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Oh really. "Vitriol" in the rose-shaded eye of the beholder aside, methinks absent the WSJ pom-poms we will agree that a much more fundamental reason that peop
by logjam 15y ago
Oh really.
"Vitriol" in the rose-shaded eye of the beholder aside, methinks absent the WSJ pom-poms we will agree that a much more fundamental reason that people trade is: to make money without having to worry about consequences; and that particularly in light of events over the last decade, the fact that highly-interdependent, dubiously competitive "markets" have sprouted in many sectors means that the costs of mistakes, incompetence, fraud, theft, etc is transferred to you every time you sit on an airplane, go to the gas pump, buy orange juice, blah blah.
As such, one supposes that dependence on many of those markets indeed resulted, as you say, in something other than zero-sum in terms of utility - they resulted in huge losses for some and huge inefficiencies resulting from unquestioning confidence in the supposed "efficiency" and beneficence of "markets".
http://en.wikipedia.org/wiki/Externality http://en.wikipedia.org/wiki/Externality
- vecter 15y agoI will absolutely agree that traders want money. I may not be motivated by societal welfare, but it's naive to think most people are. Founders start companies because they want to hit it big. Sure, they do want to change the world, and I genuinely believe that, but I think if the huge upside potential wasn't there, the startup industry wouldn't be as competitive as it is. Can you be more specific about how these markets transfer the costs of mistakes to you? I'm not entirely disagreeing, I just don't know of any specific examples (although that may be a symptom of my ignorance). The fact that markets cause some to have huge losses doesn't particularly bother me. I'm talking specifically about US equities, futures, and options markets which, as far as I can tell, are extremely liquid and competitive. I don't see any negative externalities caused by HFT market makers in these markets, but again, if you have examples, I'm glad to be corrected. You also cite "huge inefficiencies" from "markets". Maybe we're talking about different markets, but I don't see these inefficiencies in the markets I mentioned. I know nothing about derivatives or anything other than HFT, so maybe that's what you're talking about.