set up as a “drawer” to put related articles under heading. There is a lot of discussion about this now, with automation making increasing impacts, and with mobile imigrants, with no means of support, it will get even more press. We should figure out what impacts this will create, and which unforeseen elements may play out. Many gov and econ folks are pressing for this, along with the elimination of cash, which should effect black and grey markets, and micro businesses in general.
How to Reform Welfare and Taxes to Provide Every American Citizen with a Basic Income
A detailed funding plan for cross-partisan implementation of universal basic income in the United States
and the clawback of funds from a nationwide VAT tax is progressive , but we need the local cities to do the important classification of local infrastructure, so don’t know how that works out.
Good article tho, from one of the moderators on r/basic income
″ we’re hiring an additional researcher. We’re looking for a Research Manager to oversee operations for the larger-scale study. This person will help shape the final research design and contribute extensively to the analysis and reporting.
“modest transaction fees on trades of stocks, bonds and derivatives could generate more than $300 billion per year. Such fees would not only generate income for everyone; they’d discourage speculation and help stabilize our financial system. Similar fees could be applied to patent and royalty earnings, which are returns not only to innovation but also to monopoly rights granted and enforced by society.”
“In the game Monopoly, $200 is the amount every player gets for passing Go. Such cash infusions aren’t bad for the game; instead they help all players play the game. The same would happen in our real economy if everyone gets infusions of $200 a month. The extra money would relieve some burdens of working families and heighten their chances for success and satisfaction. And it would stimulate our economy without higher debt.”
This assumes that introducing transaction fees sufficient to bring in $300B/year in revenue would not change trading behaviour in a way that (1) substantially reduces that $300B/year figure and/or (2) has other adverse consequences.
(It might, of course, have good consequences. The author seems to think so—“they’d discourage speculation and help stabilize our financial system”. It would have been nice if they’d explained why they think that.)
Actually, we really need at minimum, is a put/call fee, just to slow down the frontrunning that algorithmic trading is driving, it is what causes flash crashes, and huge price spikes, and also is too easy to game that system by having a faster connection...
Would also be nice to force folks to “buy” their shorts, instead of just “borrowing” stocks to short. Too easy to force a hostile takeover that way, and causes companies to carry toxic loads of debt to keep em from being ripe targets.
the frontrunning that algorithmic trading is driving
[citation needed]
it is what causes flash crashes, and huge price spikes
[citation needed]
and also is too easy to game that system by having a faster connection
You can certainly make more money in HFT with a faster connection. Why is that actually a problem for anyone other than (other) would-be high-frequency traders?
Would also be nice to force folks to “buy” their shorts, instead of just “borrowing” stocks to short.
Article out this week on the microwave vs. fiber time delay between NY and Chicago, and a new trans-Atlantic cable being laid just for London quote time efficiency.
I would like to see a fee imposed on puts, and have a long enough time for those micro-payments to clear, so that an actual, visible quote is available to call them, rather than just a ramping of prices. It doesn’t have to be large, but it does have to clear, to stabilize prices a bit.
I also think you should have to buy your shorts, not just borrow them. Some closely held corps don’t even have enough outstanding shares to cover what some short sellers are using against them.
First link has nothing to do with algorithmic trading. Second link has nothing to do with algorithmic trading. Third link is to a Quora question about whether HFT is basically frontrunning, and the top answer says no, it isn’t.
I wasn’t questioning the existence of frontrunning. I was questioning your claim that algorithmic trading leads to frontrunning and therefore adding small transaction fees would reduce frontrunning. Nothing in the links you posted in reply seems to me to suggest that there’s any validity to that claim.
nanex
Your link describes one flash crash, about seven years ago. So far as I can tell there have been maybe four substantial flash crashes. I am happy to agree that extremely short-duration trading anomalies are likely to be the result of automated trading; what I am unconvinced by (and here I wasn’t nearly explicit enough, for which my apologies) is that this is actually a big deal. How much actual damage have flash crashes done, in total? My impression is that the answer is “really rather little”.
Incidentally, as you say the SEC blame lack of liquidity for the 2010 flash crash; so here’s a hypothesis I would be interested to see you refute: Slowing down trading would simply make flash crashes slower. It is not at all clear to me that that would be an improvement. (Does Hunsader’s account of things suggest I’m wrong? I don’t think so. He suggests deliberate malice by actual human beings, and IIUC his theory is that the proximate cause of the flash crash was a 30-second delay in some sources of price data. In other words, the crash came about in part because for some traders things were too slow.)
I also think you should have to buy your shorts, not just borrow them.
You said that before and I replied “What exactly is your proposal?”. I am still interested.
No idea, i don’t know the market feedbacks well enough to solve this problem. I know that alot of folks see the shorting avenue as a way to give negative feedback on a company, and that the markets monetize on volatility, but it seems that shorting with borrowed options is a suboptimal way to give feedback. Perhaps it comes down to a gambling market, as in the futures trading that many here are interested in. But with the majority of money trading in the Dark Markets, between the big dog Banks, maybe we have lost control of these markets anyway. As it stands now, the EPS vs. valuations, is totally unrealistic anyway. It looks like gambling more than ever, and the casino is controlling the odds.
IMO, an unadorned link to a news website (unless it’s more directly LW related) seems better suited to the open thread or media thread.
set up as a “drawer” to put related articles under heading. There is a lot of discussion about this now, with automation making increasing impacts, and with mobile imigrants, with no means of support, it will get even more press. We should figure out what impacts this will create, and which unforeseen elements may play out. Many gov and econ folks are pressing for this, along with the elimination of cash, which should effect black and grey markets, and micro businesses in general.
Having a place to collect such links seems reasonable. I don’t think that place should be a link-post.
I guess gathering links to multiple related articles under one LW post makes sense.
How to Reform Welfare and Taxes to Provide Every American Citizen with a Basic Income A detailed funding plan for cross-partisan implementation of universal basic income in the United States
https://medium.com/economicsecproj/how-to-reform-welfare-and-taxes-to-provide-every-american-citizen-with-a-basic-income-bc67d3f4c2b8
i especially like this part
Seigniorage reform
and the clawback of funds from a nationwide VAT tax is progressive , but we need the local cities to do the important classification of local infrastructure, so don’t know how that works out.
Good article tho, from one of the moderators on r/basic income
Hiring for Basic Income at Ycombinator
″ we’re hiring an additional researcher. We’re looking for a Research Manager to oversee operations for the larger-scale study. This person will help shape the final research design and contribute extensively to the analysis and reporting.
https://blog.ycombinator.com/hiring-for-basic-income/
Universal income can come from universal assets”
“modest transaction fees on trades of stocks, bonds and derivatives could generate more than $300 billion per year. Such fees would not only generate income for everyone; they’d discourage speculation and help stabilize our financial system. Similar fees could be applied to patent and royalty earnings, which are returns not only to innovation but also to monopoly rights granted and enforced by society.”
“In the game Monopoly, $200 is the amount every player gets for passing Go. Such cash infusions aren’t bad for the game; instead they help all players play the game. The same would happen in our real economy if everyone gets infusions of $200 a month. The extra money would relieve some burdens of working families and heighten their chances for success and satisfaction. And it would stimulate our economy without higher debt.”
http://evonomics.com/how-to-pay-for-universal-basic-income/
This assumes that introducing transaction fees sufficient to bring in $300B/year in revenue would not change trading behaviour in a way that (1) substantially reduces that $300B/year figure and/or (2) has other adverse consequences.
(It might, of course, have good consequences. The author seems to think so—“they’d discourage speculation and help stabilize our financial system”. It would have been nice if they’d explained why they think that.)
Actually, we really need at minimum, is a put/call fee, just to slow down the frontrunning that algorithmic trading is driving, it is what causes flash crashes, and huge price spikes, and also is too easy to game that system by having a faster connection...
Would also be nice to force folks to “buy” their shorts, instead of just “borrowing” stocks to short. Too easy to force a hostile takeover that way, and causes companies to carry toxic loads of debt to keep em from being ripe targets.
[citation needed]
[citation needed]
You can certainly make more money in HFT with a faster connection. Why is that actually a problem for anyone other than (other) would-be high-frequency traders?
What exactly is your proposal?
Frontrunning
https://secure.marketwatch.com/story/hsbc-foreign-exchange-executive-charged-with-front-running-order-2016-07-20-151031929
http://www.businessinsider.com/bank-of-america-accused-of-front-unning-2014-1
https://www.quora.com/Is-HFT-basically-electronic-front-running-due-to-differing-latency
Article out this week on the microwave vs. fiber time delay between NY and Chicago, and a new trans-Atlantic cable being laid just for London quote time efficiency.
Algo trading researcher
http://www.nanex.net/NxResearch/
And the SEC doesn’t think he is accurate, but...
http://www.reuters.com/article/us-flashcrash-nanex-idUSTRE6935SA20101004
I would like to see a fee imposed on puts, and have a long enough time for those micro-payments to clear, so that an actual, visible quote is available to call them, rather than just a ramping of prices. It doesn’t have to be large, but it does have to clear, to stabilize prices a bit.
I also think you should have to buy your shorts, not just borrow them. Some closely held corps don’t even have enough outstanding shares to cover what some short sellers are using against them.
First link has nothing to do with algorithmic trading. Second link has nothing to do with algorithmic trading. Third link is to a Quora question about whether HFT is basically frontrunning, and the top answer says no, it isn’t.
I wasn’t questioning the existence of frontrunning. I was questioning your claim that algorithmic trading leads to frontrunning and therefore adding small transaction fees would reduce frontrunning. Nothing in the links you posted in reply seems to me to suggest that there’s any validity to that claim.
Your link describes one flash crash, about seven years ago. So far as I can tell there have been maybe four substantial flash crashes. I am happy to agree that extremely short-duration trading anomalies are likely to be the result of automated trading; what I am unconvinced by (and here I wasn’t nearly explicit enough, for which my apologies) is that this is actually a big deal. How much actual damage have flash crashes done, in total? My impression is that the answer is “really rather little”.
Incidentally, as you say the SEC blame lack of liquidity for the 2010 flash crash; so here’s a hypothesis I would be interested to see you refute: Slowing down trading would simply make flash crashes slower. It is not at all clear to me that that would be an improvement. (Does Hunsader’s account of things suggest I’m wrong? I don’t think so. He suggests deliberate malice by actual human beings, and IIUC his theory is that the proximate cause of the flash crash was a 30-second delay in some sources of price data. In other words, the crash came about in part because for some traders things were too slow.)
You said that before and I replied “What exactly is your proposal?”. I am still interested.
No idea, i don’t know the market feedbacks well enough to solve this problem. I know that alot of folks see the shorting avenue as a way to give negative feedback on a company, and that the markets monetize on volatility, but it seems that shorting with borrowed options is a suboptimal way to give feedback. Perhaps it comes down to a gambling market, as in the futures trading that many here are interested in. But with the majority of money trading in the Dark Markets, between the big dog Banks, maybe we have lost control of these markets anyway. As it stands now, the EPS vs. valuations, is totally unrealistic anyway. It looks like gambling more than ever, and the casino is controlling the odds.
Why do you have the urge to post things about which you have no clue..?
AI and swarmbots takeover grocery store and delivery
http://www.gizmodo.co.uk/2017/02/these-are-the-robots-that-will-be-doing-your-online-shopping-in-the-future/