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by tptacek 3938 days ago
So what's the RIGHT amount of tax we should be paying to commercial market-makers for the privilege of trading?

The residential real estate market is gigantic, a demonstrably functional piece of the US economy. Maybe the stock markets should work more like the real estate market. Forget about liquidity. Who needs it? Instead, we'll just pay seven percent of every transaction to an "agent".
1 comments
Frondo 3938 days ago
Good question! I don't have an answer to that. I do know that the markets survived just fine before the HFT companies came along, and now that they're here, I don't see society as a whole any better off for their presence.

Maybe, without just saying "they provide liquidity" and leaving it at that, you can explain how the post-HFT world is better for anyone but the HFT companies?

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tptacek 3938 days ago
Why don't I just let Vanguard, the most trusted firm in all of retail investing, explain that for me? Go look up with their Chief Investment Officer said about the impact HFT has on Vanguard's mutual funds.
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Frondo 3938 days ago
Your reply reminds me of that saying, "Who do you believe, me or your lying eyes?"

If you can't explain it in pretty simple language why HFT-level liquidity is beneficial to society as a whole--to the people working in shops, managing restaurants, dealing in real estate, and on and on--then I'm inclined to think you're just trying to bluster about it.

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tptacek 3938 days ago
That's a very self-righteous way of saying "I am not willing to perform a few Google searches and do a bit of reading".

Here, another hint: you can use the search box on the bottom of this page to find comments from me quoting Vanguard.

Either way, since you've accused me now of simply making things up to win arguments, I think I can let you off the hook. There's not much point in us discussing things further.

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Frondo 3938 days ago
I don't think you're making things up.

I also don't think, if it's that simple and obviously good for society as a whole, that it should be that hard to simply explain your position.

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kasey_junk 3938 days ago
I won't speak for him, but I think I can sum up a position that he would agree with very simply:

HFT has made trading cheaper for the vast majority of market participants. It has done this at the expense of the previous regime that was less efficient and more squalid.

Further, don't take my (or his) word for it. Listen to Vanguard which has a sterling reputation for caring for the interests of their clients who tend to be long term, small scale, investors and large pension/retirement funds.

http://www.cnbc.com/2014/04/25/vanguard-chief-defends-high-f...

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