanetary installation. For the 20 minutes of round-trip to the planet, they dock and take on some consumables, then immediately head out (a "splash-n-go" if you will). With the advent of FTL, such an installation is unnecessary. The D.B. simply transmits to the closest buoy and while the hypergenerators cycle, there's plenty of time for several round-trip exchanges with the planet. Then the D.B. is off to the races again.

But what's the next step? With the amount of money in the galactic financial and commodities market, there must be people thinking of how to transmit on the beta wall by having relays in alpha. And if that can be done on the beta, why not on the iota? Manticore's hyper-detection network can see a vibration in the alpha wall caused by a transition light-months out. Extrapolate that to ultra-sensitive detectors operating on the iota wall (or the lambda once the streak drive is cracked) and you could have an interstellar communication network.

And, of course, wormhole transits by automated drones.

We're not likely going to see this in print until the story is over and fanfic is authorised.

ThinksMarkedly wrote:The most obvious thing being done is a civilian version of the Hermes system. Seed some in the system's hyperlimit and a control station on the habitable planet(s). Then any information, financial or not, can get out to a ready-to-depart D.B. in seconds. Similarly, a D.B. does not need to come into port for almost any reason except resupply or maintenance, even an
interplanetary-space port.

What I imagine exists are fast couriers for information only. They appear in a system, as close as they can to an interplanetary installation. For the 20 minutes of round-trip to the planet, they dock and take on some consumables, then immediately head out (a "splash-n-go" if you will). With the advent of FTL, such an installation is unnecessary. The D.B. simply transmits to the closest buoy and while the hypergenerators cycle, there's plenty of time for several round-trip exchanges with the planet. Then the D.B. is off to the races again.

But what's the next step? With the amount of money in the galactic financial and commodities market, there must be people thinking of how to transmit on the beta wall by having relays in alpha. And if that can be done on the beta, why not on the iota? Manticore's hyper-detection network can see a vibration in the alpha wall caused by a transition light-months out. Extrapolate that to ultra-sensitive detectors operating on the iota wall (or the lambda once the streak drive is cracked) and you could have an interstellar communication network.

And, of course, wormhole transits by automated drones.

We're not likely going to see this in print until the story is over and fanfic is authorised.

Unless there is a constant flow of couriers, which I consider unlikely, the biggest lag time in the system is waiting for the next courier; not really in waiting for the data to be transferred to the DB.

Can FTL communication occur within a hyper band? It seems probable, but it is not clear what range would be available. However one problem is that the communication is within the band, you would still need to physically carry the resultant data down into normal space.

I can see an interest in autonomous couriers, mainly in the savings by elimination of life support (it could be supplied externally when technicians are working on the systems). However it does not bother me if it is not available. I do not like some stories by others in the anthologies that are authorized by RFC, so why would I think fanfic will even reach that level?

ThinksMarkedly wrote:

Jonathan_S wrote:Even in today's world with near instant communications not all companies choose to trade on the NYSE and there are certainly other large exchanges, for example in Japan, London, and Shanghai.

Can you imagine the amount of money that is now being poured in to FTL communicatitons, since the cat is out of the bag that it is possible? In our world, the amount of money riding on Elon Musk's Starlink which may reduce the communication lag between London and New York by 10 or 20 milliseconds is staggering.

Huh. I knew speed of light in fiber is slower. Enough slower that some high speed traders paid to run microwave relay links because that gives that fraction of a second advantage over people trading off the normal fiber links. But I hadn't realized that Star Link is low enough that it can shave off significant time over the undersea cables. (But now that you mentioned it a back of the spreadsheet calculation shows it might save around an entire 1/100th of a second on a signal from London to NYC)

The most obvious thing being done is a civilian version of the Hermes system. Seed some in the system's hyperlimit and a control station on the habitable planet(s). Then any information, financial or not, can get out to a ready-to-depart D.B. in seconds. Similarly, a D.B. does not need to come into port for almost any reason except resupply or maintenance, even an
interplanetary-space port.

What I imagine exists are fast couriers for information only. They appear in a system, as close as they can to an interplanetary installation. For the 20 minutes of round-trip to the planet, they dock and take on some consumables, then immediately head out (a "splash-n-go" if you will). With the advent of FTL, such an installation is unnecessary. The D.B. simply transmits to the closest buoy and while the hypergenerators cycle, there's plenty of time for several round-trip exchanges with the planet. Then the D.B. is off to the races again.

To be fair there's no reason you couldn't have been doing this buoy trick with radio or laser links from planet to hyperlimit buoy. You never needed the a DB to actually come in and dock except when it actually needed fuel. Admittedly most times they didn't because the delay before the next DB came through was so long it made sense to "waste" the time swinging by the station to give people on-planet a chance to read and respond to any urgent messages the DB just brought.

A civilian Hermes buoy would speed things up, a little. Manticore orbit averages about 10.5 lightminutes inside the hyper limit (11.5 vs 22 lm from the star). So Hermes would get the signal to a buoy there about 10m, 20s sooner than a radio would. But that's still a minuscule fraction of an interstellar flight that's usually measured in weeks. A crew willing to run slightly more risks would be able to make up an 11 minute gap. (OTOH the next DB headed in most any direction probably isn't for a week or more - so saving minutes is irrelevant. The windfall would have to be both massive and nearly certain before it'd make sense to send a DB with breaking stock news to another system to try to cash in on it.

About the only places really low latency communications make sense (and even there we're talking about low latency as within less than an hour or so) is Basilisk, Beowulf, Gregor, Manticore, Saint Martin. (Not even Lynx since that planet is actually a few LY away from the uninhabited system the terminus is actually in) Those have enough traffic through the wormhole to move signals reasonably quickly and those planets are between 7 to maybe as much as 45 (in the case of Gregor) minutes FTL time from their respective terminus. Everything else is days to months transit time and there isn't enough traffic to make the message time anywhere near as low as the raw transit time because normally you might wait weeks or months for a ship heading that way to carry messages for you (and them it's much more likely to be a freighter plodding along in the Delta bands than a DB pushing the upper limits of the Theta bands)

The whole financial system, once you get beyond a single system (and to large part once you get beyond a single planet), as a practical matter has to be built around irregular batch updates at unpredictable intervals. It just won't be built around the ultra tightly linked setup that Earth currently has; and which are necessary to make high-speed trading practical.

tlb wrote:Can FTL communication occur within a hyper band? It seems probable, but it is not clear what range would be available. However one problem is that the communication is within the band, you would still need to physically carry the resultant data down into normal space.

Yes, but it's not as useful as you might think. The issue is that the FTL signal travels at the speed of light of the next higher group of hyper bands.

Which is great in normal space as the speed of light in the Alpha bands is 62 times faster than in normal; a major time savings.
But the higher you go the smaller the differential.
RFC provided a handy chart of effective speed by hyper band and you can use that to see what the FTL advantage in each band would be by dividing the velocity multiplier of the next band by that of the current band..
Normal space - FTL 62x faster than radio
Alpha bands - FTL 12.4x faster than radio
Beta bands - FTL 1.9x faster than radio
Gamma bands - FTL 1.5x faster than radio
Delta bands - FTL 1.3x faster than radio
Epsilon bands - FTL 1.2x faster than radio
Zeta bands - FTL 1.2x faster than radio
Eta bands - FTL 1.2x faster than radio
Theta bands - FTL 1.2x faster than radio

While FTL in the Theta bands is 6000 times faster than radio in normal space; it's only 1.2 times faster than radio from a ship of buoy in the Theta bands. (Which also means the higher you are the less the FTL links of Apollo help your SD(P)s - though Apollo is pretty darned nasty even without those.


But aside from that, you're right that we'd need to use ships to move the data across the various hyper walls since no known signal can be seen across even a single hyper wall. (Despite ThinksMarkedly's hopes for such a system being eventually developed). Also given the fairly short range of a Hermes buoy we'd apparently need to hang a lot of them to get a working link (and then they'd need periodic fueling and servicing - and since some systems are in the middle of a grav way you'd need at least some buoys big enough to mount sails to stabilize themselves there). There have been a few threads over the years discussing this (but then, what haven't there been threads discussion?)

IIRC an individual Hermes buoy can reach less than 10 lighminutes, if you want more you need another to relay the signal. That implies that there are about 40-50 (assuming no redundancy) making up the ~7 lighthour chain from Manticore to the Junction.

In comparison to run a chain of them from Manticore to Grayson (a piddly 31 LY) through the Theta bands would (assuming no range reduction there) require about 325. Of course at the moment about 80% of the galaxy would sell their grandmothers to be able to swipe even a single Hermes buoy - so a chain of hundreds stretching across the light years is a invitation to theft and reverse engineering. (which is a problem since Hermes gives you most of what you'd need to build some Apollo-like capability for FTL missile control)

Ignoring the time it takes the ships on each end to carry the message to and from Theta that'd get a signal down the length of the chain in about 46 hours (compared to 55 hours if you used basic radio/laser links on the buoys - or 91 hours if just taken there by DB)

I disagree about the major financial center of the SL and the rest of human space being on Manticore.

At the very least, the Mandarins would have been really worried about the SL Government's situation of the heart of the human financial markets was on Manticore.

While Manticore is a major player there are too many places within the SL that would be more centraly located (by virtue of location and communications to locatons with the League and beyond. It doesn't have to be located on Earth but it is more reasonable that that there are multiple major centers scattered around and at least one local center in each system. Think NY, Tokyo, Beijing, London, etc.

As far as as intersetller branches of banks (and brokerage houses) that would mirror to some extent the development of banking in the 18th, 19th and 20th centuries. Home office and then sub offices dealing with whatever area you are talking about. More likely a multi-system bank would have a regional branch location in the capital city of the inhabited planet of each system they expand into and then anything more local to othere cities etc would be based on populations and preceived markets they want to be in.

18th century there were not so much banks outside of major countries as Merchant Factors who could issue or advance on drafts against financial companies. They could be employees (or partners) of major banking houses and often they would represent more than one. It was trade and finance. Lack of what we know as banking and finance was a major problem in the US in the colonial period and got worse after independence. Dam few people understood finance at theat level and there was a challange of being able to exchange goods for money and the reverse. Also for being able to fund purchases or expantion by borrowing. Long involved subject.
Setting up the first Bank of the United States was a massivley contested issue, again involved subject.
So by the 19th century there were more banks in more places (usualy countries) which we would recognize as banks but there was not the "branch" system that really came into being in the 20th century and in it's present form has evolved from the electroinc exchange of information/tracking transfers of money. Yes, you can walk into a branch of some large banks on countries other then where they call home and get your money.
Doing that on Manticore against an account you opened at a branch of the same bank on Beowulf or Earth would depend.....no, I don't want to get into it.

Manticore is very well off and has that income flow from the Juncton but it is not the financial center of the human universe. There will, however, be services and connections there that let you access the greater sphere of interstellar finance.

Dam, I would really like to get a 3rd party consulting gig to do documentation review on the Manticore branch of Bank of New Chicago. Just the trip out to Landing on Manticore from Earth would be increadable.

Brigade XO wrote:I disagree about the major financial center of the SL and the rest of human space being on Manticore.

At the very least, the Mandarins would have been really worried about the SL Government's situation of the heart of the human financial markets was on Manticore.

While Manticore is a major player there are too many places within the SL that would be more centraly located (by virtue of location and communications to locatons with the League and beyond. It doesn't have to be located on Earth but it is more reasonable that that there are multiple major centers scattered around and at least one local center in each system. Think NY, Tokyo, Beijing, London, etc.

As far as as intersetller branches of banks (and brokerage houses) that would mirror to some extent the development of banking in the 18th, 19th and 20th centuries. Home office and then sub offices dealing with whatever area you are talking about. More likely a multi-system bank would have a regional branch location in the capital city of the inhabited planet of each system they expand into and then anything more local to othere cities etc would be based on populations and preceived markets they want to be in.

18th century there were not so much banks outside of major countries as Merchant Factors who could issue or advance on drafts against financial companies. They could be employees (or partners) of major banking houses and often they would represent more than one. It was trade and finance. Lack of what we know as banking and finance was a major problem in the US in the colonial period and got worse after independence. Dam few people understood finance at theat level and there was a challange of being able to exchange goods for money and the reverse. Also for being able to fund purchases or expantion by borrowing. Long involved subject.
Setting up the first Bank of the United States was a massivley contested issue, again involved subject.
So by the 19th century there were more banks in more places (usualy countries) which we would recognize as banks but there was not the "branch" system that really came into being in the 20th century and in it's present form has evolved from the electroinc exchange of information/tracking transfers of money. Yes, you can walk into a branch of some large banks on countries other then where they call home and get your money.
Doing that on Manticore against an account you opened at a branch of the same bank on Beowulf or Earth would depend.....no, I don't want to get into it.

Manticore is very well off and has that income flow from the Juncton but it is not the financial center of the human universe. There will, however, be services and connections there that let you access the greater sphere of interstellar finance.

Dam, I would really like to get a 3rd party consulting gig to do documentation review on the Manticore branch of Bank of New Chicago. Just the trip out to Landing on Manticore from Earth would be increadable.

David's words on the matter:

https://infodump.thefifthimperium.com/entry/Harrington/236/1/

"first among equals" is the line that stands out.