It is not the first time this observation has been made of our US Federal Government. See chart of Federal outlays below. (from Vox)
On “60 Minutes” last night, author Michael Lewis made a bland assertion: High-frequency traders, he said, working with U.S. stock exchanges and big banks, have rigged the markets in their own favor. The only surprising thing about Lewis’s assertion was that anyone could be even remotely surprised by it.
Barry Ritholz, author of the above quote, goes on to explain how The Securities and Exchange Commission has licensed High Frequency Trading firms to essentially steal pennies from every trade on the major stock exchanges. Yes, there is a theoretical benefit to this system of legalized front-running. But it has not proven to have much, if any, value in actual practice.
They are the centerpiece of a flawed system without any socially redeeming qualities.
As I have said all along, while the theft of minute amounts from individual investors should obviously be outlawed, the damage from sanctioning this corrupt behavior is immeasurable to the brand image of the US capital marketplace. With global competitors from London to Hong Kong, and Sinagpore to Dubai, integrity and the strict rule of law were the supreme competitive advantages for Team USA. Those longstanding advantages continue to be wastefully squandered by misguided Congressional policies, from the deregulation of derivatives trading in 2000 to the present lack of constraints on high frequency trading systems.
Hopefully, there will be enough outrage over the 60 Minutes segment and Lewis’ new book to empower our more ethical defenders of consumer rights in Congress (I am talking to you, Senator Warren) to enact legislation that reigns in this noxious business practice.
For anyone the least bit concerned about their privacy in our Brave New Connected World, Dragnet Nation by Julia Angwin will do little to lower your anxieties. Angwin details her efforts to escape the efforts of internet companies (we’re talking you, Google), marketing companies, and data miners … not to mention the NSA … to track each of us every minutes, what we do and more. And all this data is being stored, in perpetuity it seems, to add to the increasingly clear digital picture of our lives. While most of this activity is benign and actually makes life more efficient, Angwin shares the concerns of many that this unseen pervasive invasion of our individual privacy has disturbing potential.
Angwin explores steps each of us can take (at a price, as privacy is “not free and is becoming a luxury good”) to reduce the amount of personal data that is collected, bought and sold and permanently stored on us each and every day, by our computers and by our mobile phones. Two simple steps she suggests that everyone can do for free: 1) turn off your phone’s WIFi function when you are not using it. Surprisingly, companies are now identifying where you are by using your phone’s WiFi signal even if you are not logged into a WiFi hotspot and 2) Try switching from Google search to an anonymous search engine such as DuckDuck Go (yes, DuckDuck Go). They have a good explanation of how Google tracks your every move here with a link to downloading their toolbar promising not to retain or track your data.
What Kills US? is an excellent short video on the real threats to our health and lives in the US. This is behavioral economics at its best – and explores how we obsess to our detriment on “headline risks” such as terrorism and airplane crashes when we would be far better off simply getting more exercise.
Thanks to The Big Picture