Tim Bass
09-23-2008 11:24 AM
In
The Audacity of Capital Markets we briefly touched on the culture of arrogance and greed in financial services.* It is interesting because if you look at the various software players that are focused on selling to financial services, you will easily see that they have bought into the same “feed the beast” culture that has contributed to the destabilization of the economy and, in turn, society.
For example, the “Average Joe Investor” does not care about “best order execution” or “smart order routing,” this is for “the big boys.”* As we all know, saving a few pennies or dollars per transaction to “Average Joe Investor” does nothing for them when their retirement nest egg is lost due to corporate greed and negligence.**** The folks who “really care” about shaving a few milliseconds off market execution are the companies that are trading high volumes of exotic derivatives and baskets who have, for the most part, zero interest in the personal financial portfolio of “Jane in Iowa” or “Joe in Kansas.”
I am really amazed to see the dominance of greed in corporate America and the lack of corporate social responsibility.* Risk taking and “split second trading” does little for any small. individual investor and has proven to destabilize our society.*** Who cares about saving a few pennies or dollars in market executive?
The answer: Only the greedy corporations, the same people responsible for the current destabilization, chao and near collaspe of our entire financial system. * Homes lost, unprecedented bankruptcies. and money market funds less than par value!** You no doubt have read that folks in the
Reserve Money Market funds cannot even withdraw their “safe money.”* Investors in the Reserve Funds are being told that for every dollar they invested in a money market, they now only have 97 cents and cannot withdraw their capital as the Reserve waits for a government bailout.
What is to blame? Greed and profits over corporate social responsibility are to blame.
I read where some folks think the government needs to regulate market-related news, supposedly to stabilize trading based on news.** Regulating news has another name -* “censorship” - but who cares about the US Constitution when money and split second algo trading is involved? ** I am amazed. * Folks in financial services just will say or do anything to make a buck, or keep from losing one, even at the expense of society and our basic constitutional freedoms.* News is not regulated in our democratic society, nor should it be to make algorithmic trading “better”.**** What we need is less split second, computerized algo trading and more stablity. * Machine processing should not dicate nor mandate changes to our democratic principles.
Nor should our lives in a free society be censored or regulated because of the trading requirements for split second transactions that benefit large corporations.*** The average investor does not need an unstable financial system trading exotic derivatives and baskets at the speed of light.* This requirement is driven by corporate greed that destabilizes the core economy and fabric of our society.
Of couse, many of the same folks would like for us to believe that technology is the answer.* This is a fallacy.
Corporate greed is destabilizing society. * What need to be regulated is not the news, but corporate risk taking and corporate goverance.* Individual investors do not need lightspeed transactions in an unstable world.** Citizens and families need a secure, stable economic infrastructure, something that has been lost in the culture of corporate greed, but hopefully not forever.
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