Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Economy
In reply to the discussion: STOCK MARKET WATCH -- Friday, 18 April 2014 [View all]xchrom
(108,903 posts)20. Michael Lewis is right: Our trading system is broken
http://www.salon.com/2014/04/17/can_michael_lewis_save_our_broken_trading_system_partner/
If you read one business book this year, make it Flash Boys by Michael Lewis. The journalist famous for Moneyball and The Big Short takes readers inside the parasitic world of high-frequency trading that is harming the broader economy.
The technical architecture of high-frequency trading is right out of a sci-fi movie: The schemes rely on algorithms that seem artificially intelligent, and the velocity of transaction signals approach light speed. As Lewis recounts, all that technological wizardry is marshaled to let insiders know information before everyone else, which consequently lets those insiders extract wealth from the market.
The good news is that a financial transaction tax can at once raise public resources and disincentivize the most predatory schemes. The even better news is that structural changes in the industry have made such a tax more economically viable than ever.
Before getting to that change, consider the basics of the tax proposal. The idea is that if a tiny fee is slapped on securities transactions say, a cent the tax will barely affect the average investor but will force high-frequency, high-volume traders to pay a lot. Consequently, those predators might see less of an upside from or even abandon their market-rigging schemes. And if they dont, then at least the government will generate new resources to enforce laws protecting average investors.
If you read one business book this year, make it Flash Boys by Michael Lewis. The journalist famous for Moneyball and The Big Short takes readers inside the parasitic world of high-frequency trading that is harming the broader economy.
The technical architecture of high-frequency trading is right out of a sci-fi movie: The schemes rely on algorithms that seem artificially intelligent, and the velocity of transaction signals approach light speed. As Lewis recounts, all that technological wizardry is marshaled to let insiders know information before everyone else, which consequently lets those insiders extract wealth from the market.
The good news is that a financial transaction tax can at once raise public resources and disincentivize the most predatory schemes. The even better news is that structural changes in the industry have made such a tax more economically viable than ever.
Before getting to that change, consider the basics of the tax proposal. The idea is that if a tiny fee is slapped on securities transactions say, a cent the tax will barely affect the average investor but will force high-frequency, high-volume traders to pay a lot. Consequently, those predators might see less of an upside from or even abandon their market-rigging schemes. And if they dont, then at least the government will generate new resources to enforce laws protecting average investors.
Edit history
Please sign in to view edit histories.
41 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
RecommendedHighlight replies with 5 or more recommendations
Snowden scoffs Putin: I questioned the Russian president live on TV to get his answer on the record,
Demeter
Apr 2014
#36
The Hedge Fund Managers Tax Break: Because Wall Streeters Want Your Money DEAN BAKER
Demeter
Apr 2014
#13
If you want a Wealth Effect, you have to be increasing the NUMBER of the Wealthy
Demeter
Apr 2014
#37