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Comment Re:Won't work (Score 1) 342

Something is fairly priced if it's at the highest price a buyer is willing to buy at and the lowest price a seller is willing to sell at. In your example, how high are you willing to buy? From his point of view, he's willing to sell at 35.2 given current market conditions. You buying that much changes those conditions. I think it's fair for him to pull. When you see the market, you see a system before you affect it. Once you affect, I think it's fair for the system to change. You buying should raise the price, and it does. This is no different than what usually happens in the market, only at a more granular and faster scale.

You have no inherent right to that liquidity, just like he has no inherent right to your flow. If you sent a market order to take out 35.2, don't be surprised if you pay more for the liquidity. If you're sending a market order, you don't care about the price, is what you're telling the market, so in an efficient market you should get filled at the lowest price someone is willing to sell to you, and you should get the worst price the market has to offer. I think that's fair. If you care about the price and send a limit order, then yes, someone has to be willing to sell to you, with the caveat that now there's information in the market about a new buyer, so people should be willing to sell to you only with that information in mind.

What you want is the benefit of a dark pool in a public market, you want to be able to buy across exchanges atomically without any information being available to any seller before all your buying is done. That's not what a public market should do, in my opinion. It should show any new information available as quickly and as broadly as possible, and that's what HFTs are essentially doing. They are making money by removing the information inefficiency between markets.

Comment Re:Won't work (Score 1) 342

Why is it not fair?

I'll tell you what will happen if you add that rule: There will be no market for you to hit at 35.2 in the first place. The extra liquidity provided by the HFT let's you get part of the trade at that price. Why are they obligated to trade with you? If you really want to buy at 35.2, leave your order there. If someone else wants to trade with you, great, you'll get your fill. If not, then I don't see why anyone should.

In your scenario, you got part of your trade at 35.2. That's great. If the liquidity provider hadn't been there, the market would have been wider to begin with, and unless another big player like you wants to take the other side at 35.2 (lower probabililty than a market maker being there), you'll be paying more for both legs of your trade anyway.

Look at it this way: the guy you just bought from is now short, and knows there is someone out there willing to buy more than he got hit for. He's in a tougher spot than you (that's market making), he needs to buy back as well, and you can probably afford to pay an extra tick and still make money. If he pays an extra tick to close out of his position, he's out $1000. If he makes money, great for him, but it's no difference to you. You're taking advantage of the liquidity he's providing. If he wants to cancel to reduce his risk, fine. You still got a cheaper price on part of your trade than you would have without him being there. How do I know? Because he's the only one at that price in your example.

What you want is the same liquidity, but without the chance of that liquidity going away when you take an action in the market. In essence, you want public exchanges to act as dark pools, you want your buying interest to only be reflected in the market after all your buying is done. If you do that consistenly, there will be no point to market making, and watch the markets widen again, and you having to call brokers and pay through the nose for them to handle large volume for you. The current system is better.

Comment Re:Not smart Enough? (Score 1) 1276

This. I had a conversation with a libertarian, Ron Paul fan, friend of mine that was using the fact that the chairman of the Federal Reserve is appointed, not elected, as a dig against the whole monetary system. My replay was "Good." Essentially, you want the important people in government appointed, and not elected, since people don't vote for technocrats. Anyone good enough and knowledgeable enough about the field their getting appointed to is, generally, not very good at "identifying with the common man", or any of that crap that really isn't useful for setting policy, just for selling it.

In my view, a politician's job is to make experts' recommendations and policies palatable to the masses and democracy gets its value not by providing power to the people (who, if in total control, will probably end up with huge government handouts and unsustainably low taxes, ala California), but by providing the illusion of control by allowing the peaceful deposition of leaders and, therefore, providing social stability, since armed insurrection becomes less necessary, and less of the state needs to be applied in supressing rebellion. This, combined with a predictable and fairish legal system, is, in my opinion, the real value in democracy.

Comment Re:China doesn't import much from the us (Score 2) 240

And the US is still first in nominal terms (which, considering the messed up exchange rate with the yuan and the import restrictions in China, might be as relevant as PPP). And with four times the US population. A wise man once said, if you don't produce more than another country when you have four times their population, you're doing something wrong.

China's economy is about 50% manufacturing, the US's it's more like 20%. But the US, per capita and in PPP terms, still produces 4 times as much as China does. China has a lot of catching up to do, especially in per capita terms, and needs to catch up before it's demographics start weighing on it, Japan style.

Comment Re:The only insanity is seeking more sickness (Score 2, Interesting) 270

"the failures coming when each and every one of the industries you mentioned had heavy regulation induced and large government players involved (like Fannie Mae/Freddie Mac)"

Whoa, whoa, whoa.... Fannie and Freddie didn't cause the subprime mess. They were actually pretty late in coming into it. I was involved with that industry for three years, and I don't remember ever seeing a subprime loan bond issued by those agencies. The bonds I do remember seeing are a who's who of the banks and investment houses that closed down (with the notable exception of Goldman).

In fact, a big part of the failing in that industry is to do to the agencies that are the market's attempt at self-regulation: the rating agencies. The pain would not have been so widespread, and the flow of capital would have been much more limited, had the rating agencies correctly modelled stresses on the portfolios of these bonds. The entire industry CDO industry would have been nipped in the bud.

But they were making a mint with CDO issuance (accounting for a small part of their business but a much larger part of their fees) where they were paid by the issuer of the bonds, instead of investors! Imagine how comfortable you would feel buying medication from a company that has three different regulators to pick from and has to pay the regulator for the analysis done on their drug, and the regulators make more money the more drugs get released by these companies.

Some of the problem was caused by regulation, like the need to mark to market, but these regulations exacerbated a problem that was created entirely by the industry itself: it was a classic case of no one bothered doing the due diligence on the loans, because everyone figures someone else had done. The loan issuers figures no one would be buying the loans if they didn't want them, the securitizers were expecting some basic standards in the underwritings of the loans, and the investors were expecting the rating agencies and the issuing companies to ensure the loans were as expected by the product they were buying (the whole incentive, of course, being that the company wouldn't shoot itself in the foot by issuing securities backed by bad loans, the rating agencies were putting their reputations on the line, etc). Of course, in the end, none of these systems of internal checks worked, and companies were actually willing to risk everything they were supposed to be protecting for the money they were making for the simple reason that companies are run by people. As long as people can be irrational, measure risk incorrectly by favoring the potentially more profitable route (ask casinos why they are still in business when everyone knows they skew the odds in their own favor), markets will never be the efficient panacea some libertarians seem to think it is.

The market's role is to match demand with supply, and is best left on it's own when doing that, but "the market" isn't ephemeral, it's people. People always need to be regulated because with the market we're trying to channel their self-interest into common good (by having them provide goods and services others need/want), but that same self-interest can cause the system to break down if not managed. The government's self-interest in getting elected and always being blamed when something happens makes it the natural player in being that regulator.

Comment Three questions (Score 1) 1376

Although I probably know the answer to the first one:<BR>

1)  Is it strictly blasphemy against Christianity?  Or any religion?  So would, say, a certain book that refers to a particularly religion's verses as being satanic be outlawed in Ireland?

2)  Kind of follows from the first one in a way.  Does that mean the Irish judges will now be deciding what is blasphemy or what isn't?  If they cast a wide net on affected religions, does that mean that they'll need to be theologians on several major religions for this law not be the so obviously biased for Christians?

3)  Scary freedom of speech backpedaling and medieval thinking resurgeance aside (two dumb enough reasons not to do this), is this a monumentally stupid law to pass in a country that not so long ago and for the longest time had half of the country at the other half's throat based on to which Christian sect they belonged?  The first Protestant judge that passes this judgement on a Catholic or vice versa will, I expect, be somewhat explosive.

Comment Re:Why stop online? (Score 1) 597

You seem to be under the impression that the Russian retreat and drawing in of the Germans to Moscow was done on purpose. The massive encirclements of entire Russian armies would seem to contradict that assertion. They just have so much land and people that they can afford to lose more than most, and accidentally make the other "win himself to death".

Comment Re:I just summoned some 'memories' (Score 2, Insightful) 381

That's exactly how I see it as well. I think the posters above can only calmly reach their conclusions by not really internalizing the fact that they're going to die. I did, and I wish I never had, because it's hard to think calmly about death after you've made that logically emotional leap (i.e., when you "realize" that what you've been thinking about this whole time is actually "real"). That's why I only go to bed when I'm really, really tired. I get to thinking about it when lying in bed, and it will keep me up all night.

And, you're right, the eternal afterlife is only slightly better, at least in a finite universe of slowly increasing entropy...

Sucks to realize this is all real. I really envy (as much as slashdotters ridicule) people that can take comfort in religion on the matter. There's no prize at the end for realizing the awful truth, and at least they'll be happier, on average, than I'll be during my short (always too short!) life.

Submission + - Who's right about climate change?

Gauchito writes: I've been following news about global warming/climate change for several months now, ever since I noticed the increased amount of record weather events and noticing some local peculiar weather myself. I've been an avid reader of and On the latter site, the most recent news article refers to this incredibly disturbing report about the current climate situation and how even our most ambitious current plans fall far short of what's required to prevent a catastrophe.

I would like to know the slashdot community's opinion on the urgency of the situation. I was personally hopeful that the rising awareness would be enough for us to handle the problem appropriately, but with so many opinions about it floating around the web, it's hard to determine who's more in the right and who's simply being an alarmist. This is, after all, the site of "stuff that matters", and what matters more than this these days?
The Almighty Buck

Submission + - Coping with climate change

Gauchito writes: Although the worst effects haven't been felt yet, the new IPCC report clearly states that we can all expect a severe climatic catastrophe soon. The amazing inability of people to agree on the problem and on action is depressing. All this leads me to believe that catastrophic climate change is unavoidable, and will probably happen quicker than scientists currently believe (they seem to be finding more positive feedbacks than mitigating ones). With all that in mind, how are you preparing for the changes to come? How are you preparing your kids? What does the fraction of mankind that stands a chance of surviving the change have to do to continue in an unrecognizable planet?

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