I could not have read a more contrasting article to the one that I had just blogged about on the science of poverty. This is far, far removed from the world that Charles Cooper is concerned about and rightly so.
I scoured the online comments on the article to see if anyone commented on the health implications to people of so many towers coming up to pass the data on from one tower to the other a teeny-weeny bit faster, not to mention the ugliness of it all – spoiling the landscape: “English coastal cliffs”. Together with cellular phone towers, are there radiation implications for people?
Further, as someone has commented below, what benefit is it of to the society – does it improve capital allocation which is the alleged benefit of capital markets (as per textbooks)?
In other words, what is the purpose and meaning of it all?
Read this comment from a reader:
My firm used to make $1bn a year doing it. They are stealing from legitimate order flow from institutional and retail investors. They “ping” the market tens of thousands of times a minute making and cancelling orders. Why the major institutions don’t demand changes is just another sign of the full institutional corruption in the capital markets. The exchanges don’t want to fix it because they want the phony volume. It’s a complete scam.
Wonder if, in the end, these folks pursuing the speed of light for their stock trades will end up like Charles Duhigg’s ‘1.2mn dollar’ friend?
Thank you, Saurabh, for sharing these articles.
[Postscript: Matt Levine has a contrarian piece. He says that there is no morality involved in HFT. I do not agree because the issue is not just about me hitting the keyboard few milli/nano seconds faster than someone else. The algorithms also confuse or ping the market. See the online FT comment pasted above.]