[ryandrake]

Setting aside the national security question, more broadly it's pretty insane that the USA lets companies hide who owns/controls them. When you decide to hang out your shingle and profit at the expense of the general public, I would say the general public has a genuine right to know who you are.

Reminds me of how Disney used aliases and codenames and shell companies and secretive ownership structures to buy up all the land for Disney World in Florida[1], so that sellers didn't know who was behind it. This should be illegal.

1: https://www.wesh.com/article/disney-world-beginnings/3780786...

[detourdog]

My uncle was driving from Miami to Pennsylvania and saw the building activity. He thought it was more NASA building and put together a syndicate to buy as much land as possible. Disney bought his first plot and he turned around and bought the more as close as possible. He didn't need to know what was going.

The USA was founded on the use of capital and I'm always shocked how deep it runs including this anonymity.

found this article

https://archive.is/PmoL4

That article is more or less accurate but I have to add this story about him from a funeral late in life.

Standing around not knowing what to talk about he looked down at his tie. He started talking about how much the tie cost. This launched a story about the first time he had to buy an expensive tie when he was young to make an impression. He reflected on the luxury he currently enjoyed of not having to buy an expensive tie.

[Negitivefrags]

I am also an advocate for transparency of ownership of companies, but that Disney example seems like more of a case against transparency than for it?

Why should Disney be price gouged in that circumstance?

[Loquebantur]

By your logic, insider trading would be just fine.

For a market to function properly, information pertinent to traded value has to flow freely. The more you stifle that, the more rigged the market. Essentially, you sustain a monopoly that way.

Of course, people in possession of such "insider information" believe themselves in the right to profit from it. But that perspective is obviously biased and reveals a fundamental conflict between public good and private ownership. From the public perspective, the market works best when monopolies are dissolved quickly.

[snapplebobapple]

Land is a tough one though because the information that person x is buying it to amalgamate the land for some purpose lets the remaining land holders abuse the market power of being the hold outs for further gain. The problem is the piecemeal nature of accumulating the land for a project means you have market power abuse issues on both sides and secrecy alleviates some of that from the buyer side.

[kasey_junk]

In the US (but not necessarily other jurisdictions), insider trading laws are not there to protect the broader market, but to protect other shareholders.

There is no assumption that you can’t trade on knowledge unavailable to the rest of the market just not information that should be available to other shareholders but isn’t.

It’s not about a working market it’s about preventing you from stealing from other people.

Lots of economists think insider trading should be legal, precisely because it would make the market more transparent, not less.

[Loquebantur]

Lots of economists are clearly wrong, as mutually excluding statements cannot be simultaneously true. To find out which side is which, you can employ simple logic.

If you sustain a profitable information imbalance, you prevent the market from reaching a more efficient state. You steal from everybody else that way. And incur opportunity costs that will dwarf any profits made. Not necessarily on a short-term personal level, certainly on a societal one in the long run.

People have surprising difficulties understanding, they are that society.

[SideQuark]

> Lots of economists are clearly wrong, as mutually excluding statements cannot be simultaneously true. To find out which side is which, you can employ simple logic

The world isn't black and white, and nearly zero things as complex as pros and cons of allowing insider trading can be reduced to naive boolean logic.

It is a fact for a long time a lot of economists, perhaps even a majority, are for insider trading because it provides signal to markets and pricing quicker than only allowing investors to discover problems on a quarterly clock-tick, which results in a lot more damage from asset floodgates instead of smoother transitions.

Ever read any published paper on the topic? Use Google scholar, you'll find useful knowledge there.

[tptacek]

The whole premise of price discovery is that participants in the market profit from information imbalances. The profit motive is the incentive for people to expend effort to generate and then, through price signals, disseminate information.

[imtringued]

No it isn't. In neoclassical economics there are no information imbalances. Everyone has access to perfect information and yet prices are formed and updated anyway.

[johngladtj]

Insider Trading is just fine.

[Loquebantur]

No, it's really not.

If it were, shell games would be great as well? One like the other is simply fraud. You exploit others' lack of insight.

Doing so is unethical due to the implications it would have on a societal level if it were condoned. In particular, you likely imagine yourself regularly ending up on the better end of the bargain. You are wildly mistaken.

[johngladtj]

Insider Trading is just fine because it allows the market to function.

If you don't want to participate in it you don't have to, but why should other suffer because of your moral hangups about other people making money?

[anigbrowl]

Why should Disney be price gouged in that circumstance?

Because they have money and they're trying to buy out the whole market. This reads like a billionaire sobbing about not having access to a senior discount at the thrift store.

[vinceguidry]

That place was absolutely nothing before Disney developed it. The land was worth exactly what Disney paid for it. And there was no guarantee that it would turn into what it is now. We reward business for taking risks with their money. Disney took an immense amount of it, an absolutely outlandish amount of it. They poured money into that swamp. All on the bet that people would pay through the nose to see Mickey.

[anigbrowl]

I'm not complaining about Disney making money off their investment. I'm saying that if a large company wants to make such an investment, it shouldn't dissemble by hiding behind front companies.

[vinceguidry]

They wouldn't have gotten a fair price otherwise.

[anigbrowl]

Sure they would. Fair isn't some objective measure, it's what the market decides. If multiple market participants see that one player is trying to corner the market, raising their price is fair. It can equally be argued that those swampland owners bought the land in the first place because they had a vision that it could one day host a unique commercial enterprise.

If your business strategy depends on deceiving people, what does that make you?

[detourdog]

I just have to point out Disney was paying top dollar for swamp land. The whole deal worked because Florida and Disney invented a public private partnership based on Reedy Creek.

I’m not 100% sure but I believe the model is what birthed HOA and Gated communities.

Permitting certain freedoms made swamp land more valuable.

[croutonwagon]

If a company, not just Disney, is buying large swaths of land specifically to develop it, that makes the land more valuable.

If a company is going to great lengths to trick sellers into thinking it’s not being bought up for development, that’s deceit and a de facto admission you know the land is more valuable because of the comps you are engaging in

[jonathankoren]

Price gouged? Don't you mean, fair market value? Price is always contingent based on the information shared between the buyer and seller.

No one would call selling a rare misprint 1978 US Quarter to a collector for $45,000 instead of 25 cents price gouging. (Maybe you would, I don't know what the going rate is. But this is literally an eBay auction price from a google search just now, so let's just say that it's not an exorbitant price.)

[koolba]

> Price gouged? Don't you mean, fair market value? Price is always contingent based on the information shared between the buyer and seller.

Since when? Buying and selling anything is always a game of imperfect information.

There’s nothing special about the buyer being a large corporation or the item being land.

[fnimick]

And shouldn't you support having as much information be available as possible, or do you want people to play games and try to hide info to raise prices on people?

[JackFr]

You've got a parcel of land. You are farming on it or renting it or doing something which generates income. Because of that, you discount your future cashflows and determine it is worth X. Disney comes along and estimates that with what they are going to do the land is worth Y, which is significantly higher than X.

If the land trades for any value between X and Y, you are both made better off by the trade.

There is nothing wrong with you trying to capture as much of Y-X as you can, similarly there is nothing wrong with Disney trying to capture as much as they can. Neither of you are "owed" the money and there is no such thing as an objectively "fair" price.

[koolba]

> And shouldn't you support having as much information be available as possible,

Nope. And arbitrary or subjective standards like that are impossible to enforce anyway.

> or do you want people to play games and try to hide info to raise prices on people?

The example cited is the reverse with the price being lower than would be demanded if the seller knew the buyer had fat pockets.

In either case, caveat emptor[1] (or in this case, caveat venditor).

[1]: https://en.wikipedia.org/wiki/Caveat_emptor

[ryandrake]

Caveat emptor is a pretty terrible way to run a society. I'd argue if you deliberately misrepresent something as basic as who you are in a transaction in order to deceive your counterparty, that should be fraud.

[s1artibartfast]

It's not something that needs a uniform solution. Every buyer and seller can decide how much information they want and the price they want.

[jonathankoren]

Why are you encouraging imperfect information? Aren't you a fan of efficient market based solutions?

[numbsafari]

Why should the sellers be shortchanged?

[diogocp]

If the increase in value of the sellers' land is wholly due to Disney's development of its land nearby, the sellers would simply be benefiting from a positive externality created by Disney. Thus it would be Disney being shortchanged if it was unable to capture the value of that externality.

From an efficiency standpoint it is also preferable for the developer to capture the value, as naturally that increases incentives for development.

[bravoetch]

Is it okay for the buyer to lie, but not okay for the seller to ask for the truth and adjust their price accordingly? This 'anything goes' market ideology is the same framework that leads us to deceptive subscription systems, anti patterns etc. Deceiving people to make a buck is shitty behavior.

[ryandrake]

I’m pretty shocked by the whole “profiting from a deceptive transaction is ok if the counterparty believes you” attitude here. I guess I expected more out of HN. I feel like I’d have to keep my hand on my wallet and my eyes over my shoulder if I ever visited any of these guys’ businesses.

[Arainach]

HN has for a long time (longer than I've been here) had a strong libertarian streak, and like all libertarians they always seem to believe they're the ones who would come out on top in anarchy despite all historical evidence to the contrary.

[gowld]

From an efficiency standpoint it is preferable for a Land Value Tax to incentivize selling to whoever will put the property to best use.

[mcphage]

> If the increase in value of the sellers' land is wholly due to Disney's development of its land nearby, the sellers would simply be benefiting from a positive externality created by Disney

Isn't that true of any price increase due to increased demand? It seems like you're saying a seller shouldn't be allowed to raise their prices as demand increases, because they'd simply be benefiting from a positive externality created by the buyer.

[s1artibartfast]

Nobody was short changed. The fair price is what a buyer and seller agreed to unless someone provided false information.

The word "no" is a complete answer to a request for more information.

[ethanbond]

That’s true only if both parties have perfect information, which is of course why Disney went to great lengths to prevent that.

There would be no such thing as fraud if “accepted transaction == definitionally fair.”

[s1artibartfast]

Perfect information has nothing to do with fair

There's a difference between false information and no information.

[ethanbond]

False information like

Q: Who is buying this land?

A: XYZ Shell Corp (no connection to who is actually effectively buying and coming into control of this land)?

Obviously your argument will be "it's not false that XYZ Shell Corp is buying it," and sure, but it's obviously misleading in a way that affects the transaction, as it is specifically designed to do.

[nerdponx]

It's not about fairness, it's about letting markets work properly, reaching a market-clearing price that maximizes total welfare.

[pohl]

It has everything to do with price, however — and, therefore, "fair price".

[victorbstan]

Free market?

[voytec]

> it's pretty insane that the USA lets companies hide who owns/controls them.

There's sadly been a move also in Europe to make it impossible for the public to learn who really owns a company[1]

[1] https://nitter.net/pevchikh/status/1597588206874157058

[DrBazza]

Same in the Uk. Anyone can set up a company for pennies. So many expensive homes in London owned by shell companies. The government tried to introduce a law to make the ownership more transparent. Didn’t really work.

[zimpenfish]

> The government tried to introduce a law to make the ownership more transparent. Didn’t really work.

I mean, it's not like they were going to expose their own nefarious dealings...

[prewett]

> When you decide to hang out your shingle and profit at the expense of the general public

Whoa whoa whoa, you can't just assume that profits come at the expense of the public! There are plenty of businesses that provide valuable goods and services for which I am happy to pay their profit margin, because the value they are providing to me is at least that amount. There are entire companies that spend their entire day coordinating shipments of food for me, including out-of-season fruit and fruits and vegetables unavailable in my location. There are companies that have invested in hideously expensive fabs and detailed technical knowledge to bring my inexpensive microchips that make my first computer look glacially slow. I happily pay Apple's profit margin because I get great hardware that looks elegant and has an operating system that is both Unix and doesn't require me to futz with it. The list goes on. This Marxist idea that companies are inherently exploitative is just incorrect and unhelpful. (That doesn't mean that everything is necessarily great, though, just that it does not take into account the other, very real side. It's not like a society built on companies = exploitative has ever worked in the real world.)

[colechristensen]

>Over a veto of President Trump, on January 1, 2021, the Corporate Transparency Act (“CTA”) went into effect as part of the National Defense Authorization Act (“NDAA”). The CTA, many years in the making, introduces major changes to transparency requirements of entities registered in the United States. No longer can anonymous shell companies, limited liability companies, and the like hide the identities of their owners.

https://corpgov.law.harvard.edu/2021/02/04/the-end-of-the-an...

[caeril]

> it's pretty insane that the USA lets companies hide who owns/controls them

1. Anonymous LLCs and Trusts are how many people protect their privacy. Not just Disney, but regular people. The only things "insane" here are those who want to strip away that option.

2. If you break the law, your anonymity can and will be stripped. There are processes for this.

3. There is a zero percent chance that the NSA doesn't have access to these records, if "national security" is a concern.

Are there any other concerns, other than your stanch belief that your nose has an absolute God-given right to be in everyone else's business?

[sixstringtheory]

> the general public has a genuine right to know who you are

Why? If there are legitimate issues, you can always be dragged into court, or at least your business can be boycotted and suffer bad PR etc.

Being forced to put your home address just so every whacko with internet access can threaten your children, who had no choice in your business decisions, sounds like just a terrible idea.

Try making a false claim against yourself on r/RBI with dox and report back.

[dragonwriter]

> Why? If there are legitimate issues, you can always be dragged into court,

One of the major reasons for concealing who the real owner is of, well, anything is to conceal legitimate issues.

> or at least your business can be boycotted and suffer bad PR etc.

Not if you are concealing ownership to separate an act from the business entity that you would be concerned with retaliation against.

[sixstringtheory]

What kind of retaliation do you want? I'm saying the company can suffer or go bust, and civil and criminal proceedings can be enacted that can pierce the veil.

I'm saying the privacy measures are to protect against extralegal vigilante retaliation.

[onetimeusename]

There are cases where I think corporate anonymity protects people. If you start a business in something that is targeted for harassment, I think you should be able to protect your identity. The downside of this is the risk of national security threats. But I feel strongly for people who don't want to be targeted for abuse.

[snyda]

Why does "the general public" (whatever that means) have the right to the identity of land buyers?

[sneak]

They don't let you hide it from the IRS, only the general public.