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Trading increasingly is an end in itself, operating at a remove from the goods-and-services-producing part of the economy and taking a growing share of GDP—twice what it did a century ago, when Wall Street was financing the enormous industrial expansion of the economy. “This is counterintuitive, to say the least,” wrote New York University economist Thomas Philippon in an article for the Russell Sage Foundation. “How is it possible for today’s finance industry not to be significantly more efficient than the finance industry of John Pierpont Morgan?”
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There’s no news in here, but it’s one of the most comprehensive and best-written summaries of the shitshow that is HFT.
But this particular point is not one I’d ever really considered before, not in these words, and it’s useful in understanding where some of the absurdity starts. Where it ends, I guess we’ll see.
Raging Bulls: How Wall Street Got Addicted to Light-Speed Trading | Wired Business | Wired.com
