Taxes!

[Anonymous]

[quote]If you log into your etrade account, and purchase 100 shares of Ford, it does nothing to further economic development. It has no effect on whether Ford expands their workforce or opens a new plant. It provides no new capital. Same logic applies to the billions of dollars that are traded daily on the world’s exchanges for common stocks, mutual funds, ETF’s or the secondary markets for fixed income securities. IPO’s, initial direct investments in new companies provides that capital. A tiny fraction of the total invested capital.[/quote]

This is an oversimplification. True, trading shares that have already been issued do not directly provide additional capital. What it does provide is liquidity – something that is essential in capital markets.

If there were not an active market for a security, investors would be reluctant to buy it because they would be concerned that they may have trouble selling it later. IPOs and other offerings would be much more difficult, and happen far less often.

A big reason that publicly-traded companies can issue stock/bonds/whatever to raise capital is that the buyers of these securities are confident that they are purchasing a liquid investment. The existence of active markets is what gives them this confidence.

So the vast majority of trading does not directly raise capital, but it does very much “have an effect on whether Ford expands their workforce or opens a new plant.” The liquidity of Ford’s stock makes it possible for Ford to issue more.

Securities markets do not exist simply to provide a venue for gambling. This is a popular myth, but completely incorrect.

One of the biggest reasons that the US is the most prosperous economy in history is that we have the most established and, in fact, transparent markets that have ever existed. These markets give companies the ability to easily raise capital, expand their business, and (this one’s for you CAR!) hire more employees.

[an]

[quote=CA renter]I’m sure it’s better for society if $1MM is split among 100,000 people, instead of having it go to one person.

If one has to choose between giving this money to a HF trader, or giving it to a handful of start-ups, or to an existing company that wants to expand to meet demand, I would certainly prefer the latter two.

The concentration of massive amounts of wealth — at the expense of many — has never led to a good ending.

BTW, I would put Bill Gates in an entirely different category than traders. At least he *worked* to earn his money (monopolies, notwithstanding).[/quote]
Bill Gates $56B in asset isn’t all from MSFT. He used his money he made from MSFT to invest in other companies as well. Then there’s Warren Buffett. MOST of his wealth came from investment.

That $1M wasn’t given to 1 person. That one person earned it. If that person didn’t earn that $1M, there’s no guarantee that 100k other people would magically earn a combined $1M more. If you’re talking about taxing $1M from one person to give another, well, reality is not panning out like your ideal scenario. That $1M might go from one person and given to another’s pension, or what we’ve seen recently, $700B was given to a few companies. Tell me, do you think the $700B in bailout dished out by the government help society more or the $600B that Warren Buffett is raising between the Billionaires for charity?

[an]

[quote=CA renter]I’m sure it’s better for society if $1MM is split among 100,000 people, instead of having it go to one person.

If one has to choose between giving this money to a HF trader, or giving it to a handful of start-ups, or to an existing company that wants to expand to meet demand, I would certainly prefer the latter two.

The concentration of massive amounts of wealth — at the expense of many — has never led to a good ending.

BTW, I would put Bill Gates in an entirely different category than traders. At least he *worked* to earn his money (monopolies, notwithstanding).[/quote]
Bill Gates $56B in asset isn’t all from MSFT. He used his money he made from MSFT to invest in other companies as well. Then there’s Warren Buffett. MOST of his wealth came from investment.

That $1M wasn’t given to 1 person. That one person earned it. If that person didn’t earn that $1M, there’s no guarantee that 100k other people would magically earn a combined $1M more. If you’re talking about taxing $1M from one person to give another, well, reality is not panning out like your ideal scenario. That $1M might go from one person and given to another’s pension, or what we’ve seen recently, $700B was given to a few companies. Tell me, do you think the $700B in bailout dished out by the government help society more or the $600B that Warren Buffett is raising between the Billionaires for charity?

[an]

[quote=CA renter]I’m sure it’s better for society if $1MM is split among 100,000 people, instead of having it go to one person.

If one has to choose between giving this money to a HF trader, or giving it to a handful of start-ups, or to an existing company that wants to expand to meet demand, I would certainly prefer the latter two.

The concentration of massive amounts of wealth — at the expense of many — has never led to a good ending.

BTW, I would put Bill Gates in an entirely different category than traders. At least he *worked* to earn his money (monopolies, notwithstanding).[/quote]
Bill Gates $56B in asset isn’t all from MSFT. He used his money he made from MSFT to invest in other companies as well. Then there’s Warren Buffett. MOST of his wealth came from investment.

That $1M wasn’t given to 1 person. That one person earned it. If that person didn’t earn that $1M, there’s no guarantee that 100k other people would magically earn a combined $1M more. If you’re talking about taxing $1M from one person to give another, well, reality is not panning out like your ideal scenario. That $1M might go from one person and given to another’s pension, or what we’ve seen recently, $700B was given to a few companies. Tell me, do you think the $700B in bailout dished out by the government help society more or the $600B that Warren Buffett is raising between the Billionaires for charity?

[an]

[quote=CA renter]I’m sure it’s better for society if $1MM is split among 100,000 people, instead of having it go to one person.

If one has to choose between giving this money to a HF trader, or giving it to a handful of start-ups, or to an existing company that wants to expand to meet demand, I would certainly prefer the latter two.

The concentration of massive amounts of wealth — at the expense of many — has never led to a good ending.

BTW, I would put Bill Gates in an entirely different category than traders. At least he *worked* to earn his money (monopolies, notwithstanding).[/quote]
Bill Gates $56B in asset isn’t all from MSFT. He used his money he made from MSFT to invest in other companies as well. Then there’s Warren Buffett. MOST of his wealth came from investment.

That $1M wasn’t given to 1 person. That one person earned it. If that person didn’t earn that $1M, there’s no guarantee that 100k other people would magically earn a combined $1M more. If you’re talking about taxing $1M from one person to give another, well, reality is not panning out like your ideal scenario. That $1M might go from one person and given to another’s pension, or what we’ve seen recently, $700B was given to a few companies. Tell me, do you think the $700B in bailout dished out by the government help society more or the $600B that Warren Buffett is raising between the Billionaires for charity?

[an]

[quote=CA renter]I’m sure it’s better for society if $1MM is split among 100,000 people, instead of having it go to one person.

If one has to choose between giving this money to a HF trader, or giving it to a handful of start-ups, or to an existing company that wants to expand to meet demand, I would certainly prefer the latter two.

The concentration of massive amounts of wealth — at the expense of many — has never led to a good ending.

BTW, I would put Bill Gates in an entirely different category than traders. At least he *worked* to earn his money (monopolies, notwithstanding).[/quote]
Bill Gates $56B in asset isn’t all from MSFT. He used his money he made from MSFT to invest in other companies as well. Then there’s Warren Buffett. MOST of his wealth came from investment.

That $1M wasn’t given to 1 person. That one person earned it. If that person didn’t earn that $1M, there’s no guarantee that 100k other people would magically earn a combined $1M more. If you’re talking about taxing $1M from one person to give another, well, reality is not panning out like your ideal scenario. That $1M might go from one person and given to another’s pension, or what we’ve seen recently, $700B was given to a few companies. Tell me, do you think the $700B in bailout dished out by the government help society more or the $600B that Warren Buffett is raising between the Billionaires for charity?

[Anonymous]

[quote=CA renter]If one has to choose between giving this money to a HF trader, or giving it to a handful of start-ups, or to an existing company that wants to expand to meet demand, I would certainly prefer the latter two.[/quote]

CAR, nobody “gives” money to HF traders.

Your comments show a complete ignorance about HF trading and the markets in general. You simply don’t know what you are talking about.

I used to work for a HF trading firm. Gave it up because I have a family now. I loved the analytic aspects of work as well of the intensity, but did not want to make the personal sacrifices needed to survive in this hyper-competitive field.

There are lots of problems with the way our markets work, but HF trading is pretty low on the list of issues. There is nothing inherently unfair or destabilizing about HF trading. “High frequency” is a completely relative term – how high is too high? Attempts to “slow down” the frequency of trading will accomplish nothing, at best, and will likely do more harm than good. Computers are part of our world now – get used to it.

So if you still want to have a scapegoat, or demonize something you don’t understand, I suggest you use the term “derivatives traders,” which is still quite vague, but is probably more accurately describes the folks that introduce the most risk to our economy.

[Anonymous]

[quote=CA renter]If one has to choose between giving this money to a HF trader, or giving it to a handful of start-ups, or to an existing company that wants to expand to meet demand, I would certainly prefer the latter two.[/quote]

CAR, nobody “gives” money to HF traders.

Your comments show a complete ignorance about HF trading and the markets in general. You simply don’t know what you are talking about.

I used to work for a HF trading firm. Gave it up because I have a family now. I loved the analytic aspects of work as well of the intensity, but did not want to make the personal sacrifices needed to survive in this hyper-competitive field.

There are lots of problems with the way our markets work, but HF trading is pretty low on the list of issues. There is nothing inherently unfair or destabilizing about HF trading. “High frequency” is a completely relative term – how high is too high? Attempts to “slow down” the frequency of trading will accomplish nothing, at best, and will likely do more harm than good. Computers are part of our world now – get used to it.

So if you still want to have a scapegoat, or demonize something you don’t understand, I suggest you use the term “derivatives traders,” which is still quite vague, but is probably more accurately describes the folks that introduce the most risk to our economy.

[Anonymous]

[quote=CA renter]If one has to choose between giving this money to a HF trader, or giving it to a handful of start-ups, or to an existing company that wants to expand to meet demand, I would certainly prefer the latter two.[/quote]

CAR, nobody “gives” money to HF traders.

Your comments show a complete ignorance about HF trading and the markets in general. You simply don’t know what you are talking about.

I used to work for a HF trading firm. Gave it up because I have a family now. I loved the analytic aspects of work as well of the intensity, but did not want to make the personal sacrifices needed to survive in this hyper-competitive field.

There are lots of problems with the way our markets work, but HF trading is pretty low on the list of issues. There is nothing inherently unfair or destabilizing about HF trading. “High frequency” is a completely relative term – how high is too high? Attempts to “slow down” the frequency of trading will accomplish nothing, at best, and will likely do more harm than good. Computers are part of our world now – get used to it.

So if you still want to have a scapegoat, or demonize something you don’t understand, I suggest you use the term “derivatives traders,” which is still quite vague, but is probably more accurately describes the folks that introduce the most risk to our economy.

[Anonymous]

[quote=CA renter]If one has to choose between giving this money to a HF trader, or giving it to a handful of start-ups, or to an existing company that wants to expand to meet demand, I would certainly prefer the latter two.[/quote]

CAR, nobody “gives” money to HF traders.

Your comments show a complete ignorance about HF trading and the markets in general. You simply don’t know what you are talking about.

I used to work for a HF trading firm. Gave it up because I have a family now. I loved the analytic aspects of work as well of the intensity, but did not want to make the personal sacrifices needed to survive in this hyper-competitive field.

There are lots of problems with the way our markets work, but HF trading is pretty low on the list of issues. There is nothing inherently unfair or destabilizing about HF trading. “High frequency” is a completely relative term – how high is too high? Attempts to “slow down” the frequency of trading will accomplish nothing, at best, and will likely do more harm than good. Computers are part of our world now – get used to it.

So if you still want to have a scapegoat, or demonize something you don’t understand, I suggest you use the term “derivatives traders,” which is still quite vague, but is probably more accurately describes the folks that introduce the most risk to our economy.

[Anonymous]

[quote=CA renter]If one has to choose between giving this money to a HF trader, or giving it to a handful of start-ups, or to an existing company that wants to expand to meet demand, I would certainly prefer the latter two.[/quote]

CAR, nobody “gives” money to HF traders.

Your comments show a complete ignorance about HF trading and the markets in general. You simply don’t know what you are talking about.

I used to work for a HF trading firm. Gave it up because I have a family now. I loved the analytic aspects of work as well of the intensity, but did not want to make the personal sacrifices needed to survive in this hyper-competitive field.

There are lots of problems with the way our markets work, but HF trading is pretty low on the list of issues. There is nothing inherently unfair or destabilizing about HF trading. “High frequency” is a completely relative term – how high is too high? Attempts to “slow down” the frequency of trading will accomplish nothing, at best, and will likely do more harm than good. Computers are part of our world now – get used to it.

So if you still want to have a scapegoat, or demonize something you don’t understand, I suggest you use the term “derivatives traders,” which is still quite vague, but is probably more accurately describes the folks that introduce the most risk to our economy.

[Arraya]

[quote=pri_dk]. Computers are part of our world now – get used to it.

.[/quote]

Yeah, no doubt. You could completely replace the wall streets function with a computer program.

Since the 70s they have had difficulty with their intended purpose, which is finding viable, socially beneficial technologies. Well at least as far as with the amount of investment capital growing exponentially each year. So they have resorted to gambling schemes and financial alchemy. For the most part, they serve little to no social function.

Slightly OT, but tangentially related.

The science of motivation

[Arraya]

[quote=pri_dk]. Computers are part of our world now – get used to it.

.[/quote]

Yeah, no doubt. You could completely replace the wall streets function with a computer program.

Since the 70s they have had difficulty with their intended purpose, which is finding viable, socially beneficial technologies. Well at least as far as with the amount of investment capital growing exponentially each year. So they have resorted to gambling schemes and financial alchemy. For the most part, they serve little to no social function.

Slightly OT, but tangentially related.

The science of motivation

[Arraya]

[quote=pri_dk]. Computers are part of our world now – get used to it.

.[/quote]

Yeah, no doubt. You could completely replace the wall streets function with a computer program.

Since the 70s they have had difficulty with their intended purpose, which is finding viable, socially beneficial technologies. Well at least as far as with the amount of investment capital growing exponentially each year. So they have resorted to gambling schemes and financial alchemy. For the most part, they serve little to no social function.

Slightly OT, but tangentially related.

The science of motivation

[Arraya]

[quote=pri_dk]. Computers are part of our world now – get used to it.

.[/quote]

Yeah, no doubt. You could completely replace the wall streets function with a computer program.

Since the 70s they have had difficulty with their intended purpose, which is finding viable, socially beneficial technologies. Well at least as far as with the amount of investment capital growing exponentially each year. So they have resorted to gambling schemes and financial alchemy. For the most part, they serve little to no social function.

Slightly OT, but tangentially related.

The science of motivation

[Author]

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