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Local governments are also involved in the stock market. High frequency traders make money by acting as an intermediary between buyers and sellers, and thus not
by LowKarmaAccount 13y ago
Local governments are also involved in the stock market. High frequency traders make money by acting as an intermediary between buyers and sellers, and thus not creating actual wealth. Instead their supposed value is the "liquidity" they add. That means that the price of "adding liquidity" is a lower return on a stock or bond invested by a local government. Which in turn means that the local government might have to cut funding services for the poor. Even if you give away the money you earn, you are still robbing the poor so you can give to the poor people that you like.
- ig1 13y agoIf you're a long term investor like a government who invested in an index tracker, HFT and the like have a relatively small impact on prices compared to trades by other large institutional investors.
- Fishkins 13y agoThis is basically what I was going to say, but more specific. I can't believe they could write such a long article without even mentioning the direct negative impact your job could have on the world. It's still possible working your high-paying job is net improvement over the alternatives, but I don't think this went into enough depth to provide a good argument.
- tome 13y agoWait, do you think intermediaries never create actual wealth?
- LowKarmaAccount 13y agoNo, I don't think that. I also don't think that HFT is necessary for an intermediary to create wealth.