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Wall Street is Unethical

Deacon923

Deacon923

Scooter Banks
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And in other news, the sun rose this morning. Still the article is interesting and has some interesting links. http://www.theatlantic.com/business/archive/2015/05/seven-years-later-wall-street-hasnt-learned-anything/393623/

So how does the financial-services industry view its own behavior, legally and ethically? Not so great, it turns out. Nearly half of the respondents felt that it was likely that a competitor has engaged in unethical or illegal activity in order to gain an edge. Perhaps more shocking are those who say they’ve witnessed such wrongdoing: 23 percent reported personally observing or having firsthand knowledge of misdeeds. That number jumps to 34 percent when looking only at those earning more than $500,000, suggesting that enhanced status and earnings bring a higher likelihood of witnessing wrongdoing.
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Not really surprising since the financial sector is not a place where people start a career because financial engineering is their true passion and calling in life, but where you start a career because you want to Make a Lot of Money. When the whole and entire point of the job is to Make a Lot of Money, full stop, it's unsurprising that a lot of the people involved are the kinds of people who will do anything it takes to Make a Lot of Money.
 
That can't be right, but capitalism is great and everybody benefits when a few people do whatever it takes to Make a Lot of Money.
 
I'm reading Michael Lewis' latest book "Flash Boys" right now. It's about the gaming of the system that high frequency trading firms were doing by just being a handful of milliseconds faster than everyone else. Really interesting read - as was "The Big Short". I'm no econ guy, but Lewis is great at explaining complex financial stuff in every day English and is pretty entertaining at the same time.
 
No Shit Sherlock with two new threads this morning.

Up next: Liberace Gay? New comments from former housekeeper.
 
cville deac said:
I'm reading Michael Lewis' latest book "Flash Boys" right now. It's about the gaming of the system that high frequency trading firms were doing by just being a handful of milliseconds faster than everyone else. Really interesting read - as was "The Big Short". I'm no econ guy, but Lewis is great at explaining complex financial stuff in every day English and is pretty entertaining at the same time.
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yeah, I really enjoyed both those books. The HFT stuff is really indefensible. It's just a larger, faster, more complex version of the scam the guys were running in Office Space to take a penny off every transaction.
 
PhDeac said:
That can't be right, but capitalism is great and everybody benefits when a few people do whatever it takes to Make a Lot of Money.
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Capitalism is great, it's the best engine the world has ever produced to improve living standards and build national wealth. But it has to be constrained and controlled by a reasonable system of law enforcement to prevent abuse of inefficient markets for the sole benefit of those with power, wealth, or political connections.
 
Deacon923 said:
yeah, I really enjoyed both those books. The HFT stuff is really indefensible. It's just a larger, faster, more complex version of the scam the guys were running in Office Space to take a penny off every transaction.
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is it, though? his point about everyone paying a "tax" is kind of valid but I'm a little hazy on how it's really killing the average guy. How is it any different than the gaming old-timey stockbrokers would do when making the market?

I found myself #outraged when first reading it but then kind of shrugged my shoulders by the end of the book

Need smarter finance boardsters to chime in
 
Deacon923 said:
Capitalism is great, it's the best engine the world has ever produced to improve living standards and build national wealth. But it has to be constrained and controlled by a reasonable system of law enforcement to prevent abuse of inefficient markets for the sole benefit of those with power, wealth, or political connections.
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I'm pretty sure your support of job-killing regulations makes you a socialist. Nice try, commie.
 
Meh, if you don't like the market, don't participate in it, nobody is forced to. Complaining about it comes off like someone going to Vegas and complaining that the electronic poker machine is rigged. No shit. It is legalized gambling, that is all that it is. It is a risk, and everyone knows that going in; some people do well and others do not. If you don't like that reality, don't play the game. Go farm some peanuts or something.
 
2&2 Slider To Leyritz said:
Meh, if you don't like the market, don't participate in it, nobody is forced to. Complaining about it comes off like someone going to Vegas and complaining that the electronic poker machine is rigged. No shit. It is legalized gambling, that is all that it is. It is a risk, and everyone knows that going in; some people do well and others do not. If you don't like that reality, don't play the game. Go farm some peanuts or something.
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I'm not sure were you can go to avoid participating in the US economy.
 
2&2 Slider To Leyritz said:
Meh, if you don't like the market, don't participate in it, nobody is forced to. Complaining about it comes off like someone going to Vegas and complaining that the electronic poker machine is rigged. No shit. It is legalized gambling, that is all that it is. It is a risk, and everyone knows that going in; some people do well and others do not. If you don't like that reality, don't play the game. Go farm some peanuts or something.
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i think that's a little too far.

yes, the question is whether the HFT "rigs" the market to the detriment of non-institutional investors
 
2&2 Slider To Leyritz said:
Meh, if you don't like the market, don't participate in it, nobody is forced to. Complaining about it comes off like someone going to Vegas and complaining that the electronic poker machine is rigged. No shit. It is legalized gambling, that is all that it is. It is a risk, and everyone knows that going in; some people do well and others do not. If you don't like that reality, don't play the game. Go farm some peanuts or something.
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I mean.... even I think this statement is crazy
 
ImTheCaptain said:
is it, though? his point about everyone paying a "tax" is kind of valid but I'm a little hazy on how it's really killing the average guy. How is it any different than the gaming old-timey stockbrokers would do when making the market?

Need smarter finance boardsters to chime in
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that is the point. The shaving a penny off every transaction scam didn't kill the average guy either. This kind of scam disguised as a transaction is what economists call a "rent" - an unearned windfall accruing to the owner of a particular asset or technology. Each individual transaction doesn't hurt anyone (much), aggregated together it sucks a ton of cash out of the economy to no productive purpose.
 
Deacon923 said:
that is the point. The shaving a penny off every transaction scam didn't kill the average guy either. This kind of scam disguised as a transaction is what economists call a "rent" - an unearned windfall accruing to the owner of a particular asset or technology. Each individual transaction doesn't hurt anyone (much), aggregated together it sucks a ton of cash out of the economy to no productive purpose.
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whose money?
 
ImTheCaptain said:
is it, though? his point about everyone paying a "tax" is kind of valid but I'm a little hazy on how it's really killing the average guy. How is it any different than the gaming old-timey stockbrokers would do when making the market?

I found myself #outraged when first reading it but then kind of shrugged my shoulders by the end of the book

Need smarter finance boardsters to chime in
Click to expand...

I was talking to my financial investing guy, and he agreed that the HFT rigging doesn't affect folks like you and me at all. At least not when we're buying 50-100 shares of something, which is what I'm typically doing. But what they're doing is essentially robbing hedge funds and mutual funds which purchase in high volumes. What they're doing by being milliseconds faster is discovering a hedge fund is making a purchase, but they get in first and buy it and then sell it to that hedge fund for fractions of a penny more. There's no risk to them because they know that hedge fund wants to make that purchase. And while the amount is so small in 1 transaction, if you're doing thousands of transactions per day, over a course of a year it adds up and a HFT firm can be making billions per year through this manipulation. Is it morally worse than the old-timey stuff? No, but it's the same - just the most recent way to scam the market. So yeah, I think it's pretty outrageous and should be illegal.
 
well deserved though. it was a good one.
 
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