the whole theory of efficient markets runs into big trouble when there are assymmetries of information. some big moves before the nonfarm payrolls job reports were released raised eyebrows this morning. it is highly likely that some traders had access to those numbers before the government published them. this isn’t all that surprising to me, given the incestuously tight relationship between wall street firms, banks, and the US government (two of the last secretaries of the treasury have come from goldman sachs, for example). neither, sadly, is it surprising to me that very few people are likely to care.
i’m still a relative noob at finance and markets, but i spend the bulk of my time reading and thinking about them these days (and acting on research by putting money on the line). one of my favorite finance bloggers is bill cara, and a recent post of his i think does a pretty good job of placing an incident like this in context. his tone is occasionally slightly eccentric, but his credentials are impressive and the information i get from him invaluable.