<i>basically be a description of how the real estate market works.</i><p>For example: a commercial real estate developer may be putting together &quot;an assemblage&quot;, which takes a bunch of disparate properties and tetris-style assembles them into a contiguous landmass to hold e.g. a larger commercial property with a signed anchor tenant and the plans for more.  The developer has important, market-moving knowledge about the near-term prospects for properties composing that assemblage: they are all about to become sharply more valuable <i>precisely because the developer has a use for them</i>.  The developer will send out someone who is isomorphic to my dad to discuss with the owners of each property, partially in serial and partially in parallel, to get them to sell to the developer.  Their goal is to get the properties as cheap as possible and <i>they are under no obligation to tip their hand as to why they want them</i>.<p>It is highly, highly in the developer&#x27;s interest to conclude all purchases before either a) the property owners or b) anyone else realizes what is going on.  This is complicated by many factors, including e.g. planning commission approvals required in some places which are public records.  A fairly common strategy among savvy local real estate investors is to a) identify assemblages before they are assembled and b) race the people putting them together.<p>&quot;They bought the corner gas station?  It&#x27;s useless without Milly&#x27;s house.  Have they closed Milly yet?  Quick way to check.  <i>calls Milly</i>  Milly, I was wondering, haven&#x27;t you considered being closer to your children?  Where did they live again, Florida?  Yeah, yeah.  Interested in selling your house if I give you a fair offer?  Well, we can talk it over any time, but $300k cash and I can close immediately.  Sure sure, let&#x27;s chat.&quot;<p>Real estate developers hate, hate, <i>hate</i> when it happens, because sometimes the market maker here has correctly intuited &quot;This deal doesn&#x27;t happen without the property which was previously occupied by Milly, right?  Man, that would be a shame.  $700k.&quot;  &quot;That&#x27;s an outrage.  It&#x27;s worth $250k.&quot;  &quot;You were certainly going to tell Milly that,which is why I gave her $300k.  But, between businessmen, it&#x27;s not worth $250k or $300k.  It&#x27;s worth whatever number your client is willing to authorize to get the assemblage done.&quot;  &quot;$600k you dirty dog.&quot;  &quot;$650&quot;  &quot;DONE.&quot;  &quot;Pleasure doing business with you.&quot;<p>Now naturally, sometimes the market maker guesses wrong.  He now is holding a house.  That&#x27;s the nature of the business.<p>This maps fairly directly to financial markets, except the &quot;assemblages&quot; are called &quot;block trades&quot;, they&#x27;re composed of fungible units rather than individually distinguishable properties, and this happens <i>much faster</i> and <i>much cheaper</i> because market makers are very, very good at their jobs.<p>You can imagine that the neighbor next door to Milly might notice the fact of Milly&#x27;s transaction (e.g. via hearing directly) or the market maker&#x27;s transaction (e.g. via public records).  This is analogous to the tape being painted in a lit exchange.  &quot;Ooh spiffy, my property is more valuable than I thought it was!&quot;  The real estate developer hates this as much as Brad Katsuyama hates when someone spills the beans that he&#x27;s putting a 100k trade together by painting the tapes with buy orders.<p>The real estate developer, and Katsuyama, should learn to deal with their disappointments or get better at executing on their only job.