6 ms·

Isn't HFT just being a middle man lots of times? If that understanding is correct, then I disagree that it serves any purpose. At least ads help enable new econ

Isn't HFT just being a middle man lots of times? If that understanding is correct, then I disagree that it serves any purpose. At least ads help enable new economic activity, being a middle-man just skims off the top of things that are already happening. Also, HFT has contributed to a flash crash before, so it's not free of externalities either.

lordnacho 3y ago
What's wrong with middle men? People would just cut them out if all they did was skim a bit from everyone.
- amelius 3y ago
  Eh, perhaps they set themselves up so that it becomes impossible to cut them out. If you don't know how that works, just look e.g. at TicketMaster: https://en.wikipedia.org/wiki/Ticketmaster#Criticism_and_controversies https://en.wikipedia.org/wiki/Ticketmaster#Criticism_and_con...
  - lordnacho 3y ago
    But that's not an argument against all middlemen. Do you think your fishmonger has any value?
    - amelius 3y ago
      Not against all middlemen. But it's a response to your argument: > People would just cut them out if all they did was skim a bit from everyone. The point is that "just cut them out" is not so simple in many cases. See TicketMaster and the fact that even artists hate them but have to deal with them.
growse 3y ago
> ...being a middle-man just skims off the top of things that are already happening. Presumably you buy all your goods directly from growers / manufacturers, rather than using retailers who are simply there to skim off the top? > Also, HFT has contributed to a flash crash before, so it's not free of externalities either. You're confusing the effects of the industry with the effects of incompetent actors within that industry. Besides, the negative externalities are trivial. Institutional holders barely notice or care about flash crashes.
- delecti 3y ago
  The point of the stock market is to be a market. And when possible I do like to buy from companies that sell their product directly. > You're confusing the effects of the industry with the effects of incompetent actors within that industry Doesn't that same point apply to Cambridge Analytica, the singular example of a negative externality from ads in the comment I replied to? Whether HFTs and/or the broader concept of middle-men are better or worse than ads, they're at least still in the same ballpark. I definitely agree with the GP comment's sentiment: > It fits in the "our smartest people are making people click ads" category.
  - growse 3y ago
    > The point of the stock market is to be a market. And when possible I do like to buy from companies that sell their product directly. What if you're in the northern hemisphere and want to buy strawberries in December? Or you want a pint of milk, but your local dairy only sells it by the tanker? The point is effective middlemen help markets function even better than if it were just people with things to sell and people who wanted to buy them. They provide a valuable service, which the market also coenienhly ascribes a value to. > > You're confusing the effects of the industry with the effects of incompetent actors within that industry > Doesn't that same point apply to Cambridge Analytica, the singular example of a negative externality from ads in the comment I replied to? I think there's a difference between incompetence and malice. But broadly, yes. I don't think you can write off the ad / data broker industry because of a few bad actors. > Whether HFTs and/or the broader concept of middle-men are better or worse than ads, they're at least still in the same ballpark. I definitely agree with the GP comment's sentiment: > > It fits in the "our smartest people are making people click ads" category. The difference I see is that it's possible to externally measure and quantify the benefits / externalities of HFTs to the market participants. It's much less clear cut in ads, which is why some people feel ickier about that particular industry. But I don't buy the whole "smartest people doing useless things" argument. You can't make people work on "useful" things, and you can't discount everything that a smart person does in the ad industry as useless to humanity. It's much more complicated than that.
    - 3y ago
smabie 3y ago
Middle men provide real value, that's why you buy almost all of your stuff thru them.
- HDThoreaun 3y ago
  Not when the market is already liquid enough for my liking without them.
  - smabie 3y ago
    What market are you referring to? Certainly not financial markets where market makers make up majority of volume?
- deleted 3y ago
  [deleted]

lordnacho 3y ago

What's wrong with middle men? People would just cut them out if all they did was skim a bit from everyone.

amelius 3y ago
Eh, perhaps they set themselves up so that it becomes impossible to cut them out. If you don't know how that works, just look e.g. at TicketMaster: https://en.wikipedia.org/wiki/Ticketmaster#Criticism_and_controversies https://en.wikipedia.org/wiki/Ticketmaster#Criticism_and_con...
- lordnacho 3y ago
  But that's not an argument against all middlemen. Do you think your fishmonger has any value?
  - amelius 3y ago
    Not against all middlemen. But it's a response to your argument: > People would just cut them out if all they did was skim a bit from everyone. The point is that "just cut them out" is not so simple in many cases. See TicketMaster and the fact that even artists hate them but have to deal with them.

growse 3y ago

> ...being a middle-man just skims off the top of things that are already happening. Presumably you buy all your goods directly from growers / manufacturers, rather than using retailers who are simply there to skim off the top? > Also, HFT has contributed to a flash crash before, so it's not free of externalities either. You're confusing the effects of the industry with the effects of incompetent actors within that industry. Besides, the negative externalities are trivial. Institutional holders barely notice or care about flash crashes.

delecti 3y ago
The point of the stock market is to be a market. And when possible I do like to buy from companies that sell their product directly. > You're confusing the effects of the industry with the effects of incompetent actors within that industry Doesn't that same point apply to Cambridge Analytica, the singular example of a negative externality from ads in the comment I replied to? Whether HFTs and/or the broader concept of middle-men are better or worse than ads, they're at least still in the same ballpark. I definitely agree with the GP comment's sentiment: > It fits in the "our smartest people are making people click ads" category.
- growse 3y ago
  > The point of the stock market is to be a market. And when possible I do like to buy from companies that sell their product directly. What if you're in the northern hemisphere and want to buy strawberries in December? Or you want a pint of milk, but your local dairy only sells it by the tanker? The point is effective middlemen help markets function even better than if it were just people with things to sell and people who wanted to buy them. They provide a valuable service, which the market also coenienhly ascribes a value to. > > You're confusing the effects of the industry with the effects of incompetent actors within that industry > Doesn't that same point apply to Cambridge Analytica, the singular example of a negative externality from ads in the comment I replied to? I think there's a difference between incompetence and malice. But broadly, yes. I don't think you can write off the ad / data broker industry because of a few bad actors. > Whether HFTs and/or the broader concept of middle-men are better or worse than ads, they're at least still in the same ballpark. I definitely agree with the GP comment's sentiment: > > It fits in the "our smartest people are making people click ads" category. The difference I see is that it's possible to externally measure and quantify the benefits / externalities of HFTs to the market participants. It's much less clear cut in ads, which is why some people feel ickier about that particular industry. But I don't buy the whole "smartest people doing useless things" argument. You can't make people work on "useful" things, and you can't discount everything that a smart person does in the ad industry as useless to humanity. It's much more complicated than that.
  - 3y ago

smabie 3y ago

Middle men provide real value, that's why you buy almost all of your stuff thru them.

HDThoreaun 3y ago
Not when the market is already liquid enough for my liking without them.
- smabie 3y ago
  What market are you referring to? Certainly not financial markets where market makers make up majority of volume?
deleted 3y ago
[deleted]