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What happened last year was FAR from normal operations in the markets. What happened last year wasn't even a "surge in activity"; it was a hurricane. And, to b
by 015a 4y ago
What happened last year was FAR from normal operations in the markets. What happened last year wasn't even a "surge in activity"; it was a hurricane.
And, to be frank; Robinhood can obviously accept some blame, sure, but the financial settlement system is what almost bankrupt them. There's no good reason why transfers have to take four, now three, now two days to settle. Everyone in the industry knows this; but they're slow as molasses at remediating it.
Its insane to think about how much economic prosperity has been, quite literally, destroyed into nothingness by this antique component of our financial system. Whether its the billions of dollars tied up in depository collateral, rather than being productively deployed. Or the businesses, like Robinhood, which were (or were nearly) destroyed due to black swan events.
- jollybean 4y agoIs it really necessary for real productivity that we have instant transfers and trade on crazily priced equities? What part of the real economy requires any of that? I'm doubtful. I wonder what a Tobin tax, and possibly even some kind of ban on high speed or even fast trading would do? i.e. throttling limitations? Or something to slow down the trading? Would it affect the real economy and would the financial sector be prevented from creating value? Or would it just mean some casino aspect of the operation is limited ... I'm not suggesting we actually do that, because it's fine if people want to do those things so long as it doesn't affect the real economy with negative externalizations. But I wonder if it would be better for the system as a whole.