[KingMob]

We already regard some profitable activities (e.g., slavery, child labor) as unacceptable, so there's no reason a priori to rule out considering whether HFT falls in the category of "too detrimental to society to allow".

Likewise, the more esoteric forms of finance (CDS) and the people who made them and continue to game the system greatly contributed to the recent recession without suffering any of its ill effects.

And furthest down the chain of societal damage are photo sharing sites and chat services, which mostly just waste time and supplant the revenue of film/phone companies.

If you're implying that considering HFT's societal worth is as silly as examining photo sharing services, you're mistaken.

[kasey_junk]

"We already regard some profitable activities (e.g., slavery, child labor) as unacceptable, so there's no reason a priori to rule out considering whether HFT falls in the category of "too detrimental to society to allow""

I agree, I think a robust conversation about the pluses and minuses of electronic trading are of value, and there is nothing sacred about electronic trading activities that means they are a natural right. That conversation needs to be an informed one though, and discussions about HFT never are.

"Likewise, the more esoteric forms of finance (CDS) and the people who made them and continue to game the system greatly contributed to the recent recession without suffering any of its ill effects."

This is a point that is most aggrevating about the narrative that Michael Lewis is pushing about HFT. The people being "hurt" in his hypothesis, are in fact the people who create esoteric forms of finance. The big institutions are upset by HFT because it has cut into their profits, not because it is unfair.

"And furthest down the chain of societal damage are photo sharing sites and chat services, which mostly just waste time and supplant the revenue of film/phone companies. If you're implying that considering HFT's societal worth is as silly as examining photo sharing services, you're mistaken."

WhatsApp was sold for 19 billion dollars. That is about exactly what the entire HFT market was worth in it's very best year if you believe very inflated stats.

[KingMob]

"This is a point that is most aggrevating about the narrative that Michael Lewis is pushing about HFT. The people being "hurt" in his hypothesis, are in fact the people who create esoteric forms of finance. The big institutions are upset by HFT because it has cut into their profits, not because it is unfair."

Yes, this was definitely glossed over in the article. But some of those large investors are things like pension funds, which hold ordinary people's savings. I'm not sure to what extent that trickles down though. Also, what about the flash crashes?

[kasey_junk]

Pension funds are operating more cheaply now than at any time in history. It is a myth propogated by large bank trading desks that HFT profits come from pension funds. Instead they come from trader bonuses that are no longer necessary.

As for flash crashes there are 2 answers to that question 1) they correct so fast that they impact very few people. 2) if exchanges would stop busting trades during crashes the practices that lead to them would stop.