Quote :

"Well, as more accurate prices are a good thing, then trading on illicitly acquired but accurate information is good for society. I admit trading on false information (which tends to spread that false information to others who watch you trading) does make society worse off, so while attempts to corner a market in such a way always fails, usually ruining anyone that attempts it, the attempt does harm society at large."

This would be the argument for insider trading. I read plenty of valid arguments for insider trading. Here is what I am talking about:

Market participant A has several standing limit sell orders, one at price H and one at price L (H>L)
Market participant B places a market buy order in their e-trade account.
HFT machine sees B's order before A does. HFT machine buys all shares A is offering at price L. Market participant A then buys his shares at price H-$0.0001. From the HFT machine.

This activity benefits no one aside from the owners of the HFT machine. It does not create any value for A and B. It decreases the market efficiency for A's and B's orders.

8/1/2011 9:08:16 PM

I don't necessarily think that taxes should be raised, but the form of tax cut makes a difference. #2 and #3 encouraged people to put money into asset price bubbles. I would be more in favor of a form of tax cut that increases the probability that saved money fuels new productive activity rather than the growth of asset prices.

8/1/2011 9:52:12 PM

Quote :

"of a form of tax cut that increases the probability that saved money fuels new productive activity rather than the growth of asset prices"

The fuck?

[Edited on August 1, 2011 at 10:14 PM. Reason : .]

8/1/2011 10:01:35 PM

Quote :

"Should we begin taxing social security benefits?"

they *are* taxed, although the threshold is much higher than for most types of income

[Edited on August 1, 2011 at 10:02 PM. Reason : ^guess what loans are backed by

8/1/2011 10:01:50 PM

Revise your roll eyes

8/1/2011 10:14:40 PM

Quote :

"This activity benefits no one aside from the owners of the HFT machine (C). It does not create any value for A and B. It decreases the market efficiency for A's and B's orders."

A, B, and C trade on a privately owned exchange. If the behavior of C is in fact causing greater harm to A and B than it benefits C, then they can appeal to the exchange operators to ban or otherwise regulate the practice. Such is the proper forum for such regulation, not Congress.

After-all, we are not experts, there is a chance you are wrong and banning HFT will harm traders in the long-run. Far better to allow some exchanges to ban the practice while others do not, then allow traders to choose which exchanges they prefer.

That said, your description of market operations is wrong. When B tells his machine to buy, his machine will have already refreshed the list of standing sell orders and I strongly suspect such multiple trades as buying both of A's sell orders instantaneously, providing no time for C to do anything.

8/1/2011 11:40:40 PM

Quote :

"A, B, and C trade on a privately owned exchange. If the behavior of C is in fact causing greater harm to A and B than it benefits C, then they can appeal to the exchange operators to ban or otherwise regulate the practice. Such is the proper forum for such regulation, not Congress. "

Yes, they can and they have. And congress has been a part of it at times too. Why can't people just solve their own problems? I don't know.

Quote :

"After-all, we are not experts, there is a chance you are wrong and banning HFT will harm traders in the long-run. Far better to allow some exchanges to ban the practice while others do not, then allow traders to choose which exchanges they prefer. "

I would never suggest banning the practice of HFT in and of itself. HFT as a concept is good. The problem is abuse of the system, and the fact that the powerful and well-connected set up structures to siphon money away from those who intend to work, invest, and receive income and security from their savings.

8/2/2011 1:51:10 AM

Quote :

"For what purpose are we taxing capital gains at a lower rate than any other type of income?"

Because the rich people that control both parties demand it to be so. duh.

Quote :

"We taxed at an extraordinarily high rate from 1940 to 1963. THIS PAID OFF OUR DEBT."

No, that, coupled with not having a shit-ton of entitlements come due yet paid off our debt.

[Edited on August 2, 2011 at 2:51 PM. Reason : ]

8/2/2011 2:36:43 PM

If you are going to tax capital gains then I think you must not be able to write off the interest you pay others.

8/2/2011 4:28:10 PM

I think the worst thing about this whole debate is the way it's framed. "Spending cuts" are never actually cuts - they're just reduced projected expenditures. Why would anyone in their right mind believe that the government would stick to these promises? Is anyone here convinced that, for the first time in history, politicians on the aggregate are going to draw a line in the sand and do what's right?

Somehow, the American people are going to have to get real. Cable news and the government are in full on plunge protection mode, trying to instill a false sense of security to prevent bank runs.

8/2/2011 4:37:26 PM

Bank runs?

This is why I never take you seriously.

If the US government collapses and the dollar drastically drops value

why the hell would I run to the bank to get toilet paper?

8/2/2011 5:37:55 PM

That's not the order in which it would (or could) happen. You'd have bank runs before there was any kind of flight inflation, probably before there was even a collapse of the government.

The point here is that the banking system is incredibly unstable right now. If it were not unstable, banks wouldn't need a persistent lifeline to stay afloat.

Bank of America is a great example. They're in serious fucking trouble and the mainstream media isn't making a peep. Wonder why?

8/2/2011 6:12:19 PM

Quote :

"The point here is that the banking system is incredibly unstable right now."

By what metrics?

Quote :

"They're in serious fucking trouble and the mainstream media isn't making a peep."

By what metrics?

8/2/2011 7:10:44 PM

Quote :

"By what metrics?"

By the fact that that many of them required bailouts, most are still taking generous amounts through the discount window, and that there's still a glut of bad home loans on the market that have yet to be dealt with.

If the Fed were to ever raise interest rates, the bank failures would begin rolling in.

On the Bank of America thing, there's always a chance they could get off the hook, but they're being sued by Countrywide investors for fraud, which I'm sure you already know about. Basically, Bank of America is accused inflating their balance sheets. Should it come to light that this was indeed the case, you can bet people would be trying to get their deposits.

[Edited on August 2, 2011 at 7:31 PM. Reason : ]

8/2/2011 7:26:19 PM

So, no specifics? No analysis of their book? No considering that absent the charge they took to get angry buyers of Countrywide bullshit out of their hair they made a 'profit'?

The only way you can begin to know what shape they are in is if you knew the make-up of their asset portfolio...and well... .gov has made that impossible to know.

Are you mayhaps saying they are dying because their stock price is struggling mightily?

8/2/2011 7:30:11 PM

You undoubtedly put more weight in stock price than I do. Some investors seem to think Bank of America isn't on the most stable ground though, which would explain the decline.

8/2/2011 7:34:35 PM

It's not that I put more weight in the stock price than you do. The point is it is a quantifiable metric. You offered nothing other than conjecture and hyperbole and the only reason I think you could make the statements you did is based on the stock price because that is about the only info you have...or, do you have other info you haven't presented?

8/2/2011 8:39:47 PM