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Capital Is No Longer Scarce

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Re: Capital Is No Longer Scarce

#71

Post by kasey_junk »

DannoHung wrote: post #14
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.

Most of the firms I worked for rested orders for days or weeks. Having to rest orders for a second would not materially change their trade other than make them slightly less likely to get into the top of the book, thus increasing the spread.

Re: Capital Is No Longer Scarce

#72

Post by natrius »

joshuaheard wrote: post #46
badsock wrote: post #37

And yet there's a 50% tax break for capital gains in my country. What possible reason is there for such a massive subsidy for something that we don't need, other than corrupt influence on the political system by the wealthy to give themselves a tax break?

Letting you keep your own money is not a subsidy. That being said, labor and capital should be taxed at the same rate, there being no reason to distinguish them for tax purposes.

Labor has linear returns. Capital has compounding returns. They're different. We should tax consumption instead, but the current tax distinction isn't madness.

Re: Capital Is No Longer Scarce

#73

Post by pzone »

icebraining wrote: post #9
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...

I'm not really knowledgeable to have an opinion on HFT, but there's something I'm still not clear about. HFT firms are not that big; the ones I've seen pointed as the largest have net incomes of less than $100M. Why wouldn't the other market participants, particularly the largest Wall Street firms, allow HFTs to ruin their game? The link you posted mentions "corrupt SEC regulators", but why would they be corrupt in f…

Large Wall Street firms view these guys the way a rhinoceros views the birds snatching bugs off its back. It's not a competitive relationship, they coexist.

To push the analogy, sometimes the rhino gets annoyed and pecked too hard, but overall it's happy to live without as many bugs everywhere.

Re: Capital Is No Longer Scarce

#74

Post by yummyfajitas »

anonmeow wrote: post #42
yummyfajitas wrote: post #25

Earlier quoted context omitted.

It's not about 5 year return, it's about the fact that the potential cancer cure simply has low returns and huge risks. People are absolutely willing to make long term bets (e.g. snapchat, which has negligible revenue right now, and is entirely just hope for the future), they just need to be good bets. Molecular targets are getting harder to find. Getting a drug through the FDA is insanely difficult, costs huge amoun…

It's more straightforward to tax snapchats and facebooks some more and put the money into cancer research.

All that does is turn cancer research into a bad government investment rather than a bad private investment.

Re: Capital Is No Longer Scarce

#75

Post by spacecowboy_lon »

amelius wrote: post #58
erikpukinskis wrote: post #41

Earlier quoted context omitted.

> capitalism seems the best method for controlling innate human corruption Capitalism seems better than past failures. But it is surely a local maximum. We have thousands of years of social evolution in front of us. Experiments have hardly been exhaustive, and material conditions seem to be changing faster than ever.

The best way to control corruption is transparency. Eventually, IT systems will solve large-scale corruption.

All the computers in the world are not going to solve human nature - unfortunately.

And transparency can be abused by selective quoting by those with agenda see the UK's MP expenses scandal and who owned the news paper that broke it.

Re: Capital Is No Longer Scarce

#76

Post by yummyfajitas »

ci5er wrote: post #65
yummyfajitas wrote: post #25

Earlier quoted context omitted.

It's not about 5 year return, it's about the fact that the potential cancer cure simply has low returns and huge risks. People are absolutely willing to make long term bets (e.g. snapchat, which has negligible revenue right now, and is entirely just hope for the future), they just need to be good bets. Molecular targets are getting harder to find. Getting a drug through the FDA is insanely difficult, costs huge amoun…

> Molecular targets are getting harder to find. Is this because we've already harvested the low-hanging fruit? Are there any new paradigms on the horizon that could change this? > If you want more cancer cures, make it easier to become very rich by selling them. It's an odd thing about Americans, though. They really don't seem to mind if Jobs or Zuckerberg get insanely rich (although there was some grumbling about Ga…

It's mostly a combination of low hanging fruit all being plucked, and also the fact that it's harder to measure smaller deltas in efficacy.

I.e., if there is already a drug that cures 75% of cancers and a new drug cures 85%, a clinical trial to detect that 10% difference will require a lot more people (and cost a lot more money). Additionally cost-efficiency is not a valid reason to allow a new drug (according to the FDA), you've got to be better than the last one.

Re: Capital Is No Longer Scarce

#77

Post by lintiness »

gherkin0 wrote: post #69
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…

> High frequency trading gets shat on frequently. It's stupid. This is only a tool that evens out price differences across geological distance. 1. That's a valuable evening out prices may be a valuable function, but one reason HFT gets shat on is because of the enormous effort put into attempts to arbirage over shorter and shorter time intervals. How does society actually benefit if the prices are equalized over a 1m…

front running is illegal, and flash boys is a book packed full of ignorance. there is no outrage over one consumer buying a house or an apple ahead of another. there's no demand for "fair" auctioning of toyota corollas. speed isn't illegal, and it's been a determining advantage in markets for eternity.

Re: Capital Is No Longer Scarce

#78

Post by goodcanadian »

joshuaheard wrote: post #46
badsock wrote: post #37

And yet there's a 50% tax break for capital gains in my country. What possible reason is there for such a massive subsidy for something that we don't need, other than corrupt influence on the political system by the wealthy to give themselves a tax break?

Letting you keep your own money is not a subsidy. That being said, labor and capital should be taxed at the same rate, there being no reason to distinguish them for tax purposes.

I can see lots of reasons to distinguish between labour and capital. A big part of me thinks it would be appropriate to reward productive labour by reducing taxes and to discourage rent seeking by increasing taxes on investment income. There are practical reasons, of course, not to do this as we would rapidly chase investment from our country, but it is definitely worth thinking about these things.

Re: Capital Is No Longer Scarce

#79

Post by lintiness »

ryandrake wrote: post #59

It's a sad situation. The world, in total, has more money than it needs, distributed to a wildly disproportionate few, who have no idea what to do with it, yet there are billions of people who suffer and struggle with issues that that money could solve. But "redistribution is bad", so we all just accept the status quo.

those few who have disproportionate capital consume and invest. they don't stuff the money in their mattresses.

Re: Capital Is No Longer Scarce

#80

Post by lintiness »

badsock wrote: post #37

And yet there's a 50% tax break for capital gains in my country. What possible reason is there for such a massive subsidy for something that we don't need, other than corrupt influence on the political system by the wealthy to give themselves a tax break?

tax breaks for long term gains encourages investment.
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