Capital Is No Longer Scarce • Hacker News Board

Re: Capital Is No Longer Scarce

#11

Post by HiLo » Fri, Dec 11, 2015, 11:39 AM UTC

endymi0n wrote: post #8

vlehto wrote: post #4

High frequency trading gets shat on frequently. It's stupid. This is only a tool that evens out price differences across geological distance. If someone buys significant amount of AAPL stock in New York, the price goes up in NY. Then someone from London can profit by buying small amount of AAPL stock in London and selling it in NY. High frequency trading is this, but with very high speeds and lots of competition. Thi…

Oh, and another round of "we HF-Traders are just misunderstood benefactors of the general public and helping markets being more efficient". There are heaps of evidence HFT ruins markets, economies and nations, so I call BS. http://www.zerohedge.com/news/2015-03-20/how-hft-destroys-ma...

>there are heaps of evidence

>links to zerohedge

credibility = destroyed

Re: Capital Is No Longer Scarce

#12

Post by CJefferson » Fri, Dec 11, 2015, 11:42 AM UTC

HiLo wrote: post #11

endymi0n wrote: post #8

Earlier quoted context omitted.

Oh, and another round of "we HF-Traders are just misunderstood benefactors of the general public and helping markets being more efficient". There are heaps of evidence HFT ruins markets, economies and nations, so I call BS. http://www.zerohedge.com/news/2015-03-20/how-hft-destroys-ma...

>there are heaps of evidence >links to zerohedge credibility = destroyed

Whenever I see a discussion like this a HFT-supporter, like yourself, will usually come along and say that any links which are made to suggest HFT is bad are terrible (often the book flash boys is mentioned), but I never see any evidence of this terribleness, or alternative information sources. Do you have any?

Re: Capital Is No Longer Scarce

#13

Post by mdemare » Fri, Dec 11, 2015, 12:10 PM UTC

_9vpl wrote: post #3

> That means we have massive amounts of capital available to invest in new endeavors. It explains why interest rates are low and there is fairly little that central banks can do about it unless they figure out a way to dramatically reduce investable capital – they can certainly shorten their balance sheets but even that impact is likely to relatively small in the overall scheme of things (eg US Fed about $3 Trillion)…

Just imagine what would have happened if the Fed would have used their current strategy in 1995, or 2005.

The same as what's happening now? Sure, then blame the Fed.

Something dramatically different? Then maybe there's something else going on, and the Fed is merely responding to that.

Re: Capital Is No Longer Scarce

#14

Post by DannoHung » Fri, Dec 11, 2015, 12:14 PM UTC

vlehto wrote: post #4

High frequency trading gets shat on frequently. It's stupid. This is only a tool that evens out price differences across geological distance. If someone buys significant amount of AAPL stock in New York, the price goes up in NY. Then someone from London can profit by buying small amount of AAPL stock in London and selling it in NY. High frequency trading is this, but with very high speeds and lots of competition. Thi…

Oh give it a break. If you had to rest orders for a second, then HFT would evaporate.

Re: Capital Is No Longer Scarce

#15

Post by vlehto » Fri, Dec 11, 2015, 12:36 PM UTC

endymi0n wrote: post #8

vlehto wrote: post #4

High frequency trading gets shat on frequently. It's stupid. This is only a tool that evens out price differences across geological distance. If someone buys significant amount of AAPL stock in New York, the price goes up in NY. Then someone from London can profit by buying small amount of AAPL stock in London and selling it in NY. High frequency trading is this, but with very high speeds and lots of competition. Thi…

Oh, and another round of "we HF-Traders are just misunderstood benefactors of the general public and helping markets being more efficient". There are heaps of evidence HFT ruins markets, economies and nations, so I call BS. http://www.zerohedge.com/news/2015-03-20/how-hft-destroys-ma...

I skimmed some of the evidence there. Nothing seems to condemn the HCF industry as a whole. Some linked articles about it in Wall street journal and Financial Times are behind paywall. And even if HFC would be bad, it's not significant. Your source also says HFC can't hold much equity.

You could have explained me why HFC is bad. Just slamming around some link with lots of "evidence" is not very convincing. Given how easy it is to find evidence about anything these days. It's bit unfair to assume I should gather your argument for you.

Re: Capital Is No Longer Scarce

#16

Post by grinnbearit » Fri, Dec 11, 2015, 12:43 PM UTC

CJefferson wrote: post #12

HiLo wrote: post #11

Earlier quoted context omitted.

>there are heaps of evidence >links to zerohedge credibility = destroyed

Whenever I see a discussion like this a HFT-supporter, like yourself, will usually come along and say that any links which are made to suggest HFT is bad are terrible (often the book flash boys is mentioned), but I never see any evidence of this terribleness, or alternative information sources. Do you have any?

Actually yes, Chris Stucchio's posts on the subject are pretty in depth starting with https://www.chrisstucchio.com/blog/2012/hft_apology.html

You could also look at the book, Flash Boy's Not So Fast, which takes apart, page by page, all the arguments in the book, Flash Boys

http://www.amazon.in/Flash-Boys-Insiders-Perspective-High-Fr...

Re: Capital Is No Longer Scarce

#17

Post by yummyfajitas » Fri, Dec 11, 2015, 1:13 PM UTC

endymi0n wrote: post #8

vlehto wrote: post #4

High frequency trading gets shat on frequently. It's stupid. This is only a tool that evens out price differences across geological distance. If someone buys significant amount of AAPL stock in New York, the price goes up in NY. Then someone from London can profit by buying small amount of AAPL stock in London and selling it in NY. High frequency trading is this, but with very high speeds and lots of competition. Thi…

Oh, and another round of "we HF-Traders are just misunderstood benefactors of the general public and helping markets being more efficient". There are heaps of evidence HFT ruins markets, economies and nations, so I call BS. http://www.zerohedge.com/news/2015-03-20/how-hft-destroys-ma...

Themis trading wrote a report saying HFT is evil? This is about as persuasive as the taxi industry releasing a document saying that Uber is worse than Voldemort or the hotel industry saying AirBnB is the devil.

Furthermore, many of the issues described there are fairly innocuous in reality.

For example, flickering (aka "quote stuffing") is a software bug which costs HFTs money: http://zacharydavid.com/2014/04/on-hft-part-ii-bugs-features... https://www.chrisstucchio.com/blog/2014/quote_stuffing_is_a_...

The issue of HFT being a zero sum game in the race for latency is predominantly caused by the subpenny rule: https://www.chrisstucchio.com/blog/2012/hft_whats_broken.htm...

Re: Capital Is No Longer Scarce

#18

Post by cmdkeen » Fri, Dec 11, 2015, 1:14 PM UTC

endymi0n wrote: post #8

vlehto wrote: post #4

High frequency trading gets shat on frequently. It's stupid. This is only a tool that evens out price differences across geological distance. If someone buys significant amount of AAPL stock in New York, the price goes up in NY. Then someone from London can profit by buying small amount of AAPL stock in London and selling it in NY. High frequency trading is this, but with very high speeds and lots of competition. Thi…

Oh, and another round of "we HF-Traders are just misunderstood benefactors of the general public and helping markets being more efficient". There are heaps of evidence HFT ruins markets, economies and nations, so I call BS. http://www.zerohedge.com/news/2015-03-20/how-hft-destroys-ma...

Bollocks. Given fund managers are obligated to obtain "best execution" under MiFID (and regulations in general) if HFT were impacting that then they would raise merry hell. The fund management industry is orders of magnitude larger and more influential than all HFTs.

Re: Capital Is No Longer Scarce

#19

Post by forgetsusername » Fri, Dec 11, 2015, 1:15 PM UTC

endymi0n wrote: post #8

vlehto wrote: post #4

High frequency trading gets shat on frequently. It's stupid. This is only a tool that evens out price differences across geological distance. If someone buys significant amount of AAPL stock in New York, the price goes up in NY. Then someone from London can profit by buying small amount of AAPL stock in London and selling it in NY. High frequency trading is this, but with very high speeds and lots of competition. Thi…

Oh, and another round of "we HF-Traders are just misunderstood benefactors of the general public and helping markets being more efficient". There are heaps of evidence HFT ruins markets, economies and nations, so I call BS. http://www.zerohedge.com/news/2015-03-20/how-hft-destroys-ma...

>There are heaps of evidence HFT ruins markets, economies and nations, so I call BS.

HFT itself isn't "bad", period.

Does it have bad actors, stupidity, corruption, inefficiencies and is sometimes a waste? Yes. What industry is immune to this?

Re: Capital Is No Longer Scarce

#20

Post by cryptica » Fri, Dec 11, 2015, 1:15 PM UTC

Misallocation is a massive problem. I think a significant amount of money is going into advertising, pointless startups, entertainment and social media.

Basically, we are spending huge amounts of money getting numbed out of our minds instead of solving real fundamental problems.

In general, I think it reveals a deeper problem about capitalism; none of us understand value anymore (we have more junk in our lives than we could possibly need)... So we struggle to allocate capital properly. We just blindly follow trends. The people who are getting rich now are not those who want to make the world a better place; the winners are those who just want to make quick cash (short-term thinkers who take insane risks).

Does society prefer Snapchat or a cure for cancer? In the current economic environment, investors prefer Snapchat because Snapchat is pretty likely to get a ROI within the next 5 years.

The return on investment for a cancer cure is probably small (especially given the large amount of recurring revenue that big pharmaceuticals are currently making by selling cancer drugs). Also, it's much riskier than Snapchat... Could take 5 years, 10 years or 20 years.

Ultimately, we are satisfying people's short-term 'wants' at the expense of their long-term needs. We're a society of addicts who just want to get a quick buzz.