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Securities deregulation. On the one hand, investors deserve protections. On the other, has the regulation gone too far by design, locking out the middle class i

by ENGNR 8y ago

Securities deregulation. On the one hand, investors deserve protections. On the other, has the regulation gone too far by design, locking out the middle class it used to serve so well. Why do companies wait until most of the value is already realized before they IPO these days Crypto could be Uber for securities, ignoring the regulator and using technology to self regulate, or by operating out of countries with lighter regulation

empath75 8y ago
This is one of the most naive, starry-eyed posts I’ve ever seen here. If you deregulate securities you’re just going to see a whole bunch of senior citizens fleeced by high tech boiler rooms.
- ENGNR 8y ago
  Geez sorry for outlining both sides of an argument in response to a question, hivemind downvotes are strong today
  - DonHopkins 8y ago
    It's ironic how the crowds of pro-crypto-currency shills so predictably whine and throw around the word "hivemind" in response to thinking people reacting rationally in response to their mindless greedy knee-jerk decentralized marketing of fraudulent pump-and-dump schemes.
    - ENGNR 8y ago
      I don't even own any ICO tokens let alone shill them : D The emotional response here is fantastic, it reminds me of this essay http://www.paulgraham.com/say.html http://www.paulgraham.com/say.html
zackmorris 8y ago
This is a fallacy. Generally regulations tend to protect consumers or vulnerable groups from harm. The recent global trend towards deregulation and austerity moves in the opposite direction of social democratic movements in Germany, Scandinavian countries and much of the EU. The end result being more of a wild west free for all that results in something more like the Gilded Age of the 19th century than a well-optimized free market like imagined on the Jetsons. That said, there are certainly cases where financial market regulations have hurt the middle class. For example, a pattern day trader rule was imposed in February 2001 which required a $25,000 minimum balance to trade on margin: http://www.finra.org/investors/day-trading-margin-requirements-know-rules http://www.finra.org/investors/day-trading-margin-requiremen... More about trading on margin (in the most basic sense - potentially doubling your gains but wiping you out if your total stock holdings equal what you borrowed, triggering a margin call): https://www.investopedia.com/university/margin/ https://www.investopedia.com/university/margin/ The pattern day trader rule was introduced after the dot bomb with several stated goals like protecting inexperienced investors or limiting volatility. But it was really yet another tactic to keep the most lucrative forms of trading in the hands of wealthy/institutional investors and leave the masses in the slow lane of trading with their own money. It's extremely important to know the nuances of regulations and their unintended consequences. But instead we only generally hear about deregulation from politicians, because they know that insiders (their base and lobbyists) will always win over the masses in a fully deregulated economy. P.S. I didn't downvote you, because the sentiment you expressed is widespread and needs to be addressed
- vkou 8y ago
  > But it was really yet another tactic to keep the most lucrative forms of trading in the hands of wealthy/institutional investors and leave the masses in the slow lane of trading with their own money. Accounted for risk, the most lucrative form of trading is buying a Vanguard index fund, and sitting on it for 30 years. Discounting risk, the most lucrative form of trading is flying to Vegas, and putting all your money on red.
- fru2013 8y ago
  >For example, a pattern day trader rule was imposed in February 2001 which required a $25,000 minimum balance to trade on margin. Technically, Accounts with less than $25k can trade on margin, they just can't make four or more day-trade in a five day period.
- airstrike 8y ago
  > But it was really yet another tactic to keep the most lucrative forms of trading in the hands of wealthy/institutional investors and leave the masses in the slow lane of trading with their own money. This is entirely subjective and it actually also happens to be wrong.
  - zackmorris 8y ago
    That's the great thing about subjectivity, I could say the same thing about your comment unless you have proof that no day traders were negatively affected. BTW I got interested in this sort of thing after this law blocked the start of my day trading career :-P
    - airstrike 8y ago
      You're the one making the wild claim without proof, so our comments are not the same. The burden of proof is on you. I don't have to prove that day traders weren't negatively affected. In fact, even if one of us proved they were affected, this wouldn't support the argument that the intention of the bill was "to keep the most lucrative forms of trading in the hands of wealthy". That's just unsubstantiated hot air. Most importantly, you haven't even proven that day trading is "the most lucrative" form of trading and that's probably an even wilder claim! While the burden of proof is on you again, I can already think of two reasons why it is incorrect: (1) day trading incurs in significant transaction costs due to the frequency of the trades and (2) though you may get outsized results on a given trade if your gamble pays off, it's just speculation so it will never beat the market on a risk-adjusted basis. Unless you're a hedge fund with significant resources to take on huge positions and minimize transaction costs, there is really no easy alpha left in the market. Everything's already priced in these days.
airstrike 8y ago
> Securities deregulation. Do you know anything at all about the year 1929?

by ENGNR 8y ago

empath75 8y ago

This is one of the most naive, starry-eyed posts I’ve ever seen here. If you deregulate securities you’re just going to see a whole bunch of senior citizens fleeced by high tech boiler rooms.

ENGNR 8y ago
Geez sorry for outlining both sides of an argument in response to a question, hivemind downvotes are strong today
- DonHopkins 8y ago
  It's ironic how the crowds of pro-crypto-currency shills so predictably whine and throw around the word "hivemind" in response to thinking people reacting rationally in response to their mindless greedy knee-jerk decentralized marketing of fraudulent pump-and-dump schemes.
  - ENGNR 8y ago
    I don't even own any ICO tokens let alone shill them : D The emotional response here is fantastic, it reminds me of this essay http://www.paulgraham.com/say.html http://www.paulgraham.com/say.html

zackmorris 8y ago

This is a fallacy. Generally regulations tend to protect consumers or vulnerable groups from harm. The recent global trend towards deregulation and austerity moves in the opposite direction of social democratic movements in Germany, Scandinavian countries and much of the EU. The end result being more of a wild west free for all that results in something more like the Gilded Age of the 19th century than a well-optimized free market like imagined on the Jetsons. That said, there are certainly cases where financial market regulations have hurt the middle class. For example, a pattern day trader rule was imposed in February 2001 which required a $25,000 minimum balance to trade on margin: http://www.finra.org/investors/day-trading-margin-requirements-know-rules http://www.finra.org/investors/day-trading-margin-requiremen... More about trading on margin (in the most basic sense - potentially doubling your gains but wiping you out if your total stock holdings equal what you borrowed, triggering a margin call): https://www.investopedia.com/university/margin/ https://www.investopedia.com/university/margin/ The pattern day trader rule was introduced after the dot bomb with several stated goals like protecting inexperienced investors or limiting volatility. But it was really yet another tactic to keep the most lucrative forms of trading in the hands of wealthy/institutional investors and leave the masses in the slow lane of trading with their own money. It's extremely important to know the nuances of regulations and their unintended consequences. But instead we only generally hear about deregulation from politicians, because they know that insiders (their base and lobbyists) will always win over the masses in a fully deregulated economy. P.S. I didn't downvote you, because the sentiment you expressed is widespread and needs to be addressed

vkou 8y ago
> But it was really yet another tactic to keep the most lucrative forms of trading in the hands of wealthy/institutional investors and leave the masses in the slow lane of trading with their own money. Accounted for risk, the most lucrative form of trading is buying a Vanguard index fund, and sitting on it for 30 years. Discounting risk, the most lucrative form of trading is flying to Vegas, and putting all your money on red.
fru2013 8y ago
>For example, a pattern day trader rule was imposed in February 2001 which required a $25,000 minimum balance to trade on margin. Technically, Accounts with less than $25k can trade on margin, they just can't make four or more day-trade in a five day period.
airstrike 8y ago
> But it was really yet another tactic to keep the most lucrative forms of trading in the hands of wealthy/institutional investors and leave the masses in the slow lane of trading with their own money. This is entirely subjective and it actually also happens to be wrong.
- zackmorris 8y ago
  That's the great thing about subjectivity, I could say the same thing about your comment unless you have proof that no day traders were negatively affected. BTW I got interested in this sort of thing after this law blocked the start of my day trading career :-P
  - airstrike 8y ago
    You're the one making the wild claim without proof, so our comments are not the same. The burden of proof is on you. I don't have to prove that day traders weren't negatively affected. In fact, even if one of us proved they were affected, this wouldn't support the argument that the intention of the bill was "to keep the most lucrative forms of trading in the hands of wealthy". That's just unsubstantiated hot air. Most importantly, you haven't even proven that day trading is "the most lucrative" form of trading and that's probably an even wilder claim! While the burden of proof is on you again, I can already think of two reasons why it is incorrect: (1) day trading incurs in significant transaction costs due to the frequency of the trades and (2) though you may get outsized results on a given trade if your gamble pays off, it's just speculation so it will never beat the market on a risk-adjusted basis. Unless you're a hedge fund with significant resources to take on huge positions and minimize transaction costs, there is really no easy alpha left in the market. Everything's already priced in these days.

airstrike 8y ago

> Securities deregulation. Do you know anything at all about the year 1929?