
The Theranos Implosion and Robert Shiller on Short Selling and Complete Markets - ourmandave
http://www.forbes.com/sites/timworstall/2016/07/09/the-theranos-implosion-and-robert-shiller-on-short-selling-and-complete-markets
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gwern
One of the possibilities of decentralized prediction markets is for completing
markets and bypassing current markets. In this case, it's not even about avoid
regulation, it's that you simply can't find anyone with Theranos stock who
will lend it to you for shorting, and if you could, the pseudo-price would be
so unreliable and pumped up that you wouldn't want to (all the VCs agree that
Theranos is great and their shares are not down from the previous round -
right up until Theranos goes down in flames). If you can short a stock
normally, great, no need to bother with Ethereum or Bitcoin; but you can't buy
or short Theranos on the normal markets... though you can set up a prediction
market on a Theranos-related question like whether it will IPO or whether
Fortune will continue to rank Holmes as a billionaire etc.

