[vecter]

It's hard to continue this conversation in good faith without pointing out that you literally have no idea what you're talking about. You don't know what HFT firms or what market making actually is, yet you don't mind throwing out outrageous accusations of fraud and illegal activities with zero evidence to back it up.

Your entire argument is "I don't know what they do, and they make money in finance, so they must be doing it illegally." The burden is on you to provide evidence to back up your claim. That's how things work. I could claim that HN user rgifford is the Zodiac Killer, and my evidence is "I don't know him but if you rearrange some subset of the letters of words he's typed in the past, they spell out 'I am the Zodiac Killer'". Whether you realize it or not, your reasoning is that specious at best.

> The market for consumer electronics hasn't fundamentally threatened the stability of the US government every decade for the past 5 decades.

Nothing HFT has ever done has come within even 0.000001% to threatening the stability of the US government. Period.

> Renaissance Technologies Medallion fund may as well be an insider trading scheme for all the public can tell.

Again, claims require evidence. You need to provide that evidence. But more importantly, the fact that you compare RenTech's Medallion Fund to HFT again demonstrates your complete ignorance on the topic. The Medallion Fund isn't powered by high frequency trading. It started decades before HFT ever existed.

> Do HFTs issue or purchase billions of dollars of debt with the express goal of market liquidity? No? So why do you use the term "providing liquidity?" You know "providing liquidity" isn't the same thing as "frenetically purchasing and selling derivatives," right?

You don't know what providing liquidity means. When you place an order to buy or sell 100 shares of MSFT in the market, who is taking the other side of your order? The vast majority of the time, it's an HFT firm.

> If these funds didn't exist, I've seen no compelling evidence markets would so much as hiccup.

I'm sure if you took all of the grease out of your car engine, it would continue to operate without a hiccup.

> I've seen plenty of compelling evidence that much of financial services in this country are a net drain on its productive capacity.

Another false comparison. HFT is not a standard "financial service" that is provided to consumers.

> We'll have to agree to disagree [...] Time will tell!

Flat earthers also ignore reality and disagree, but that doesn't make their perspective equally as valid as those who look at pictures of the earth and conclude it's spherical. Time has already told us, but whether or not you want to look at facts or educate yourself on even the basics of what you think you're talking about is a different question.

Almost every sentence you said in your post contained some flat out false or wrong statements. Your unfounded arrogance is matched only by your ignorance on this topic. You have not made a single concrete or factual point about how HFT might be fraudulent, yet you seem to hold this worldview with the same conviction that the sun rises in the east.

[rgifford]

> who is taking the other side of your order?

Literally anyone. Literally any other market participant with interest in longterm ownership.

> Your entire argument is "I don't know what they do, and they make money in finance, so they must be doing it illegally." The burden is on you to provide evidence to back up your claim.

That's not my argument. Snakes bite. Highly profitable, speculative, and complicated US financial firms have consistently grown to threaten the stability of US financial systems before collapsing. Precedent matters. When an assertion violates a precedent, it's what must be proven. Your assertion has the burden of proof, and it's an incredibly high one at that.

> ...the fact that you compare RenTech's Medallion Fund to HFT again demonstrates your complete ignorance on the topic

Medallion is one of the most well regarded and profitable hedge funds in modern American history. It's a grandfather to modern HFTs. Even its sterling record is highly suspect.

I sincerely hope the American public doubles short term capital gains taxes and regulates financial markets back to the stone age. Smart people need to spend their time on engineering, medicine, and research. The amount of human capital wasted on silly little financial machinations these days sickens me. I go back and read about financiers jumping from building back in the 20s and I understand completely. Our best and brightest, so confident of what they had to gain, traded their potential in pursuit of Alchemy only to be left with nothing. And who can blame them? Newton fell for the same.

[vecter]

> Literally anyone. Literally any other market participant with interest in longterm ownership.

You don't know what you're talking about. If there were no market makers, your orders probably wouldn't execute within any reasonable time frame.

> That's not my argument. Snakes bite. Highly profitable, speculative, and complicated US financial firms have consistently grown to threaten the stability of US financial systems before collapsing. Precedent matters. When an assertion violates a precedent, it's what must be proven. Your assertion has the burden of proof, and it's an incredibly high one at that.

That is your argument. Snakes bite? So, therefore, what? Financial companies commit fraud as their primary form of operation? What kind of argument is that? It's ludicrous.

> complicated US financial firms have consistently grown to threaten the stability of US financial systems before collapsing

I cannot emphasize this enough. You literally have zero idea what HFT firms actually do day-to-day. Many people use the word literally when they mean figuratively. I actually mean literally in this case. Comparing HFT firms to banks selling mortgage-backed securities is like comparing your local florist to a drug cartel. In fact, it's probably more like comparing a piece of wood to drug cartel. They're entirely different things. HFT firms don't even sell anything.

> Precedent matters. When an assertion violates a precedent, it's what must be proven.

The precedent you name is totally irrelevant. It's like saying since drug cartels do illegal things (they do), then this piece of wood lying on the ground in the forest is also breaking the law by existing. That's how disconnected the two things you're comparing are, but, again, since you literally have no clue what HFT firms do, you don't even understand that.

> Your assertion has the burden of proof, and it's an incredibly high one at that.

Wrong. You can claim that, but like all of your other claims, it's entirely false.

> Medallion is one of the most well regarded and profitable hedge funds in modern American history. It's a grandfather to modern HFTs. Even its sterling record is highly suspect.

I truly don't think you're even reading what I'm writing, or if you do, you keep moving the goalposts (not that it helps your case--you're still 100% wrong regardless of how much further you try to move it). HFT firms are not hedge funds. Stop comparing them to hedge funds, unless you think comparing a piece of a wood to a drug cartel is a useful comparison, in which case there's no point in talking anymore.

Also, "The Medallion fund [...] is a grandfather to modern HFTs" is such a vague and meaningless statement. Sure they have some algorithms, but lots of investment firms do. So what?

But if we follow this absurd line of reasoning, if your grandfather committed a crime (which even in this analogy, they didn't), does that mean that their grandchildren do also? Of course not.

> Smart people need to spend their time on engineering, medicine, and research. The amount of human capital wasted on silly little financial machinations these days sickens me. I go back and read about financiers jumping from building back in the 20s and I understand it completely.

This is a totally reasonable opinion, but entirely divorced from the question of whether or not HFT commits fraud. Again you have provided literally (not figuratively, but literally) zero evidence to back up your claim.

Your entire argument seems to be:

- Some financial firms have done bad stuff in the past

- HFTs are financial firms (sort of, but whatever)

- Therefore HFTs must be committing fraud

That's literally your argument as far as I can parse it. If you read that, that's just so patently absurd that I don't think I can do anything more to highlight how absurd it is. Its absurdity stands on its own. Maybe something like:

- Some people have committed crimes in the past

- You're a person

- Therefore you're a criminal