Did people who knew about secret, CIA-led coups use that information to game the stock market?

[seemslikeadream]

http://www.slate.com/id/2203121/pagenum/all/


They Made a Killing
Did people who knew about secret, CIA-led coups use that information to game the stock market?
By Ray Fisman
Posted Tuesday, Oct. 28, 2008, at 7:07 AM ET


In 1951, Jacobo Árbenz Gúzman became Guatemala's second democratically elected president. Árbenz's authoritarian predecessors had been very sympathetic to American business interests, particularly those of the United Fruit Co. (now Chiquita), which had bought up land titles on the cheap from Guatemala's corrupt elite for its ever-expanding banana empire. Once in office, Presidente Árbenz sought to take it all back, nationalizing UFC's Guatemalan assets and redistributing them to the poor.

But UFC had friends in very high places—the assistant secretary of state for inter-American affairs, John Moor Cabot, was the brother of UFC President Thomas Cabot. The secretary of state himself, John Foster Dulles, had done legal work for UFC, and his brother Allen Dulles was director of the CIA and also on UFC's board. Thanks to the Freedom of Information Act, we now know that the various Cabots and Dulleses had a series of top-secret meetings in which they decided that Árbenz had to go and sponsored a coup that drove Árbenz from office in 1954.

With a U.S. puppet back in the president's mansion, UFC's profits were safe. But it appears the company wasn't the only beneficiary of this Cold War cloak-and-dagger diplomacy: A recent study by economists Arindrajit Dube, Ethan Kaplan, and Suresh Naidu argues that those in on the planning process also profited handsomely. By tracking the stock prices of UFC and other politically vulnerable firms in the months leading up to CIA-staged coups in Guatemala, Chile, Cuba, and Iran, the researchers provide evidence that someone—perhaps one of the Dulleses, Cabots, or others in the know—was trading stocks based on classified information of these coups-in-the-making.

...


Halliburton's stock price jumped 7.6 percent the day the Senate authorized the use of force in Iraq, so investors clearly anticipated that war would be good for the company. Did insiders also profit from advance notice of these sweetheart deals to come? Conspiracy theorists will no doubt be interested in what happened to Halliburton stock on days when less-public meetings took place. Cheney himself certainly could not have traded on any inside information—monitoring of insider trades and stock transactions is much more sophisticated now than it was in the 1950s. But perhaps others in the V.P.'s office or at Halliburton (or their cousins, or their cousins' cousins) might have been able to do some trading on the sly. If so, they may have left tracks in the data for researchers to follow.

[midnight]

1. I never understood this type of profit. The fact that

Hallibuton makes profit from murder should deem them unable to participate in trade of any kind.

[peacetalksforall]

2. They are all about death and theft. Embroidered towels to cluster bombs. Using.

a batallion of enablers and 100% of the five corporate tv networks - Murdoch, Time-Warner, GE, Disney, Viacom and all their partner companies, plus four major papers (NYT, WP, LAT, WSJ).

Wall Street and the WH/Pentagon could not have stolen and killed without their backing without AND THE REVERENDS who mobilized the hate and fear.

[peacetalksforall]

3. They are all about death and theft. Embroidered towels to cluster bombs. Using.

a batallion of enablers and 100% of the five corporate tv networks - Murdoch, Time-Warner, GE, Disney, Viacom and all their partner companies, plus four major papers (NYT, WP, LAT, WSJ).

Wall Street and the WH/Pentagon could not have stolen and killed without their backing without AND THE REVERENDS who generated and mobilized the hate and fear.

[wildbilln864]

4. Of course they did! nt

:hi:

[malaise]

5. You betcha

Criminals all.

[Octafish]

6. CIA Founders WERE Wall Street.

Their taskmasters still ARE Wall Street, except the BFEE brought in silent partner types.



Know your BFEE: Spawn of Wall Street and the Third Reich

Thanks for the heads-up, 'Dreamy. Proud to K&R. Proudest to be your Pal.

[nashville_brook]

7. "shares of coup-affected companies went up by a total of 10 percent..."

In all, shares of coup-affected companies went up by a total of 10 percent following top-secret authorizations, swamping the 3.5 percent gain that came immediately in the coups' aftermaths. If information hadn't been leaking into the stock market via insider trading, then the entire impact of the coup should have appeared only when the very public invasions took place and the investing world finally got news of the regime change. Unfortunately, there are limits to what these stock-market forensics can uncover. When the researchers contacted the Securities and Exchange Commission to find out who was trading on these days, they learned that there are limits to what the Freedom of Information Act could provide. So, we can't pin the apparent insider trading on anyone in particular.

There's also some evidence, albeit tentative, that the market was very good at forecasting the coups' success and failure—a further indication that the traders driving up the price had detailed knowledge of the covert plans (and their expected outcomes). The CIA-led invasion of Cuba is referred to these days as the Bay of Pigs fiasco for a reason, and whoever was trading on insider knowledge seemed to place his bets accordingly—the pre-invasion increase in American Sugar's stock price was much lower than the gains for companies affected by the other, successful coups in the study.

[hootinholler]

8. There are still unclaimed shorts on airlines stocks from 9/11 n/t

[happydreams]

9. K&R. The Dulles bros. go way back to WWI when their uncle

Roberta Lansing was Sect. of State and the boys got a little practice in crafting a foreign policy at odds with Wilson.

[judasdisney]

10. seemslikeadream ... have you heard anything about Slate being a CIA asset?

This is one of those articles that contains lots of info -- and makes me wonder about the parameters of what they're NOT disclosing (what they're steering the reader away from).

The obvious omission -- the CIA's Buzzy Krongard's ties to put options on 9/11 -- is not the only omission I'm referring to here.

Apparently, AIG (the insurance firm recently given a fat bailout) is a CIA front dating back to the 1940s:

http://spitfirelist.com/?p=2339

Other info regarding the CIA -- or the Neocon NSA -- and their stock market involvement:

http://ftrsummary.blogspot.com/2008/09/ftr-641-were-we-controlled-part-ii.html

I've seen various articles over the past couple of years that Slate has CIA ties. I can't find these links offhand, because when you Google (another CIA-rumored front) the search terms "CIA" and "Slate" you won't get far.

Thanks for posting this anyway, seemslikeadream. All the pieces matter.

[MisterP]

11. heck, with Guatemala they launched a PR campaign in Time,

Newsweek, & the NYT about horrors, paid "fact"-finding trips, and an NBC doc on Reds at our doorstep
but what's 200,000 butchered among friends? They should've just submitted to their imposed masters, and there wouldn't have been a war: John Norton Moore sez there's no difference between East and West, revolutionary and oppressive counterrevolutionary, so...

[pitohui]

12. wouldn't you?

they were killing people to keep them pretty much basically as slaves in guatemala, why on earth would a murderer blink at an illegal stock transaction?

once you are in a conspiracy to commit murder and to assassinate, you have nothing to lose by throwing in some insider trading, you're in for a penny, in for a pound...

[happydreams]

13. This really is a good point. One I have considered before. ......

It begs a bigger question. The conventional wisdom perpetuated to justify such crimes as those committed in Guatamala is to prevent the Commies from getting a foothold. This went a long way toward keeping these crimes under wraps for the sake of "national security". But, if those same people were caught profiting off of that system personally, or even institutionally, then this would destroy or at least greatly compromise their credibility and bring a whole host of other issues into play.