Are there ID implications in the detection of insider trading?

_{Denyse O'Leary

June 23, 2014

Intelligent Design, News}

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The professors examined stock option movements — when an investor buys an option to acquire a stock in the future at a set price — as a way of determining whether unusual activity took place in the 30 days before a deal’s announcement.

The results are persuasive and disturbing, suggesting that law enforcement is woefully behind — or perhaps is so overwhelmed that it simply looks for the most egregious examples of insider trading, or for prominent targets who can attract headlines.

The professors are so confident in their findings of pervasive insider trading that they determined statistically that the odds of the trading “arising out of chance” were “about three in a trillion.” (It’s easier, in other words, to hit the lottery.) More.

Naw. All just randomly firing neurons.

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Comments

Mark Frank:
This is straightforward reasoning by comparison of likelihoods. If that is all ID means then it is not controversial.
That is not all ID means but it is part of it.Joe_{June 24, 2014
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Sal, Eric What is going on here is that two hypotheses are being compared as to the pattern of trading (including its timing). 1) The trading was performed as usual by intelligent people with no insider knowledge. 2) The trading was performed by intelligent people some of whom had insider knowledge. The pattern appears to be far more likely given (2) than (1). This is straightforward reasoning by comparison of likelihoods. If that is all ID means then it is not controversial. But note that the two hypotheses both involve design and are formulated in some detail.Mark Frank_{June 24, 2014
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Mark Frank:
Joe – insider trading is always done by intelligent people – but so is all trading. So any method that purports to detect insider trading among other types of trading is not detecting intelligence – we already knew that.
It is detecting intelligent design, Mark.Joe_{June 24, 2014
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Mark, the confusion may result from thinking that the act of trading itself is what is at issue. It is not. Yes, every act of trading is arguably a decision -- whether directly, or indirectly through an pre-scheduled trading schedule, a trading algorithm or otherwise. The issue in the so-called "insider trading" cases is not whether the insider made a trade. The issue is whether that decision to trade coincided with other timing factors to the extent that a pattern of illegal behavior could be established. Don't focus on the act of the trade itself; rather the timing of the trade. That is where the pattern lies. That is where the chance vs. design analysis lies in these kinds of cases.Eric Anderson_{June 23, 2014
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All decisions to buy and sell options are the result of intelligent decisions.
Detecting design of known intelligent designers is legitimate design detection. Sometimes it is important to detect layers or higher levels of design. When reverse engineering is done, it's not merely trying to determine if the object is designed (that is blatantly obvious) but seeing the layers of design. For example: http://en.wikipedia.org/wiki/Beale_ciphers#mediaviewer/File:Beale_1.svg clearly this document was designed (since it is written by a human), but what are the layers of design. The Specified Improbability is recognized if one sees that it is a Beale Cipher and has access to the decrypting book. There maybe polyconstrained layers of design in DNA. Here is an example of layers of steganography design involving a prank played on AN Wilson in some seemingly ordinary text. https://uncommondescent.com/intelligent-design/design-inferentially-challenged-it-couldnt-happen-to-a-nicer-guy/ I believe God made DNA. The question now for me is are there polyconstrained structures in DNA, and what are they. Here is a celebrated design but the design details have never been detected. Even if it is hoax it is still designed, and if it is not, then it is still designed, but no one knows the design. http://en.wikipedia.org/wiki/Voynich_manuscriptscordova_{June 23, 2014
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Joe - insider trading is always done by intelligent people - but so is all trading. So any method that purports to detect insider trading among other types of trading is not detecting intelligence - we already knew that.Mark Frank_{June 23, 2014
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Mark Frank, you do not understand the issue. The question is not whether the trading happens by decision (at some level we could argue that it always does). The question is whether that decision of trading matches up with a specification (in this case, an increase in stock price). The whole trading scandal that broke several years ago was identified precisely by looking at these kinds of patterns, and it is most definitely an example of intelligent design detection in action. Today (and partly as a result of the trading scandal) many companies have their officers and directors enter into pre-scheduled trades. For example, a CEO might decide he wants to offload 120,000 shares. So the trading may be put on an automatic schedule that says, for example, "Sell 10,000 shares on the first day of the month for the next 12 months." Now, some of those trades may end up being great for the CEO; some less so. But as long as he can demonstrate to the SEC that the trades were pre-scheduled and automatic, he is in the clear. Furthermore, in such a pre-scheduled situation, his trades are not likely to attract attention in the first place, because some will be up, perhaps some down, etc. In stark contrast, what was happening several years ago that provoked the scandal was that option holders were being given a certain amount of lag time to complete paperwork, get documents filed, report trades, etc. That is a natural result of typical bureaucracy and red tape and human nature. That wasn't a problem. But eventually some enterprising folks started taking advantage of that lag time to doctor paperwork to show, for example, that CEO Bob just "happened" to buy shares 15 days ago before the big run-up in the stock price week. Very convenient. And perhaps CEO Bob did time his purchases just right a few times. But when it started to happen over and over and over, the guy starts to look suspiciously more than "lucky." Eventually with more and more of a pattern, the evidence becomes pretty clear that it was not luck (meaning, in the ID parlance, it was not chance), but purposeful (meaning, in the ID parlance, by design). Inappropriate trading practices have been uncovered by design detection principles, and it is a good example of design detection in action. That is true even though the odds of, say, life arising by purely natural processes is orders of magnitude less likely than what we accept as "proof" of inappropriate trading practices. The useful (and successful) application of these principles to inappropriate trading practices is just one more example of every sane person being perfectly fine with the concept of design detection in real life. As long as it doesn't interfere with their a priori philosophical presumptions about the universe and life . . . ----- Incidentally, just a pedantic note on terminology: "insider trading" is not illegal. "Insider trading" simply means that stock was traded by certain individuals (officers, directors, etc.) who happen to be classified as "insiders." It is perfectly legal as long as the rules are followed.Eric Anderson_{June 23, 2014
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Surely this is utterly irrelevant to any supposed process for identifying intelligent design.
Insider trading is always by intelligent design, Mark, so how can it be irrelevant?Joe_{June 23, 2014
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Surely this is utterly irrelevant to any supposed process for identifying intelligent design. All decisions to buy and sell options are the result of intelligent decisions. The researchers are just hypothesising that these decisions were based on different information.Mark Frank_{June 23, 2014
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