Obama XXII: Occupy the White House

[Old Pio]

Re: Obama XXII: Occupy the White House

Well, this was inevitable--and right on the money, too.

http://www.youtube.com/watch?v=veGO0P0LBrw&feature=player_embedded

 

[dxmnkd316]

Re: Obama XXII: Occupy the White House

Subscribed because Obama told me to.

 

[Bill]

Re: Obama XXII: Occupy the White House

The Tobin Tax, if implemented correctly, sounds like it would help:

http://moneymorning.com/2011/10/11/bring-on-the-tobin-tax-but-only-after-making-this-one-key-fix/

 

[bronconick]

Re: Obama XXII: Occupy the White House

We need to make things in this country that Chevy/Wal-Mart crowd can buy and keep money in this country so it can be reinvested in this country. However, we've transitioned from a Manufacturing Society to a Service Society. And, for many, the service stinks.

Now I'm going to rant for a bit, but why should I pay $50.00 for an "extended warranty" on my new TV set? Why can't the manufacturer make a TV set that will last and not break down for 10+ years? Why do I have to buy a coffee pot after 2 years when my Mom's ancient percolator, built in the 1960's is still working?

*** happened to quality and pride in your work?

RANT OFF

You answered your own question. You're expecting quality out of people getting paid pennies overseas?

 

[Kepler]

Re: Obama XXII: Occupy the White House

The Tobin Tax, if implemented correctly, sounds like it would help:

http://moneymorning.com/2011/10/11/bring-on-the-tobin-tax-but-only-after-making-this-one-key-fix/

Good article.

Is there anybody out there that's going to try to defend high frequency trading? Is this one of those things where the perps try their best to keep it out of the news, because as soon as it becomes known the gig is up?

 

[geezer]

Re: Obama XXII: Occupy the White House

Good article.

Is there anybody out there that's going to try to defend high frequency trading? Is this one of those things where the perps try their best to keep it out of the news, because as soon as it becomes known the gig is up?

I don't know, but my brother is in finance. He said there's a new fiber cable going in (I think from Chicago to NY) that every trader needs to be invested in because if one of them is the few milliseconds behind the market otherwise, they'll be out of business. That doesn't seem right to me, that critical trades take place based on software faster than you can be aware of them. It goes back to my fear of the machines taking over.

 

[Kepler]

Re: Obama XXII: Occupy the White House

I don't know, but my brother is in finance. He said there's a new fiber cable going in (I think from Chicago to NY) that every trader needs to be invested in because if one of them is the few milliseconds behind the market otherwise, they'll be out of business. That doesn't seem right to me, that critical trades take place based on software faster than you can be aware of them. It goes back to my fear of the machines taking over.

I for one welcome our new titanium overlords.

The scale sounds scary, but your brother's story sounds like the next iteration in a business rule that's been repeated for every information conveyer from the telephone to clipper ships to the Silk Road to Pheidippides: speed kills.

 

[LynahFan]

Re: Obama XXII: Occupy the White House

Good article.

Is there anybody out there that's going to try to defend high frequency trading? Is this one of those things where the perps try their best to keep it out of the news, because as soon as it becomes known the gig is up?

Well, I seem to be one of the more vocal pro-market voices on here, so I may as well give it a shot: No, I can't defend it or condone it, but I can't put my finger on a reason why it should be illegal, either. Any suggestions? The best analogy that I can think of is pornography: I certainly don't condone it or defend it, and the people who produce it are probably (mostly) schmucks who I wouldn't care to share a coffee with, much less have over for dinner. However, the fact that I find their means of making millions of dollars distasteful doesn't mean I think it should be illegal or even that Hustler should be taxed at a disfavorable rate compared to, say, Sports Illustrated.

I certainly don't understand the intricacies of HFT, but another consideration is that I would think the markets themselves would move to curtail it if they felt it was going to hurt their long-term "brand." NYSE Euronext does not want the NYSE to be seen as too volatile, too unpredictable, or too unfavorable to more traditional traders - their customers would go find other exchanges to list themselves on. They surely must be keeping their eye on trends in HFT and would do something if they thought it really was going to destabilize the markets. The NYSE is a privately run exchange, so they can (and do) set their own rules to protect their business. I would trust them to make better decisions about what is good for the long term health of the market than I would the politicians on either side of the aisle.

 

[Handyman]

Re: Obama XXII: Occupy the White House

I for one welcome our new titanium overlords.

 

[5mn_Major]

Re: Obama XXII: Occupy the White House

Good article.

Is there anybody out there that's going to try to defend high frequency trading? Is this one of those things where the perps try their best to keep it out of the news, because as soon as it becomes known the gig is up?

Not well versed on the issue. But the general concept is fine to me.

I don't liken it to porn so much...but rather the casino business. If you want to day trade against these guys, do it at your own risk (which you would do anyways). These businesses are taking advantage of mispricing etc...and if they didn't do it, someone else would make that money. Frankly I'd much rather do away with pre market and after market trading when major announcments are made...and the average investor doesn't even have the option to buy. So HFT is smaller potatos to me.

But as with Vegas casinos...you must make sure that HFT gains are heavily taxed relative to someone slaving over a fryer.

 

[Kepler]

Re: Obama XXII: Occupy the White House

No, I can't defend it or condone it, but I can't put my finger on a reason why it should be illegal, either. Any suggestions? The best analogy that I can think of is pornography: I certainly don't condone it or defend it, and the people who produce it are probably (mostly) schmucks who I wouldn't care to share a coffee with, much less have over for dinner. However, the fact that I find their means of making millions of dollars distasteful doesn't mean I think it should be illegal or even that Hustler should be taxed at a disfavorable rate compared to, say, Sports Illustrated.

That's what a regulation is -- statutory infringement on a freedom because it has adverse consequences for the general well-being. Porn's not a good analogy either, because the issue at hand there is freedom of speech and freedom of the press -- explicitly Constitutionally protected freedoms.

I certainly don't understand the intricacies of HFT, but another consideration is that I would think the markets themselves would move to curtail it if they felt it was going to hurt their long-term "brand."

I don't agree at all -- this is like saying we don't need an FDA because the market will police its own food safety standards to protect its brand. If 2008 taught us anything it's that the market isn't magical or all-knowing, or even particularly clever -- and it won't curtail its own profit center.

 

[Kepler]

Re: Obama XXII: Occupy the White House

I don't liken it to porn so much...but rather the casino business. If you want to day trade against these guys, do it at your own risk (which you would do anyways). These businesses are taking advantage of mispricing etc...and if they didn't do it, someone else would make that money. Frankly I'd much rather do away with pre market and after market trading when major announcments are made...and the average investor doesn't even have the option to buy. So HFT is smaller potatos to me.

But as with Vegas casinos...you must make sure that HFT gains are heavily taxed relative to someone slaving over a fryer.

The casino analogy is better, but it's a casino we're all stuck in whether we want to be or not. Even if you put all your money in your mattress, your job, your home value and everything else is at risk in the casino, and the guys who own the House get rich when they win and socialize the pain when they lose.

 

[ScoobyDoo]

Re: Obama XXII: Occupy the White House

Even if you put all your money in your mattress, your job, your home value and everything else is at risk in the casino, and the guys who own the House get rich when they win and socialize the pain when they lose.

This. Well stated.

 

[5mn_Major]

Re: Obama XXII: Occupy the White House

The casino analogy is better, but it's a casino we're all stuck in whether we want to be or not. Even if you put all your money in your mattress, your job, your home value and everything else is at risk in the casino, and the guys who own the House get rich when they win and socialize the pain when they lose.

From what I understand, HFT does not change valuations...but rather the speed at which which valuations change. So if Apple has bad earnings, then HFTers would pounce and take advantage of the news. In the end, Apples price would get where it should be and the existence of HFT doesn't change that fact. But if you're competing with these guys for speed to trade youre at a disadvantage. The same holds for any small business vs. its larger competitors.

If on the other hand, a HFTer is selling on the downtick and is shaving dollars off all trading that's less good. But that's a cost to day trading...and day traders are similar kinds of 'vultures' who try to compete in the stock market the same way, try to make the easy money and make the market more volatile. So long term investors lose next to nothing that I know of from this...again, unless I'm missing something.

'sides tax 'em all!

 

[Kepler]

Re: Obama XXII: Occupy the White House

My favorite curmudgeon, John J. Reilly, explains how the current left and the current right are two sides of the same coin, minted recently.

Every age has its weird aspects of obtuseness (Reilly has his too, and they will not be unfamiliar to the similarly indoctrinated), but I find it comforting that the Shriekers on both sides are just singing counterpoint from the same sheet of music -- a song people 200 years ago, and 200 years in the future, would/will find completely empty of meaning.

 

[Handyman]

Re: Obama XXII: Occupy the White House

I don't agree at all -- this is like saying we don't need an FDA because the market will police its own food safety standards to protect its brand. If 2008 taught us anything it's that the market isn't magical or all-knowing, or even particularly clever -- and it won't curtail its own profit center.

The market will police itself? Has Lynah been living under a rock the last decade or so?

 

[Old Pio]

Re: Obama XXII: Occupy the White House

Good article.

Is there anybody out there that's going to try to defend high frequency trading? Is this one of those things where the perps try their best to keep it out of the news, because as soon as it becomes known the gig is up?

As the repeatedly self-proclaimed "intellechual" around here, I should think you'd know the spelling is "jig," not "gig."

 

[LynahFan]

Re: Obama XXII: Occupy the White House

That's what a regulation is -- statutory infringement on a freedom because it has adverse consequences for the general well-being. Porn's not a good analogy either, because the issue at hand there is freedom of speech and freedom of the press -- explicitly Constitutionally protected freedoms.

Well, we may just disagree, but I happen think the right to buy and sell property at a time you choose (even if it's just milliseconds after you bought it) is also a pretty fundamental right. Obviously not quite at the level of something in amendment #1, but definitely right up there.

I don't agree at all -- this is like saying we don't need an FDA because the market will police its own food safety standards to protect its brand. If 2008 taught us anything it's that the market isn't magical or all-knowing, or even particularly clever -- and it won't curtail its own profit center.

I don't think it's quite the same thing. In the case of the FDA, it is regulating many drug manufacturers who compete within the drug Market (capital M). None of the individual players really have an interest in making sure that the Market is fair - they are all equal players, and there is no other "referee" other than the regulations of the federal government, so if they can get away with cheating, so much the better for them. In the case of a stock exchange, it is a company whose product IS a market (small m), and they absolutely do have a vested interest in making their market (at least appear) fair to all of the players. If the 1% of traders who do HFT were destabilizing the market or somehow screwing the other 99% of traders, the NYSE would have *plenty* of incentive to step in and squash it. Their whole business model is to be perceived as a fair referee who oversees the trading of the players within their market (small m) - if investors sense that they are not living up to this role, the NYSE would be out of business in a hurry.

 

[WetSubArticCanine]

Re: Obama XXII: Occupy the White House

Well, I seem to be one of the more vocal pro-market voices on here ....

You seem to equate “pro-market” with ignoring market failures. Yes, you’re clear that your attempt at an EFT defense is intellectual exercise on your part, but that seems to tie back to my first sentence, and the wrapped around the axle insistence of many that XXX isn’t a bug, but a feature.

My take is the basic idea of markets is robust, but that the grand principal is not sufficient. Krugman’s long piece on saltwater v freshwater economics - that the system is not all rational, rings true. What seems more rational is dealing with the irrationalities, where evident, justified by Kep’s identification of all the skin that’s actually standing around as the ball circles the spinning wheel. Though your post here is at least past “why do you hate markets” and attempts to tie-in the value of reputation, that quite serviceable idea based on integrity - so evident among the founders, has been superseded by the advertisers.

Where I have a corundum is how to deal with advertising, with a method of separating the need for a better mouse trap to be known widely, from just spinning the mice. BS talks and a fact walks.

My favorite curmudgeon ...

Interesting link. Also interesting, that you’d reveal the location of a metaphor mine.

 

[Kepler]

Re: Obama XXII: Occupy the White House

Well, we may just disagree, but I happen think the right to buy and sell property at a time you choose (even if it's just milliseconds after you bought it) is also a pretty fundamental right.

I don't. There are law books filled with restrictions on property transactions. There's nothing in first amendment law even remotely comparable to, say, anti-monopolistic laws.

I agree with you that in recent years our society has been warped in favor of large property ownership to the detriment of everybody else, but that's just one of those blind alleys we go down from time to time. It will correct eventually, because there is no way to keep a free society in a state where a tiny, entitled minority controls everything. Either the freedom of society will change and we'll become a de jure plutocracy, or another wave of trust-busting will leave the Masters of the Universe crying into their champagne about TEHSOCIALISM!!!1!

I vote for the latter. I'm not marching for it yet. But a lot of people are, and if I were a trust fund kid I would be getting a little worried.

The problem with Wall Street right now is the alien face-sucker problem -- we're afraid to pry it off because it's got its tail wrapped around our windpipe. But that won't last forever. Eventually there be a point where 50% of the population + 1 will realize it is in their and the country's interests to blow them out the airlock and incinerate them.

That will not be a bad day.