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No, ITG, Zero Hedge Would Prefer To Not Regulate You Either
While reading Advanced Trading today we stumbled across the following curious excerpt:
Advanced Trading: You mentioned regulators and politicians are ignorant ...
[ITG's Jamie] Selway: I would say that their knowledge is incomplete.
Advanced Trading: Is this causing HFT to be scape-goated?
[ITG'S Jamie] Selway: Yes, there's a mixture of that. I am fond of saying I am not a huge regulations guy but I am a fan of regulations at an appropriate level that boosts confidence. I for one would prefer to be regulated by the SEC and not by ZeroHedge. So we have a team of experts and multiple agencies that are expert in regulations and know the markets and have the resources.
And here we were thinking that after three years of reading us, at least the supposedly more sophisticated market elements would have moved beyond merely pedestrian stereotypes. Alas, as always happens when we assume anything other than sheer stupidity, we end up 100% wrong.
Here's the deal Jamie: Zero Hedge, knowing full well we are quite mortal, and as like everyone else - very susceptible to temptation - realize we too 'have our price', would have no interest in finding out just what said "price" may be, by succumbing to bribery or any other form of corruption by you and/or your HFT peers and competitors. Nor do we have an interest in pretending to "regulate" you for several years, then submitting our resumes to you, tired of five figure government jobs, and expecting some quid pro quo in exchange for all those years when we saw the HFT 'lobby' engage in gross market manipulation, and demanding some form of equitable recompense, preferably in a far better paying job (for example moving from the NASD to Goldman Sachs... in a purely hypothetical scenario of course) but really anything with a lot of the zeros (that we enabled) at the end of it, would do.
We have no interest in that.
We realize that makes us different than the SEC. Because frankly, just like you, we also realize that the first entity to be purchased in any regulated venue, is none other than the regulator. Which in the absence of the SEC, we assume would be us.
We have no interest in that either.
But more importantly, we would not even dream of regulating you, or anyone else for that matter, because frankly, unlike the collapsing and insolvent status quo, we believe in the myth of a fair market, one where a room full of academics does not believe it is smarter than the collective rational whole of countless unitary market actors.
We believe in a market that regulates itself.
That means that the banks can go hog wild in loading up on CDOs, selling CDS, leveraging themselves 1000x times, and whatever else they feel like doing in pursuit of that ever more elusive ROE, but when they blow up, as they always inevitably do in a world in which they know that the politicians and regulators they have purchased have no alternative but to rescue them, they blow up. Period. Game over: not a penny in taxpayer money would ever be used to rescue them.
That means abolishing the Fed, firing the 10 academics that determine the fate of the world on a daily basis, and letting the market itself determine the true cost of money. Of course, that also would mean scrapping generations of Ivy League-taught economists as their art, pardon science, is exposed to be the flawed and erroneous travesty that has led the world to a precipice, whose outcome could easily be global war next. Just like that last time.
But that is irrelevant to you.
What is relevant, is that we would most certainly let you and your "market-making, liquidity providing" colleagues run amok in the market, sub-pennying each other, stub quoting endlessly, churning and quote stuffing to the point where you and all your HFT peers drive the last remaining real investor out of the market, in the process sending volatility to record proportions and terminally breaking what's left of the a stock market. At that point the real cannibalization can begin, which is the only way that the market can eradicate itself of the scourge that is HFT - because what would happen then is the perfectly normal and long overdue reversion to the mean, long pushed away from its equilibrium point courtesy of endless artificial intervention propping up parasitic trading, or, said otherwise, your quarterly EPS bottom line, which of course, is all your care about.
Incidentally we have seen what happens when HFT is not regulated, such as ever since the adoption of Reg NMS: first an algorithmic take over of all trading, then a flash crash, then hundreds of billions in retail capital outflows as the retail investors figure out what a sham (and scam) the marketplace truly is, and finally the collapse in volume, which as you well know Jamie, is the death knell for you and your peers.
What is most ironic in all of this, is that the second before you pull the plug on your algos for the last time, as the hollow market collapses under its own weight, you will wish that Zero Hedge had been regulating you...
It will be too late.
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BRAVO!!! Did Marla stop by to encourage this retort?
We miss you Marla! And Tyler, you know we love you!
Selway hasn't been fucked like that since grade school...
ah, yes, I miss Marla and ZeroRadio, where are you?
Time for Goldman Sachs to reach out to Tyler, again.
Outstanding TD
Well Mr. Selway, it looks like we'll be taking our cocktails standing up for the next few days, now won't we?
But I'm afraid you've just stood on a prominent and respectable enough platform and come across as very vague about specific and detailed charges against your business and the marketplace that your firm has helped hammer into the sorry state which the investing public now finds it.
You might want to reconsider another tack apart from appealing to an authority that you yourself describe as both ignorant and rather well rested. Interested persons seeking further edification will at least find Zero Hedge to be quite the opposite in these respects.
How do I "like" this?
Outstanding, Tyler(s)!
Thank you for speaking on the behalf of many of us.
Just a little too John Gultish for me
Just keep believing that you don't own yourself and go back to sleep. The overseers expects you to be in the fields bright and early.
Wait, I'm asleep? Oh, since I didn't comment like ZHeep and fall all over myself to blow Tyler, then I must be asleep? Who is sleeping? I can read this site and not automatically worship every word. Now, back to sleep crockett. Think for yourself. Incredible insight on ZH but that was way, way, way to dramatic.
I was defending Rand not Durden. Coals to Newcastle.
Good retort. O/T FWIW -
Anonymous:
Declaration of War on the United States Government.
http://www.youtube.com/watch?v=jAaCZWQndqA&feature=youtu.be
Anon just reduces the time between now and an internet kill switch. Almost have to question "their" motives at this point since they don't appear to do any real damage to the internetz. (Of course I'm willing to admit Anon may well deliver some blows and we just don't hear about it.)
I hate it when nobody tells me nothing.
Feeling a little double negative this evening?
Ain't nobody never learned none of us no good English.
Sounds like a Ron Paul missive, sans the rambling tangents he seems to interject a bit too often.
But since Tyler isn't running: Elect Ron Paul !!!!
Just wanted to say: I READ THIS!!!!
Summers Eve Commission...our douches restore confidence in your Jamies.
Zerohedge, Bitchez!
That's My Mother Fucker!
That's How You Get Shit Done!!
That's Our Fearless Leader Bitchez!!!
The Blue Bloods are gonna GETCO You Tyler!!
or even worse! than that!!
The Jew Help will be sent to nickle and dime you into the poor house! LOL!!
"I for one would sooner be regulated by the SEC ,and not by ZeroHedge"
Whos the clown.?
As if the SEC regulates.
thats like saying the USJustice department serves justice.
Too funny.
Jump you Fuckers !
And that ladies and gentleman is what I call reaming them a new asshole.
Actually when the HFTs panic and sell EUR into hell, should take a sizable chunk out of the ECB.
Ah yes, chaos arrives.
ZzZzZ
Nil regulation carried to its logical conclusion is as farsicle and inefficient as the joke we have now.
Stop waving it around as a cure-all which it isn't, you're getting the muppets excited.
Otherwise, nice rant.
Nature already regulates everything (including the regulators). Men in badges are superfluous, not to mention needlessly expensive and constraining. A correction is coming.
You realise of course that 'regulation' currently prevents you from being an indentured slave of the 1%'ers. Not in the current metaphorical sense either.
Oh yeah... toss out the Magna Carta and 800 years of regulation. Let nature rule again.
You do know what that is and why it's important right?
Pfft... History bites those in the ass that are ignorant of it.
You do realize that the 1% maintain control by buying the politicians who create the regulations, don't you?
You wouldn't know history if it bit you in the ass. As a friend of the regulators it's going to do that to you presently.
No shizzle, they keep control that way?
Its a trade. Zzzzz. 2 sides to every trade, do I have to explain that too? Or is the whole world just one sided to you?
You get to own a house, have a job that you get paid for, and have conduct trade in a somewhat civil way.
They get to set the rules.
Otherwise you're just free labour to be worked to death. Its a good deal.
If I was a 1%, I'd be cheering for the end. Guess who can afford a private army. Let me help you out, Not you.
If people are so evil that they will enslave you in a free market then how is giving some of those bad people a monopoly on violence over everyone else going to make things better? The US government has the power to execute you at will without charges and is launching a fleet of 30,000 spy drones and 7,500 combat drones over America and you seem to think that that's all just part of the "trade."
I hate to break it to you but you're what's known in common parlance as a "chump."
I think you dropped this.
<tin hat>
It keeps them out of your head.
Drones to hunt the workers, and stop Joe Sixpack from shopping at Walmart, and to keep people from hiding gold in their backyards. They have gold sensors you know, they scan your house and find out exaclty how much gold you have. Then, while you're sleeping, they slip and swap it for fools gold.
Laugh it up, Chuckles. Then read this and feel free to admit your error. The truth hurts, doesn't it?
Drones over U.S. get OK by CongressAccording to some estimates, the commercial drone market in the United States could be worth hundreds of millions of dollars once the FAA clears their use.
The agency projects that 30,000 drones could be in the nation’s skies by 2020.
http://www.washingtontimes.com/news/2012/feb/7/coming-to-a-sky-near-you/
Pentagon working with FAA to open U.S. airspace to combat drones
The military says the nearly 7,500 robotic aircraft it has accrued for use overseas need to come home at some point. But the FAA doesn't allow drones in U.S. airspace without a special certificate.http://articles.latimes.com/2012/feb/13/business/la-fi-military-drones-2...
Yeah, and last century it was invasion of spy weather balloons, and the alien conspiracy. Oh shizzle, you're right. They do have tin hat penetrating gold scanners!
You don't even see the hampster wheel do you?
If you consider documented facts to be insane then what does that make you?
Or, more succinctly, his solution is akin to:
"We fear the potential concentration of power in an anarcho-capitalist society, therefore, we must concentrate power in the form of government, in order to combat the potential concentration of power."
Ahh yeah. Duh. Of course I fear it, everyone should.
'Anarcho-capitalist' as you call it, is a 3rd world state of resource distribution.
You think the current system is inefficient, take a look at system efficiency in 3rd world countries and tell me you'd prefer that. I like knowing I won't starve.
So you support a system of regulation and entitlements which will cost in excess of 100 trillion dollars over the next three decades (and that doesn't include trillions more for killing the scary Muslims hiding under your bed) and you believe that you're not going to starve?
How's that work? Show your work and please note that you can't get something for nothing.
He's not going to starve because his hungry neighbors will roast him first.
"Donner party, table for eight."
Clowns like you caused muslim witchhunt, after you put down the red army. Gotta have ghosts to chase, lest there be a minute for introspection. Christian nutters in the US have done more harm then the third world countries they chose to bully, but its always an ante-up game when each side has nothing to lose. Its kids and civilians that get caught in the crossfire, and everyone goes to church and says sorry, but I was doing the right thing. Gotta love religion, good subsitution for a moral compass.
Oh.. I know i'm not going to starve. I just like social stability. It reduces the cost of running a business, making money and caring for family.
When I'm bored with some time to kill, it amuses me to explore the thinking of muppets who facilitate the problem. You don't get it, you sit there on your computer screaming about a debt overhang, yet I bet your computer was made overseas, and somehow you have time to post on zerohedge. If it was such a big deal for you really, wouldn't you be spending your time doing something constructive?
Throw another empty beer can at the television Joe.
Dude, I'm an atheist. And if you want to know who is responsible for witch hunts against Muslims you have no further to look than your big government supporting self.
Magna Carta, the natural law, rights theory, that which was embodied in the BoR to the US Constitution in my view is the remedy, not the baby to be thrown out with the bath water. We all inherited an amazing legal tradition, unparalleled in all of known human history and yet today willingly piss it away via bait and switch.
Technocratic fiat that runs contratry to this tradition is the cancer that is killing western civ and that which needs to be purged.
You are conflating the rule of law with 'regulation'. I don't know of any like minded person that is interested in disposing of the rule of law. On the contrary, they advocate the return of the rule of law, replacing rule by bureucratic regulatory fiat.
It is your ass covered in bites, as the basic distinction between of rule of law and rule of technocrats escapes you.
Thankyou for making my point.
Perhaps it wouldn't be so circular if the US spent a few more bucks on education. F*ck you guys are dense.
reg·u·la·tion/?regy??l?SH?n/
Noun:- A rule or directive made and maintained by an authority.
- In accordance with regulations; of the correct type.
Synonyms: rule - adjustment - law - controlSYNONYMS LAW
law/lô/
Noun:They are the same thing, the distinction is artificial.
If you think it is not, tell me how you would remove regulation from the financial industry, without unwinding the magna carta. YOU CANT. I'll tell you why, because property and person are linked, as are your rights to control either.
Law and its enforcement are supposedly separate. You understand separation of powers principle yes?
As I said at the start ZZZZZZZZZzzzzZZz
You clowns are gonna get what you ask for if you're not careful.
LMAO !! I'll bet he doesn't mention you again for a long while.
Thankyou Tyler for so eloquently expressing the opinions of so many of us here.
My own words can no longer adequately express my disgust at the state of the world's politics, markets, and eCONomics.
Incredibly well put.....
One word: SWAaaaG
Why does everyone in the financial world with the name of Jamie act like a giant cunt?
You have a better question...
Some of us Jamies are real pricks! [Except me, of course. ;=)) ]
-Fights will go on as long as they have to.
'don't take any guff from these fucking swine'
Bullseye.
That was an A+, top shelf, master of disaster, ball busting, knock em in the cunt, don't sleep, over the top, elegant, dead fucking nuts correct, lick my ass, if you blink you die, over the top, irrefutable, logical masterpiece of the first and highest order response that should be regarded as the mother fucking shit you cock sucking pussy ass wanna be investards.
How come a boy named Jamie always grows up to be a slime ball?
No Matter what ZeroHedge Reports(which is mostly to scare people and bearish news) The Market always goes up in a straight line. Balls to ZH.
So you're just here to save a few souls or what?
Who wouldn't rather be regulated by the SEC? It's dangerous if you have to play for keepsies.
"is all your care about"
you
http://i3.kym-cdn.com/entries/icons/original/000/000/554/facepalm.jpg
Fight Club, bitchez!
TD: "Now, a question of etiquette - as I pass, do I give you the ass or the crotch?"
Bravo. Drew them the picture and nailed it into their foreheads.
They will, of course, pay no attention, not even when we're stepping over the rubble of their leftover firms, picking up spent brass as the only thing of lasting value left behind.
"What is most ironic in all of this, is that the second before you pull the plug on your algos for the last time, as the hollow market collapses under its own weight, you will wish that Zero Hedge had been regulating you..."
This is the most awesome smackdown!
Rah Rah Go Go Yeah ZH!
Tyler for prez!!!!!!!!!
Or at least VP for Ron Paul...
I am very angry. I would not have been nearly so polite.
Poetry for a Tuesday night. Thanks TD, where/who ever you are.
Dear Mr. Soldyoursoulaway,
That dull ringing in your ears, and the rapidly swelling bruises are the result of being bitch slapped...
With. Both. Hands.
Tyler,
I for one was holding my breath a little as I read, for fear that your diatribe would peter out or you would place an odd word or disconnected thought somwhere which would severely depreciate your intent.
By the end, I think I forgot to breathe again. As a word smith, and as a true intellectual, you sir have set a bar by which others will point to and say "In 2012 one man said what needed sayin, and no one has done it finer or as succinctly since".
I would clap, but it seems too petty a thing for what you have done. I can only say "Thank You".
Bravo Tyler - my salute for a great response. I did have to take a look to see ITG's track record. 2008= -52.26%, 2009= -13.29%, 2010=-16.90% and 2011=-33.96% !! I suppose Jamie can only take partial credit for 2010 and 2011. Nonetheless, anyone with a firm with a track record that bad should sit down and shut up. Hmmm - algo vs algo and little bitch boy is getting eaten alive. Perfect - parasites feeding on one another.
Its been over 50yrs, but this article is the first to top a lecture I had at the age of 15 , from my parents on moral grounding and responsiblity's in life.
Screw regulation let just start a 'lynching'......mobs are after all, also a market responce. As is drinking and making jokes ...at the after lynching party
Very well said Tyler.
A good moment to thank you for the work you put into getting noticed by regulators, but more importantly informing readers of Zerohedge.
Ridiculous monster beatdown of the highest magnitude. Jamie is a girls name.
You can't be 'regulated' by a 'free market' that's just blashphemy!
I love this.... This has the next black swan written all over it.... Screw this, find them out of the money options and wait for the giant flash crash.
Absolutely great piece of work...Jamie Jamie you will regret the day ZH was your regulator....algo yourself to oblivion
I'd rather be regulated by the SEC too :)
"I am fond of saying I am not a huge regulations guy but I am a fan of regulations at an appropriate level that boosts confidence."
I could write an essay on this sentence and how the principle behind it has lead us to the capital market clusterfuck we now find ourselves in.
Regulatory oversight is not supposed to be some confidence game designed to maximize the flow of suckers.
I'm sure with your brilliance you could write an essay to prove the contrary as well. The paradox of human existence is that "rational self interest" alone as social dynamo in the "ideal" market is as real as Utopia; Galahad/Holy Grail and John GAlt, the ideality; the Crusades and the Oligopoly market, the sad historical reality.
Dreams are dreams until life makes them into social screaming reality. We are all victims of this conundrum; and the fight never ends.
Ideal unregulated markets? Philosopher Kings? Popes who serve simple man? ALtruisitic nation-states?
Show me a true ethical believer in life and liberty and he will have to be OUT of the political power loop, an ascetic sitting under his tree...But that is not where we all simple humans live. We are in the world of power and natural justice; all political justice is thus contrived to curtail the might of "natural" justice. Thats the legacy of civilization and it is imperfect and will stay so.
So words, words, words are the meat of our ideals, but reality imposes choices which are never perfect...Poet and Lawyer, you should know that intimately.
Tyler ,Zerohedge its working .............Thanks
Truth to these people is like throwing water on the wicked witch,they cannot take or handle the truth so, they try to discredit those spelling it out.Much to their dismay
Cheers to all
John Gault couldn't have said it better! Who is Tyler Durden?
Just a reminder of reality : Ayn Rand, creator of John G had one true son : Alan Greenspan. Welcome to the real world of Atlas unshrugged.
Bullshit. Alan G devoted his life's work to blowing fiat bubbles.
A disciple of Friedman, yup. An Austrian, nope.
here are the facts on that, as seen through the liberal lens I do admit :
Explaining Alan Greenspan - Disciple of Ayn Rand or George Bush? Or Both?
Fantastic comeback.
I think we have reached peak SHITI (Suckers Having the Illusion They are Insiders).
Shrill is no longer just for raving liberals. Those in the SHITI class are experiencing a nagging sensation that their Insider membership card was printed with disappearing ink.
Fading back into the dark and slimy obscurity from which they emerged, they shout "I'm one of you guys. Really I am. Please let me back in the Insider Club. You're my friends aren't you? You'll take care of me, won't you? Tyler and those ZH'ilantes did this to me!"
Beautiful
Brave stand of utopian candour in the land of hypocritical slant and hegemony chant.
Utopian candor?
And what of the world of cental planners and technocrats? Doesn't success in their world depend upon perfect information, omniscence and total compliance?
Sounds awfully utopian to me, until of course their plan goes to shit. Then if history is any guide, non-believers start dying en masse. And yet the hypocrites label free exchange "utopia".
A free market is not all utopian, its proponents accept imperfect outcomes in order to ensure that the rights of the individual and the rule of law stand. The natural law of course, not unlawful statutes that run counter to it.
Where do you see a free market in this world apart from your local village market?
Jamie speak, simplified translation:
"I for one would prefer to be regulated by the SEC and not by ZeroHedge."
Equals...."We can slide a lot more shit past the SEC than we can get past Zerohedge without being called on it..."
Well said!!!
ZH at it's very, very best.
It's been my privilege to make your acquaintance and share these bits and bytes of history.
Thanks TD!
Bravo Jamie!
Skimming, scalping, front-running, quote-stuffing, bail-outs & derivatives to kingdom-come are all good
Its the home-owner that's to blame - it's the home-owner that's victimized Wall St!
Hugs'n kisses Jamie (you too Becky!) - keep up the good work ;)
- Uncle Warren
HTF is evil, but profitable!
http://www.jinrongbaike.com/ http://www.cnhedge.com/
way to go, Tyler
Fuck yeah ! Go Tyler! Your vision of a free market gave me a wet dream.
Goodbye Whitecap, hello ITG...love, Jamie and friends
July 19, 2010
http://www.itg.com/news_events/Whitecap-Client-ITG-Announcement.pdf
excerpt:
I was gonna do a couple trades today, but, after this piece Tyler I don't think I will, it just wouldn't be right. I will pay homage.
Ok who's next, line up here, turn around and face the camera,,,,,,,,,,,,,,,,,,,,,
Excellent Tyler ! Thanks for all you do!! :)
Freedom of speech scares the hell out of the regulators and their schemes. They hate this site as the Tylers expose their schemes. They want the sheeple asleep to their schemes as they continue to herd them into fiefdom.
Keep up the good work.
"the collective rational whole of countless unitary market actors."
Idealistic nonsense. The rest is pretty good. Maybe a tad butthurt.
then you don't understand the market. if you have ever been in a crowd so large and tightly packed you would understand how a market is suppose to work. a few people push and the push multiplies, gains velocity eventually pushing the entire crowd in one direction with the people at the end of the push having no choice but to move with the wave. there can be several waves of pushes going in many different directions but there is usually a general direction until the push stops and takes another direction. it is uncontrollable . it is order out of chaos. one person or group of people cannot influence the crowd directly. it has a life of it's own. the most you can do is bail out to the side of the crowd.
what has happened over the last 40 years is a consolidation of the crowd into a much smaller group of proxies rendering the crowd into a roomful of people easily gaming and manipulating the market into whatever direction they decide they want to go. an independent crowd member then has to either join one of the proxies or attempt to decifer the game the proxies are playing. if you joined them you have been crushed or will be crushed for the last 15 years now. if you gamed the proxies, the last 15 years would have been the easiest money you ever made from the .com bubble to the real estate bubble to the pm ramp and the bond market.
right now is the scariest the market has ever been, much scarier than 2008. they are losing control of the game they so confidently conned everyone with. the market is coming back to haunt them. the crowd is gathering again. this time the crowd is literal. they are in the streets. critical mass is only seconds away. the direction is clear. each person has their own reason for being there coalesced into a single cause. the commodity traded will be blood. the victim is the status quo and it's defenders. the market rules.
Truth, biTcheZ!
No group of guys, no matter how smart, educated and experienced, can substitute for the collective brilliance and stupidity of millions of suppliers and consumers. Central planning does not work, only the free market. Lesson in reality coming soon to a theatre near you.
The free market also provides a cure for incompetent criminals. It's called "bankruptcy," where the scoundrels' assets are auctioned off for pennies on the dollar and put back into productive use by honest, competent individuals.
ITG reminds me of Skilling when an analyst questioned Skilling's financial report to them. Instead of explaining (which he could not do since he knew the numbers were all fabricated), he (Skilling) started cursing the reporter calling him a "dumb f*ck....."
That's when I dumped all my Enron. When someone resorts to this tactic instead of a logical reply, you know there is some nest of roaches hiding there.
Good work Mr Tyler!
Tyler,
That is one of the most eloquent pieces by you I think I have ever read on ZH. Superb.
DavidC
Greece Defaults! :-P
Tyler the Incorruptible :)
I think being regulated by ZeroHedge would be rather pleasurable. We all could use some brutal honesty now and then.
"but when they blow up, as they always inevitably do in a world in which they know that the politicians and regulators they have purchased have no alternative but to rescue them, they blow up. Period. Game over" -
After reading this post, I immediately though about this and watched it for a third time:
http://www.youtube.com/watch?v=5V3kpKzd-Yw
The man has the ear of both CONgress and The Administration, openly states that they have no interest in fixing things and/or planning for bad unintended consequences from the actions of today, that will be sure to hit us tomorrow.
"Blow up" indeed.
Big Jim McBob: "Boy, he blowed up good!"
Billy Sol Hurok: "He blowed up real good!"
http://www.youtube.com/watch?v=KUtdXzBSVaU
Can't add anything of value, other then to give you my sincere thanks and appreciation for such an intelligent and truthful biting editorial! March on! Fight the good fight! Keep it going! Thanks Tyler!
do you guys here actually listen to yourselves ? wow ...
you actually think HFT traders buy off regulators ... I assume they use the silent black helicopters to ferry the wads of cash ...
all of this imagined market manipulation leads me to this conclusion ... you have a losy record as traders and everytime you place yet another losing bet you just have to find some villian to blame for your failure ...
you technical traders always think you have found the hidden signal in the chaos and if someone else would just stop manipulating the market you'd be rich ...
In other words, regulations aimed at benefitting his business rather than protecting the markets. I'm sure Jamie is fully prepared to tell the SEC exactly how those regulations should be structured. Their arrogance is so blatant. The fact that they don’t even see it in themselves is almost funny.
I bet.
Zerohedge and Tyler - I am SO proud of you guys.
A peer to peer version of the internet is already under development specifically to bypass SOPA, ACTA, Canadian Bill C-30 and any other attempts to silence sites like zerohedge. See http://www.reddit.com/r/darknetplan/
Great response. Thank you!
What ever happened to the old custom of free markets and civil law? I know these are antiquated and useless is a "globally managed" economy, but dang a little common sense would be a boon these days.
To state the extremely obvious: experts on "regulation" are simply experts at drinking their own polluted bath water and add no value to a free and mature society.
Wow! That Tyler Durden algorithm is just so awesome! I wonder which quant wrote it?
Damn.
I have a slightly different take than the tylers on this.
But first, let's get a more complete idea of that hypothetical scenario. What would in practice be the typical reaction, if a market would run without external interference?
Well, as you outlined, abusive forces would at first raise and then destroy themselves (this btw i would NOT call a "a market that regulates itself", because in that case, it isn't regulating anything... instead, it is selfcorrecting by plain logics of interation and causality).
Okay, so what happens then, after that "correction"? Answer, a public outcry will happen, that this must be prevented from happening again - or in other words: regulation.
So, let's assume they then at first simply abolish HFT, by imposing a limit to maximum time-resolution for all exchanges (thus, an upper limit to the frequency).
And at first everything seems fine, and people get motivated of it working. Motivated to dare doing a bit more.... other temporary malicious tactics appear, so people say "regulate them too!"..... and thus regulation and especially it's complexity and selectivity.... increases further, which also increases the potential of abusing regulation in a selective way.... and while regulation gets corrupted, past regulations annoying to the abusers, will either be completely removed again, or exceptions be introduced.... thus refactoring the ruleset to be a selective weapon.... the same shit as we have now....
...at which point, history repeats itself again.
Now, ZHers will probably think, that the mistake happened at the point where regulation was reintroduced again, because people simply didn't get, that it DID work... that it "corrected" market. Yes, it did work. Yet how efficient did it work?
Let's take that "upper time-resolution limit"-regulation as an example: Could that be abused in a selective way? If the market were totally unregulated except of this generic rule, would it not make the overall market process more stable, without introducing risk of corruption?
Here's my take:
Both "the sheeple" and "ZHers" got it wrong. The sheeple would show no restraint in constructing regulations, not consider complexity and potential for abuse (in other words: no regulation of regulation)... as a result, their approach will result in the same shit as today.
ZHers on the other hand would generally abolish regulation alltogether, citing the dangers of corruption, abuse and incompetence as a reason. This approach would prevent the corruption of regulation - at least officially (hint: monopolies at least temporarily, are NOT impossible in an "unregulated" market)... but at the same time, the price and intensity of the "corrections" would be very high.... higher than the population would accept....
...which in turn would then boost the previously mentioned "sheeple" approach.... which too will then critically fail, which will then boost the ZH approach..... which then too..... warning: iloop of failure detected.
What would i do?
A "mostly unregulated market". I would avoid most types of regulation, that requires active "per-case" decisions (and thus allows selective regulation). I would however consider a handful of very simple, generic, and "hands-off" regulations.... like for example, that time-resolution thingie.
Or even shorter: I think that "central regulation" should be applied to handle a few CENTRAL issues...... NOT invididual issues (that's the job of individuals).
Address generic things generally. Address individual things individually. If you start doing generic things individually, or individual things centrally... bad stuff happens.
I am so glad to have found Zero Hedge where the Truth IS the Truth and not just someones agenda.
4 thumbs up !
Perfect. Keep stickin' it to the a-holes Tylers - long live ZH!
God bless Zero Hedge and all it represents.