Quote from sanjay_arora:
Jack:
So you are saying that an operator "way past integrity" (damn...I like that phrase!), but operating effectively, using larger resources than majority of the market, should be allowed to dictate/corner the market, as legilators will always be lagging.
whether they should be allowed or not is moot. "All is fair in love and war" is a truism that replaces integrity , more, and ethics. Money has such high utilty, that people in the financial industry go about doing anything they want even while knowing the consequences to others.
Today the legislation and regulation is several cycles behind the eight ball. As a consequence a long term Depression was created.
I have immunity regarding the workings of markets, and governments since I can operate on a different plane. Market behavior is NOT a function of integrity and having a responsible rule set in place for participants.
Integrity is not incentivised. Lack of integrity is the norm for the major participants in the financial industry. The financial industry is based on fees and commissions and the absense of detailed fine print, thank goodness.
You are saying until such an operator's efficiency breaks (as newer such goons will be bringing in more efficient methods), the market has no better option than letting him continue!
It is a great deal of fun watching the big participants deal with capital and the persuasion that goes along with it. It must be a fact that the best trained Ivy Leaguers participated in all of the mortgage industry's machinations. It is clear that they knew what they were doing to exact what they did form the unwary. Now, their clients get the consequences in due time. The instruments created used markets to operate. The CW mindset seems to revolve around anomolies and large data processing fast computers.
Mark to market is based upon non frozen liquid markets.
In the mortgage industry it is not possible to process existing paper anymore. The mortgage industry works on a "positive" NOT inverse, feedback loop. A snowball is perched on a ridge. It will be pushed off the ridge one way or another. Econometrically, there is no substitution effect possible.[green]
Its the new Wild West....isn't it...in such a case ;-)
the Wild west, in my opinion was based on the truism "possassion is 9/10th of the Law". there was no Law and control was the essential ingredient. Today there are not approapriate Laws and subsequent regulations, that is true. AND there is no real control either. Corporate boards prove the lack of control by their allowing integrity to disappear.
In the Wild West, water and land were controlled and the RR's were built and they brought layers of comerce and business and industry. The dust settled as regulations allowed integrity to reign in a business and industrial revolution. Value was constantly added.
The financial gangs today are just creating problems and more layers of problems. It is a dishonest and fatal structure with a postivie feedback loop instead of a moderating feedback system. It is an information based econometric contest. the value added has become asymptotic to a horizontal line @ zero value.
I understand that technological jumps are what are causative of such operations, but does that mean that legislation or market regulaters (include major market participants like exchanges collectively) should twiddle their thumbs?
The structural aspects of two major systems operating with no common denominaator has no basic solution. Sullivan describes technological improvement processes. The legislative and regulatory process is much longer per cycle. As you see "compression" is not on the table. Replacing players is what the legislative and regulatory process does. Control is done with money flowing from information technology to politicians. That will not change.
As an aside, look at how war isn't working for those who fight terrorists. The origin of terrorism is related to being deprived econometrically. In the Wild West, examine who were the terrorists: Native Americans, fences (ranchers against farmers), claim jumpers. Where I live, to this day on the range, if you do not want cattle on your property, you better fence them out.
It would be analogous to customs guys not running after dope runners, if they have a faster speed boat!
Arizona is a fun place. It is thought that the main wharehousing of dope is done in Tucson or Phoenix. Our former governor runs Homeland Security today. for some reason there is a lot of thought that drug running can be fought with technology. LOL
What would happen if all drugs were made legal? Changing the problem set is often a means of progress. Not doing war but replacing it with economic outreach would be a lot cheaper in terms of real costs. Mortgages will probaly turn out okay if we just go through 10 years of Depression. Human behavior re debt is following the lead of the lack of integrity of the financial industry as measured by a family of event oriented (forclosure)curves that cover each year from 2000 onward. Integrity leaving society is becoming quite well understood.
But yes....essentially...it IS the wild west ;-)
Fighting the HFT algos... daytraders and floor traders vs. HFT traders
- Thread starter candletrader
- Start date
Jack:
Thanks....you have given me an alternate viewpoint...and frankly, I find that I have nothing more to say....or to put forward...
...off with integrity and rose colored glasses....or not? well its a moral issue, maybe not a real one...
Ciao!
Sanjay.
Thanks....you have given me an alternate viewpoint...and frankly, I find that I have nothing more to say....or to put forward...
...off with integrity and rose colored glasses....or not? well its a moral issue, maybe not a real one...
Ciao!
Sanjay.
While it makes sense to ban some of the anti-social actions of HFT like "quote stuffing" I see no reason why day traders have more of an inherent right to make money in the markets than high frequency traders do. Day traders "waging war" on HFT are like blacksmiths whining that the automobile is eating their lunch. The "solutions" offered by our politicians, such as a transaction tax, will wipe out day traders, high frequency traders, and scalpers alike. The only ones left standing will be the buy and holders, and even they will have their returns lowered slightly due both to the tax itself and the reduction in liquidity.
Trade the foreign equity markets it's like the good old days over there. Technology hasn't caught up over there and in some markets trading seems like the mid 90s so if you want to go back in time change your alarm clocks. But in another decade or so even these markets will be very efficient.
i trade through coastal and they just got foreign access to lse nikkei, ftse, bovspa, couple third world markets as well but to do this you have to trade through sterlings front end. right now i trade through lightspeed with coastal and i know lightspeed has no connectivity to these markets or atleast not yet.
Anyone (not institutional) trading in India as yet?
1) "free markets" are not free. Free markets inevitably result in the concentration of wealth in the hands of a priviledged minority.
2) "free markets" are anti-democratic. The notion that democracy and unrestrained commerce are necessarily linked or even compatible is naive.
3) The new aristocracy wil be defined by access to benefits of the most advanced/expensive technology.
The line has to drawn somewhere. By banning HFT the gov't can at least make a gesture to fair play and equality of persons. Money is power. Surely you can see how your version of fairness in the markets will lead to the absolute ascendency of the corporate elite and the annihilation of democracy in the so-called 'free world'.
Also, let's consider what the phrase "make a living" means in a sensible context. Goldman Sachs isn't interested in 'making a living'; they want to rule the f-ing world.