Bill Griffeth (filling in for Larry Kudlow) discusses high frequency trading and whether it creates unfair markets. Bill Black weighs in on the lack of merits for High Frequency Trading and impact of collocating servers to get milli-second trading advantages.
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Nice work Bill Black!
I love how the host had no shame in promoting the validity of HFT for the sake of their advertisers. What a homer? He’s making Hannity and O’Reilly look a little more credible, which is tough to do.
Bill Griffith doesn’t even know how to be a moderator! He has already made up his mind so why does he have any guests?
Pears before swine …
“Pearls”, that is …
Bill Griffeth is an idiot! And that’s being kind.
Jaysus; what’s it going to take to sink it home, that the game is rigged?
Idiots! Americans are idiots! EOM!
No wonder CNBC’s viewership is tanking when idiots like this host doesn’t understand the topic he’s discussing. At least Mr. Black can explain this stuff, but he is a guest.
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An all time high market is not good when it doesn’t reflect the real economy, or when it transfers wealth only to those who can afford high frequency arbitrage or trades. It’s a type of inflation and crazy levels of abstraction, actually, where the price of the goods — the stock — gets distorted far higher than the real value, which is why we see the bubbles and crashes.
If granny (or anyone) buys stock at the bubble price when it crashes, then she can be wiped out. Anything which makes finance go so far out of step with the real economy is harmful to the economy and to the entire system, as well as to individuals who get caught in the pincer.
How does that hurt my grandmother?
If she’s not trading then not too much. But if she’s buying or selling (and especially if her investments are aggregated with others into a larger buy/sell order) then she will be significantly harmed because HFT will unfairly raise her purchase price or lower her sell price. HFTs are front-running the trades (particularly the large ones). Also, HFT creates ‘artificial’ upward and downward movements (volatility) from which they take small pieces of incremental movements up and down. It’s totally and blatantly ‘unfair’…. which I’m sure your grandmother would insist should be ‘illegal’.