Bad News Predictor Jailed
The Economist a month ago:
Back in September a message appeared on an online bulletin board owned by Daum, the most popular web host in a country, South Korea, with a huge internet culture. Written by someone called "Minerva," it predicted the imminent collapse of Lehman Brothers, a now-defunct investment bank.
Wild speculation is normally disregarded, but when it proved to be right just five days later, a prophet was born. Word raced through the "netizen" community, and when Minerva went on to predict that the Korean won would fall against the dollar by around 50 won a day in the first half of the week of October 6th, his followers began to watch the currency markets in anticipation. The won did indeed fall by about that much over the next three days.
Minerva became an internet phenomenon, with 40m-odd hits to date. Web-users combed through previous posts, looking for prognostications, and clues about his identity. Sharp comments on the state of the Korean economy and government policy only increased his standing. … It came as little surprise when the finance minister, Kang Man-soo, admitted that officials had attempted to uncover the blogger's identity.
Today's news:
South Korea set a rare and controversial example over the weekend by arresting a popular blogger who was accused of undermining the financial markets but worshipped by many Koreans as an online guru.
The man, known throughout South Korea by the pen name of Minerva – after the Roman goddess of wisdom – upset the government with his doomsayer's forecasts for the economy and his satirical attacks on President Lee Myung Bak's policies. But when some of his predictions on the markets proved right, he gained a huge following among South Koreans fretting over an uncertain economic future.
Park Dae Sung's arrest on Saturday on charges of spreading false online information with a harmful intent – a crime punishable by up to five years in prison – came as the South Korean government was escalating its efforts to fight the fallout of the global financial turmoil. … The government has become increasingly sensitive to negative reports on its economy. … Newspapers reported his predictions. The government scrambled to dispute his claims. …
When state prosecutors stormed his apartment on Wednesday evening, however, they found a soft-spoken 31-year-old Internet buff in between jobs who holed up at home reading mail-order books on finance and scouring the Web. His formal education ended after a two-year community college course in information technology. …
The commentary that got him in trouble was his claim on Dec. 29 that the government issued an "emergency order" to financial firms and major corporations to stop buying U.S. dollars in a dire effort to arrest the fall of the Korean won. The government was forced to issue a denial … Park apologized and withdrew his Dec. 29 posting. Many of Park's predictions proved wrong, and he often did not substantiate his claims. He also lied about his background.
Does anyone think Park would have been jailed for a mistaken optimistic claim, or that government officials will be jailed for making false claims? Hat Tip to Sun Cho.
Anonymous: From Wikipedia:
In the first quarter 2008 GDP grow only 0,1%. The government made a supplementary negative budget, which was passed by Riigikogu. The revenue of the budget was decreased for 2008 by EEK 6.1 billion and the expenditure by EEK 3.2 billion.
do these lucky guessers (i assume that was what he was doing--maybe i'm wrong!) cause problems for decision markets because they are so sensational people give them too much credence? i know people can bet against the lucky guesser and might stand to make some money, but i wonder if contagion is too much of a problem in some cases. i don't really know.