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It's not analogous, much of the buying and selling in finance is done for the purpose of the price discovery process, which is to society's benefit, and for whi

It's not analogous, much of the buying and selling in finance is done for the purpose of the price discovery process, which is to society's benefit, and for which a carmaker analogy doesn't work at all. See any book on market microstructure. If you ignore the price discovery process completely, then, sure, markets become kind of pointless, but that's beside the point. It's not quite like the usual thing of buying or selling a car.

pyromine 10y ago
Not the person you were replying to, but I'm greatly interest in learning more regarding to market microstructure. Have any books you'd recommend?
- conistonwater 10y ago
  Trading and Exchanges: Market Microstructure for Practitioners. On the lighter side there is https://en.wikipedia.org/wiki/Reminiscences_of_a_Stock_Operator https://en.wikipedia.org/wiki/Reminiscences_of_a_Stock_Opera... (especially good is its discussion of bucket shops—many swindles that exist today existed back then too). Also, look through Matt Levine's blog to see if he recommends anything. There are also other suggestions here: https://news.ycombinator.com/item?id=1447438 https://news.ycombinator.com/item?id=1447438 I'd second tptacek's recommendations in that thread, including Shiller's Yale course (it's on youtube).
paganel 10y ago
> much of the buying and selling in finance is done for the purpose of the price discovery process, which is to society's benefit, I'm pretty sure that "most of the buying and selling in finance" happens for making a profit for said buyers and sellers (not that's anything wrong with that), the associated higher liquidity which presumably helps with "price discovery" is only a side-effect. Assuming a transaction tax actually gets implemented prices would still be "discovered" (they've been discovered just fine since we first started trading using shells and the like thousands of years ago), only that the spread would be higher and the liquidity would be lower.

pyromine 10y ago

Not the person you were replying to, but I'm greatly interest in learning more regarding to market microstructure. Have any books you'd recommend?

conistonwater 10y ago
Trading and Exchanges: Market Microstructure for Practitioners. On the lighter side there is https://en.wikipedia.org/wiki/Reminiscences_of_a_Stock_Operator https://en.wikipedia.org/wiki/Reminiscences_of_a_Stock_Opera... (especially good is its discussion of bucket shops—many swindles that exist today existed back then too). Also, look through Matt Levine's blog to see if he recommends anything. There are also other suggestions here: https://news.ycombinator.com/item?id=1447438 https://news.ycombinator.com/item?id=1447438 I'd second tptacek's recommendations in that thread, including Shiller's Yale course (it's on youtube).

paganel 10y ago

> much of the buying and selling in finance is done for the purpose of the price discovery process, which is to society's benefit, I'm pretty sure that "most of the buying and selling in finance" happens for making a profit for said buyers and sellers (not that's anything wrong with that), the associated higher liquidity which presumably helps with "price discovery" is only a side-effect. Assuming a transaction tax actually gets implemented prices would still be "discovered" (they've been discovered just fine since we first started trading using shells and the like thousands of years ago), only that the spread would be higher and the liquidity would be lower.