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View Diary: I.R.S.: U.S. Income Inequality Has Reached Record Level (w/Update) (186 comments)

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  •  You aren't as informed as you think you are (4+ / 0-)
    Recommended by:
    MKinTN, elwior, cpresley, Cassiodorus
    You really need to bone up on economics..."Unfairly destroy companies?" I agree that naked shorting is bad, but please explain to me how naked shorting "destroys companies". Any competently managed company will continue to operate just the same regardless of its stock price.
     Obviously you aren't in the business of running a public company.
      Maybe you aren't familiar with the saga of Overstock.com.
       More importantly, naked shorting had a big part of causing the stock market crash in 1929.
      I've heard naked shorting described as theft, and I believe it.
    You have no clue what you are talking about.
     You aren't as savvy as you think you are, and you underestimate me.
    There are certainly some issues with HFT, but to argue they don't increase liquidity is absurd. They do by definition.
    Oh, they add liquidity...on the way up. But when the market is crashing, when they are needed, they vanish. The proof was shown during the Flash Crash in 2010, when those HFT computers were simply unplugged.

    None are so hopelessly enslaved, as those who falsely believe they are free. The truth has been kept from the depth of their minds by masters who rule them with lies. -Johann von Goethe

    by gjohnsit on Tue Sep 10, 2013 at 09:01:04 PM PDT

    [ Parent ]

    •  Sigh (0+ / 0-)
      Obviously you aren't in the business of running a public company.
        Maybe you aren't familiar with the saga of Overstock.com.
      Hopefully you aren't either, if you run a company in such a way that changes in its stock price affect company operations.

      The overstock.com debacle occurred due to bad company management, not short sellers. Citing Overstock simply makes you look poorly informed to those who actually understand these matters. It is extremely frustrating to me to see such misinformation being promulgated by a highly rec'd diary author. Overstock, banks, everyone always blames short sellers for their own bad management.

      You never addressed my point as to how exactly most companies with solid balance sheets weather major changes in their stock prices without major impacts.

      Stock prices follow fundamentals, not the other way around except in the short term.

      Oh, they add liquidity...on the way up. But when the market is crashing, when they are needed, they vanish. The proof was shown during the Flash Crash in 2010, when those HFT computers were simply unplugged.
      So? Even if you're right, adding liquidity some of the time but not all of the time is still a benefit to the market. It all nets out to zero anyway so unless you're another high frequency trader there isn't much to worry about. A market with solid fundamentals cannot crash regardless of the activities of speculative traders.

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Wed Sep 11, 2013 at 09:38:15 AM PDT

      [ Parent ]

      •  More details (2+ / 0-)
        Recommended by:
        cpresley, Cassiodorus
        You never addressed my point as to how exactly most companies with solid balance sheets weather major changes in their stock prices without major impacts.
        Quite simply: companies borrow against their equity. Without equity their credit dries up. Without credit a lot of companies can't function.
          I hope that helps.
         So? Even if you're right, adding liquidity some of the time but not all of the time is still a benefit to the market.
         That's obviously not true. Excess liquidity in an upmarket leads to bubbles.
          Plus HFT adds nothing to the underlying fundamentals and merely skims profits off the top of every trade.
         A market with solid fundamentals cannot crash regardless of the activities of speculative traders.
         The days of this being a healthy market are long over. The current markets are manipulated at every level.

        None are so hopelessly enslaved, as those who falsely believe they are free. The truth has been kept from the depth of their minds by masters who rule them with lies. -Johann von Goethe

        by gjohnsit on Wed Sep 11, 2013 at 09:49:11 AM PDT

        [ Parent ]

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