5 ms·

Which would you say is more morally problematic, HFT or figuring out ways of making people click ads?

pouta 6y ago
Ads, 110%
ScottFree 6y ago
The entire financial sector. It captures 30% of all corporate profits in the world economy. Ads are bad, but not "take 1/3 of what other people make" bad.
- 3fe9a03ccd14ca5 6y ago
  You’d figure bank stocks would be performing better, considering they’re capturing so much purported profits.
  - ScottFree 6y ago
    fair enough. Updated to specify the entire financial sector, not just banks.
  - logfromblammo 6y ago
    Capturing other companies' profits is just step 1 in the plan to put as much of that money in your own pockets as possible. If you're willing to "steal" from other companies, why wouldn't you also "steal" from the owners of your own company? Why pay a dividend when you can pay bonuses?
  - parenthesis 6y ago
    In many listed financial companies it is certain employees and management who do well financially, rather than the shareholders.
    - sweeneyrod 6y ago
      As Matt Levine puts it, investment banks are kind of like socialist collectives run for the benefits of their workers.
- ploika 6y ago
  You're under absolutely no obligation to like it, but banks do provide essential services for a fee. They're also (belatedly and sometimes decreasingly) heavily regulated in most of the world. What they do isn't always rent-seeking.
  - anthony_doan 6y ago
    > but banks do provide essential services for a fee. They charge you for not having enough money in your checking account, while using your money to give out loans and make money off of that. Basically charging you for being poor while making money off of your by fee and loaning your money to other people. I'm old enough to remember they never charge a fee for not having enough money in the bank account. I left my bank for a credit union. Also Well Fargo was caught recently in a dubious sketchy scheme.
    - ipnon 6y ago
      Please note these activities are unrelated to high frequency trading.
      - anthony_doan 6y ago
        HFT isn't essential services.
        thedufer 6y ago
        NYC seems to disagree (at least some market makers are currently considered essential businesses).
    - derision 6y ago
      Not all banks do that
      - nnoitra 6y ago
        Most do. Interest rates are how those that have take from those that don't legally. Banks are just the executors of the idea. It's a very complex systematic problem. I'm not saying burn all banks let's move to the jungle and eat coconuts.
- gowld 6y ago
  App store takes 30% of revenue before you even start advertising..
  - ScottFree 6y ago
    The App store's main source of revenue isn't advertising, it's acting as a marketplace for apps. It also doesn't capture 30% of the entire economy that it operates in.
fnord123 6y ago
The surveillance economy is far worse than finance.
zarkov99 6y ago
For sure the Ad economy is worse. HFT has a small impact on the economy and 0 on culture while the ad model destroyed respectable media and is well on its way to destroying the web, not to mention doing immeasurable harm to social cohesion. But hey, better to rag against the greedy bankers than the people signing your paycheck. Don't Be Evil!
mariodiana 6y ago
If I may proffer an opinion, HFT is more morally problematic. It's basically eavesdropping or civilian wiretapping, only done at scale and with the leverage of millions of dollars. How could "making people click ads" be worse?
- pgwhalen 6y ago
  >It's basically eavesdropping or civilian wiretapping, only done at scale and with the leverage of millions of dollars I don't think anyone on hacker news would bat an eye if your comment said "Ads are problematic" before this sentence. It's also unclear to how HFTs are eavesdropping on anyone, they use publicly available (for a price) data.
  - mariodiana 6y ago
    HFT capitalizes on a kind of time arbitrage. They take the data from one market, and then transport that data using specialized, custom built networks that move the data from one place to another a tiny fraction of a second quicker than other networks. They then capitalize on having that data earlier to eek out small profits at scale. Imagine two investors sitting at a restaurant table discussing trades they are about to make. The trades they are making will be significant, in the sense that their trades will then impact the value of the stocks they're trading. Meanwhile, a waiter at the restaurant makes a habit of eavesdropping on the conversations of these investors. When he gets the information, he runs to the phone and effects his own, smaller trade. It's not that the waiter happened to overhear something. The waiter makes it his business to "overhear." The waiter adds no real value. He's a parasite on the people who do add value. The HFT traders are likewise. What they do is documented in Michael Lewis's Flashboys. https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393351599/ https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393...
    - pgwhalen 6y ago
      I work in the industry, have read Flash Boys, and am aware of how misleading and occasionally false the book is. It's always disheartening to see someone be so sure of themselves while also being incorrect. Your metaphor is inaccurate. Your metaphor describes actual front running, which is indeed illegal. It does not describe the sort of latency arbitrage that HFTs do, which Michael Lewis has unfortunately also dubbed "front running" (and succeeded at changing the lay population's definition of the term). I would try to adjust your metaphor to be correct but it isn't really possible. There is no eavesdropping. HFTs do not know anything about trades before they happen. If they see a large trade, they adjust their prices after the trade happens (possibly on another exchange). This isn't eavesdropping, they are operating on public information, just very quickly. It's the foundation of all market making: adjusting prices according to order flow.
sdwedq 6y ago
In another life, I worked for small webdev/marketing consultancy. Their clients were multilayer marketing firms, subscription services startup and other startups. The company was run by car salesperson types. And their clients were even more sleazy. One of the popular joke they repeated with clients was that everyone is unhappy, and if they are not, then they haven't seen the right ad. It was pretty amazing to see "startup" founders come in and say they want to make the world a better place. Then say they need to target stupid people because they spend the most money. Or only an idiot would buy their crap but there are a lot of idiots. A lot of subscription services are started by rich stay at home spouses. Many of them didn't even really care about about making money but just wanted it as a status symbol and a way to get their pictures appear in their friend's feed. It was funny how wanted to make sure their friends saw their ad, even though they knew their friends will never buy whatever. After working there for a year, I decided I will never deal with anything remotely related to adtech. Professionally, I am not yet fully removed from adtech. Stuff I work on now is indirectly used by adtech companies. But I used to spend a lot of time making websites monetized with AdWords. Now I do algotrading as a hobby and feel a lot better about it. There are no false pretenses. It is just about making money. Honest, pure, simple. And it is challenging. So I would say ads are definitely a lot worse.

Ads, 110%

The entire financial sector. It captures 30% of all corporate profits in the world economy. Ads are bad, but not "take 1/3 of what other people make" bad.

3fe9a03ccd14ca5 6y ago
You’d figure bank stocks would be performing better, considering they’re capturing so much purported profits.
- ScottFree 6y ago
  fair enough. Updated to specify the entire financial sector, not just banks.
- logfromblammo 6y ago
  Capturing other companies' profits is just step 1 in the plan to put as much of that money in your own pockets as possible. If you're willing to "steal" from other companies, why wouldn't you also "steal" from the owners of your own company? Why pay a dividend when you can pay bonuses?
- parenthesis 6y ago
  In many listed financial companies it is certain employees and management who do well financially, rather than the shareholders.
  - sweeneyrod 6y ago
    As Matt Levine puts it, investment banks are kind of like socialist collectives run for the benefits of their workers.
ploika 6y ago
You're under absolutely no obligation to like it, but banks do provide essential services for a fee. They're also (belatedly and sometimes decreasingly) heavily regulated in most of the world. What they do isn't always rent-seeking.
- anthony_doan 6y ago
  > but banks do provide essential services for a fee. They charge you for not having enough money in your checking account, while using your money to give out loans and make money off of that. Basically charging you for being poor while making money off of your by fee and loaning your money to other people. I'm old enough to remember they never charge a fee for not having enough money in the bank account. I left my bank for a credit union. Also Well Fargo was caught recently in a dubious sketchy scheme.
  - ipnon 6y ago
    Please note these activities are unrelated to high frequency trading.
    - anthony_doan 6y ago
      HFT isn't essential services.
      - thedufer 6y ago
        NYC seems to disagree (at least some market makers are currently considered essential businesses).
  - derision 6y ago
    Not all banks do that
    - nnoitra 6y ago
      Most do. Interest rates are how those that have take from those that don't legally. Banks are just the executors of the idea. It's a very complex systematic problem. I'm not saying burn all banks let's move to the jungle and eat coconuts.
gowld 6y ago
App store takes 30% of revenue before you even start advertising..
- ScottFree 6y ago
  The App store's main source of revenue isn't advertising, it's acting as a marketplace for apps. It also doesn't capture 30% of the entire economy that it operates in.

fnord123 6y ago

The surveillance economy is far worse than finance.

zarkov99 6y ago

For sure the Ad economy is worse. HFT has a small impact on the economy and 0 on culture while the ad model destroyed respectable media and is well on its way to destroying the web, not to mention doing immeasurable harm to social cohesion. But hey, better to rag against the greedy bankers than the people signing your paycheck. Don't Be Evil!

mariodiana 6y ago

If I may proffer an opinion, HFT is more morally problematic. It's basically eavesdropping or civilian wiretapping, only done at scale and with the leverage of millions of dollars. How could "making people click ads" be worse?

pgwhalen 6y ago
>It's basically eavesdropping or civilian wiretapping, only done at scale and with the leverage of millions of dollars I don't think anyone on hacker news would bat an eye if your comment said "Ads are problematic" before this sentence. It's also unclear to how HFTs are eavesdropping on anyone, they use publicly available (for a price) data.
- mariodiana 6y ago
  HFT capitalizes on a kind of time arbitrage. They take the data from one market, and then transport that data using specialized, custom built networks that move the data from one place to another a tiny fraction of a second quicker than other networks. They then capitalize on having that data earlier to eek out small profits at scale. Imagine two investors sitting at a restaurant table discussing trades they are about to make. The trades they are making will be significant, in the sense that their trades will then impact the value of the stocks they're trading. Meanwhile, a waiter at the restaurant makes a habit of eavesdropping on the conversations of these investors. When he gets the information, he runs to the phone and effects his own, smaller trade. It's not that the waiter happened to overhear something. The waiter makes it his business to "overhear." The waiter adds no real value. He's a parasite on the people who do add value. The HFT traders are likewise. What they do is documented in Michael Lewis's Flashboys. https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393351599/ https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393...
  - pgwhalen 6y ago
    I work in the industry, have read Flash Boys, and am aware of how misleading and occasionally false the book is. It's always disheartening to see someone be so sure of themselves while also being incorrect. Your metaphor is inaccurate. Your metaphor describes actual front running, which is indeed illegal. It does not describe the sort of latency arbitrage that HFTs do, which Michael Lewis has unfortunately also dubbed "front running" (and succeeded at changing the lay population's definition of the term). I would try to adjust your metaphor to be correct but it isn't really possible. There is no eavesdropping. HFTs do not know anything about trades before they happen. If they see a large trade, they adjust their prices after the trade happens (possibly on another exchange). This isn't eavesdropping, they are operating on public information, just very quickly. It's the foundation of all market making: adjusting prices according to order flow.

sdwedq 6y ago

In another life, I worked for small webdev/marketing consultancy. Their clients were multilayer marketing firms, subscription services startup and other startups. The company was run by car salesperson types. And their clients were even more sleazy. One of the popular joke they repeated with clients was that everyone is unhappy, and if they are not, then they haven't seen the right ad. It was pretty amazing to see "startup" founders come in and say they want to make the world a better place. Then say they need to target stupid people because they spend the most money. Or only an idiot would buy their crap but there are a lot of idiots. A lot of subscription services are started by rich stay at home spouses. Many of them didn't even really care about about making money but just wanted it as a status symbol and a way to get their pictures appear in their friend's feed. It was funny how wanted to make sure their friends saw their ad, even though they knew their friends will never buy whatever. After working there for a year, I decided I will never deal with anything remotely related to adtech. Professionally, I am not yet fully removed from adtech. Stuff I work on now is indirectly used by adtech companies. But I used to spend a lot of time making websites monetized with AdWords. Now I do algotrading as a hobby and feel a lot better about it. There are no false pretenses. It is just about making money. Honest, pure, simple. And it is challenging. So I would say ads are definitely a lot worse.