Algos and mindlessness

 

The much predicted impact of high frequency trading is starting to be felt on the Australian stock market. A program on Background Briefing entitled “Attack of the Algorithms” put the level of algorithmic trading at 40% of the turnover. It is on the way to the 70% that is the level on the NYSE. There were many concerns expressed about high frequency trading (HFT). Plus there was an unconvincing apologist from ASIC, surprise, surprise. ASIC can be counted on to have its eyes closed when it matters.  Yet what I found most compelling is how metaphors divert analysts away from the real problem.

The metaphor, of course, is one of fluid, or water. HFT provides “liquidity”. What matters is “deal flow”, one algo trader said. It creates the illusion that financial behaviour can be analysed like tides or waves, a sort of tangible phenomena that can be observed from a  distance. In fact, it is a set of rules and the question is who gets to set those rules. The traders or the government and the regulators acting on behalf of the government?

The usual arguments were on display. “Oh well, it’s all inevitable, because, as with the explosion of derivatives markets, traders are much smarter than regulators, so no matter what regulators do traders find a way to defeat it.” This assumes impotence of the government, which is only the case if the government decides not to govern. It would be possible to ban algorithmic trading, or to go to some lengths to limit it, like email spam. As far as the efficiency of the stock market is concerned, nothing would be lost except volatility.

I have already talked at length about the myth of financial de-regulation, which is nonsense when we consider that money IS rules. This argument: “Oh, traders are far too clever to be regulated” is just the other side of that coin. It is simply saying that the cleverest get to set the rules, simply by virtue of their cleverness. One would hardly bowl up a similar argument to justify theft, for instance. “Oh, he was a clever thief, so I guess it was fine that he stole all our money.”But in the finance sector, such nonsense is accepted.

Indeed, algorithmic trading is an extreme exemplification of the point that money IS rules. Algorithms are only possible if there is a rule based system on which the equations are based; mathematics requires basic laws in order to exist. Is it really impossible for the rule setter, the regulator, to control that, given that the algorithms’ very existence is dependent on the conditions the regulator creates?This posture of helplessness is a deep, continuous abrogation of responsibility by government which is endemic across the financial markets.

But of course on we go, helpless in the face of trading ingenuity. Which is creating a very interesting tension between man and machine that I expect will shape much of what happens in financial markets over the coming period. Because we have failed to control the techniques for gaming the system, we are entering a kind of cyborg period when the machines will start to control us. Flash Crashes are probably only one of the problems. Humans will start to exit the market. The Background Briefing episode interviewed a number of smaller traders who basically said they were getting out because they can’t compete with the machines. It is only likely to get worse.

Allowing such tampering with equity markets is deeply irresponsible because equity capital, which is based on a higher order of trust that debt capital, is critically important to avoiding or getting out of crises. Equity, as was seen in the $100 billion raised by listed Australian companies in the wake of the GFC, is critical helping firms buffer themselves against crises. And when there is a crisis, equity can reprice without imperilling the system, which is not the case with debt, especially bank lending. Equity is the balm of the system, especially English-speaking financial systems, so it is no small thing that it is being gamed.

The philosopher of science Stanley Jaki made this comment about artificial intelligence:

Herein lies the worst fallacy of the whole modern discussion about computers as artificial intelligence. Machines do not add, they do not calculate, they do not integrate any more than a gutter does not add or integrate by being the channel for millions of raindrops. In an electronic computer not raindrops but electronic impulses are channeled along strictly predetermined routes. In the process no addition is performed. It takes a mind, always a mind, to abstract meaning from each step through which the machine is directed by its specific man-built mechanism.

 

It takes a mind, always a mind, to calculate the worth of a company or an investment. It takes a mind to provide the much lauded “price signals” about a stock. But apparently you no longer require a mind if you are a regulator or government washing your hands as the algorithms are allowed to take over. Perhaps we can automate government as well.

In the final analysis, of course, the machines can’t rule. We created them. But we seem determined to learn that lesson in the worst possible way.

 

 

 

 

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Comments

  1. From Background Briefing at Radio National today:

    Attack of the algorithms

    Robot traders are dominating stock markets using high speed computer algorithms. Human traders and government regulators can’t keep up, and markets could be one programming glitch away from the next big crash. Stan Correy investigates.

    Download/listen to Podcast

  2. It feels like each time I hear about ASIC it is about its inadequacy. Is it due to unbalanced reporting of the journalism in this country or is it time to abolish this body so that at least it does not waste our tax money?

    • At least in part this is a funding issue. Maybe also an issue with the limited power they have to discipline rule breakers. And of course the rules themselves.

      Another reason why we need another, much broader, Wallis Inguiry.

      • Another Wallis inquiry is a timely proposal. I hope this time the inquiry is headed by somebody with more brain though.

      • Alex Take a look at their prognostications on the shipping cartel that operates bringing goods to and from Australia.
        If a couple of my family store retailers got together and said ‘It isn’t a proposition, taking in all the costs, to sell product x under $500, so we’ll agree we don’t sell it under $500’ These two families can be fined out of existence and gaoled. The threats to small businesses during the GST introduction and the Carbon Tax introduction were classic in this regard.

        Yet ASIC approves shipping lines getting together as a monopoly, calling themselves a monopoly and advising price rises under that banner!
        Somebody from ASIC please explain this to me one day. Submissions to ASIC on the subject are just ignored.
        Is it that the Shipping Companies would just screw us anyway and ASIC is powerless so it wants to give the impression it has some say. Then to show how ‘on the ball’ and ‘tough’ they are they set about screwing small business out of existence!!!
        Anyone from ASIC???

        Get rid of it!

        • The threats to small businesses during the GST introduction and the Carbon Tax introduction were classic in this regard.

          That’s a rather gross misrepresentation of the truth.

        • I suspect this is because the shipping companies are not based in Australia and thus not subject to ASIC jurisdiction. But I could be wrong.

  3. The claim of increased liquidity is nonsense. Having to VWAP 5000 CSL shares over an hour so not to move the price is a joke.

    If you hit the bid with that order you will pick up 47 shares and the bid will move 20c down as the algos scurry away from any size and a dozen orders averaging 34 shares will try and front run you.

    Liquidity providers my arse.

    The options market is now ruined as the market makers can’t implement hedges in the thin markets that move so much as the front running bots steal their cents. The spreads are now so wide it is pointless trading ETOs in all but a couple of names

    Surely a requirement that orders must be left for a few seconds or face a small fee isn’t too much to ask.

    ASIC and the ASX are laughable – if a human does half the crap some of the algos are designed to do we are accused of front running/market manipulation etc.

    I don’t have a problem with computers executing orders but some of the purely parasitic trading strategies need to be hobbled.

    In the USA the discount brokers and cfd bucket shops sell their order flow to hft operations who make money in front running – does anybody know if we have hit those lows yet?

  4. Interesting point about the importance of equity – you are basically forecasting a system breakdown where equity becomes impossible to raise as the investors realize the stock price is not a function of the company management, over any time horizon. I have to agree that this end game is highly probable.

  5. Nonsense.

    Charts patterns in the markets now look no different now to any time in the past. The charts ARE the history of the markets, in its purest form. The mechanisms for trading change all the time of course, but markets and market behaviour are still human at core.

    Why? I agree with Glenn Neely


    Automated trading programs reflect the personal beliefs, financial capacity and goals of those involved in their creation. When hundreds or thousands of human-created trading systems interact in a free market, collectively they produce a more disciplined, fast-acting version of their human counter-parts. As a result, the individual psychology that went into the creation of each system will, collectively, produce price action that reflects mass human behavior.

    extracted from http://www.neowave.com/qow/qow-archive-1034.asp

    • Am I missing something here. Are you suggesting that we have algorithms that emulate human behaviour – fear – greed – love – lust – etc. I doubt it. If for instance the algorithms were all momentum driven then you would get an exponential market response as they would all kick in at the same time. So who is writing the code that mitigates that?

      • Nihilistic Prometheanism runs like a thread throughout human history. Besides market fundamentalism it was also an important element of Bolshevism, surrealism, futurism, and other intellectual movements of the twentieth century.

        In Greek mythology, Icarus’s father Daedalus, a talented and remarkable Athenian craftsman, constructed wings from feathers and wax. Overcome by the giddiness that flying lent him, Icarus soared through the sky curiously, but in the process he came too close to the sun, which melted the wax. Icarus kept flapping his wings but soon realized that he had no feathers left and that he was only flapping his bare arms, and so Icarus fell into the sea in the area which today bears his name, the Icarian Sea near Icaria, an island southwest of Samos.

        A position of lesser confidence and greater modesty was that of Leo Tolstoy, as the mathematician Ivars Peterson explains:

        **quote**

        It’s likely that Tolstoy was familiar with the work of Pierre-Simon Laplace (1749-1827), computer scientist Paul M.B. Vitányi of the University of Amsterdam notes in a recent, unpublished paper commenting on Tolstoy’s references to mathematics in War and Peace.

        The success of Newton’s laws of motion made it possible for Laplace to envision a completely transparent, deterministic world in which the entire past and future lay within reach. In principle, everything was predictable, and the finest detail accessible to calculation. You could construct yesterday’s or tomorrow’s world from what you knew today.

        At the same time, Laplace imagined the world as a mechanistic ensemble of moving and colliding particles that by their combined microscopic actions produce macroscopic effects. In assessing the role of probability in understanding such a world, Laplace wrote, “I am particularly concerned to determine the probability of causes and results, as exhibited in events that occur in large numbers, and to investigate the laws according to which that probability approaches a limit in proportion to the repetition of events.”

        “The investigation is one that deserves the attention of philosophers in showing how in the final analysis there is a regularity underlying the very things that seem to us to pertain entirely to chance, and in unveiling the hidden but constant causes on which that regularity depends,” Laplace added.

        Echoing Laplace, Tolstoy applied an analogous notion to understanding history. “To study the laws of history we must completely change the subject of our observation, must leave aside kings, ministers, and generals, and study the common, infinitesimally small elements by which the masses are moved,” Tolstoy wrote in War and Peace.

        From Vitányi’s perspective, however, Tolstoy was not really seeking in the calculus and Laplacian thought a usable model of history as much as he was trying to demonstrate the futility of the quest for explanations of wars’ causes and outcomes.

        “This is not a matter of saying that the future is in the laps of the gods,” Vitányi contends. “Rather that it is deterministic and determined precisely, [though] practically and possibly in principle unknowable by humans.”

        “To the imperfect human mind not all information can be available in a snapshot,” he emphasizes, “and so it is reduced to ignorance or at best probabilistic reasoning.”

        http://www.maa.org/mathland/mathtrek_10_29_01.html

        **end of quote**

    • Perhaps the Algo in the US a month or so ago which lost $440 million in a 45 min “spree” was just acting on impulse… a bit like my wife in a shoe shop.

      These algos serve no other purpose than to either skim money off the public when your trade hits the market or to push prices artificially up or down through force and false bids. Their only efficiency is speed certainly not logic or programmed “knowledge”

      The stock market has now become the equivalent of an Atlantic city craps table that’s got one leg shorter than the other 3. I would rather put my money in piss stained mattress than the stock market

  6. Good morning from Europe!

    Having worked nearly 3 years for a small fund utilising high-frequent trading technology let me just mention a few points to clear up some of the misconception regarding this technology:

    1) a lot of algos try to imitate market maker strategies in highly liquid stocks, i.e. to capture the bid-ask spread at limited risk. Many stock exchanges give limit orders (“passive orders”) a preferrable cost treatment in comparison to market orders (“active orders”) due to their role of providing liquidity. However, there are lots of other competitors trying to do the same and only very few market orders – even in liquid stocks. Thus, you need to make sure that you catch the few fish when it comes. To do this, one usually “stuffs” the orderbook with orders and does a cancellation strategy if the market moves against you (see the classic book of Maureen O’Hara about Market Microstructure – don’t confuse her with “Gone with the Wind”). That this strategy is not very profitable you can see at the performance of “equity market neutral funds” and the fact that at investment banks no market maker carries a higher title than “Vicepresident”/”Assistant Director”… (at least here in Europe).

    2) Some algos try to arbitrage price differences in a certain stock trading at several exchanges, i.e. NYSE, chi-X, BATS exchange, etc. Again, if you play passive orders you might not get anything and if you put actively market orders into the book your impact might kill the arbitrage spread.

    3) In the distant past some stock exchanges apparently gave special clients (high frequent traders with their computers next to the stock exchange computer), against a fee I beleive, the privilege to see market orders entering the electronic orderbook; so it was possible just to put a limit order in beforehand. Mind the speed of light for transmitting information according to Einstein. Obviously, one needs to have computing facilities next to the stock exchange computer to utilize this method – and the rents for these locations are rather high. I beleive that this market abuse has stopped some time ago.

    4) Some algos try to put red herings by pretending there is a vast buy order ahead, say, but they actually want to do the opposite and sell. And just when some other person/algo wants to profit from the information “about the vast buy order” by initiating some trades the first algo does the opposite. This is like in the “good old days” in New York around 1900 as described in the “Reminisence of a Stock Operator” by Edwin Levefre. Is this market abuse? Maybe, but again as investor you don’t want to tell what you are upto because of front-running…

    5) There are quantitative trading strategies which work on a longer time scale (e.g. a few days to a few weeks) similar to the simple 200d moving average rule. However, these strategies have a limited capacity of investable amount and secondly, if you persue them, EVERYONE on the street might find out about your activities. Thus, you need to put some “noise” to obfuscate your activities and we come to the above activities again.

    6) If you place a market order of just AUD 100’000 for RIO, say, at your stock broker, you can be sure it will be traded via a VWAP-algorithm (Volume weighted average price), i.e. it will be chopped up in smaller junks to get you the best execution price. Otherwise you would see all the best levels being cancelled and the orderbook would move significantly up or down.

    My conclusion altogether is that people need easy scapegoats for the bad performance of equity markets, especially in those countries which have privatized their pension system. The buy-and-hold mantra for stocks preached by politicians and pension advisors is not necessarily good for your own private pension investments.

    Best regards from the other side of the globe,

    Markus

  7. “Indeed, algorithmic trading is an extreme exemplification of the point that money IS rules. Algorithms are only possible if there is a rule based system on which the equations are based; mathematics requires basic laws in order to exist.”

    I really liked this, it’s quite insightful really, but I would go even further and suggest that the algorithms emerge from the system of rules itself, they are simply a definition of them, a reordering of the terms. Acting upon the system in which it lives, ultimately interwined, systems of rules beget algorithms and algorithms beget systems of rules.

    So it’s the wonderful nature of intelligent life that we understand and perceive these systems and can ourselves reorder the terms, typically to our advantage in one way or another.

    But your basic thesis appears to be that automation is the enemy, in the case of financial markets at any rate. I can’t really agree with this. Humans have had many strategies for making money on the markets, some good and some bad, but the rigorous application of their own system has made money for people for hundreds of years, at least in the case of Futures and other kinds of contracts, including equity and various kinds of options and warrants.

    So my question is, why is it inherently worse for an electromechanical machine to automate the task than it is for a human to work slower at the same thing in the pit of an outcry market? Is it that you think a person’s ability to know when to stop, or to know when something is wrong? Well, I would say people still run the machines, the machines do not control themselves. The machines and the algorithms are simply automated agents, acting diligently on their master’s instruction. Yes, complex software is difficult to write, and bugs happen – bugs are simply what happen when agent does not act correctly on your intended instruction. No one wants them, and if they end badly the people running the agent will be highly incentivised to correct the damage and probably paid a high price for the lesson too. As a person in an outcry market would be if they shouted the wrong thing because he was tired and didn’t hear your instruction properly.

    Is the market substantially worse or the value of a company substantially impact by the use of these agents? At the end of day, week, month, quarter, whatever your measure, right now, is equity priced incorrectly with 40% of the market being traded by HFT algorithms? I think the answer is that, yes, there have been some dramatic events, some that even lasted a few minutes, but ultimately the equity market is still pretty good for companies wanting to raise capital.

    And as for the government, can you honestly say that automating away the need for Julia Gillard and Tony Adbott isn’t at all tempting?

    • What is driving the development of these high frequency trading systems ? It is global pension funds, looking to diversify their strategic allocations away from actual productive investment, into the kind of strategies disconnected from the psychology of human investment decisions, which they believe will provide a hedge in times where volatility is rising sharply. What is frustrating to me about this, is that the people who have custody of these funds, despite all of their intelligence, have limited incentives to make difficult, long-term investment decisions that may be subject to volatile returns. Too much risk to capital flows out of their businesses, too much risk to their personal reputation and careers. So we have this circus of investment managers focused on limiting volatility within the pool of money they invest – or at the very least, creating the perception that volatility can be, if not eliminated, then substantially reduced. This is a farce . The trustees of pension funds – genuine long-term investors – have the benefit of making intelligent, considered, real investments in the economy that can lead to greater productivity. And yet more and more funds are being channeled into ‘alternatives’ buckets, into high frequency trading strategies, to reduce the perception of volatility within the broader pool of funds, and which is ultimately creating a mega-industry of doctorate level young men who women who in other times would be scientists, creating real economic value, but who are now lost to the lure of 20% performance fees on $1 billion dollar mandates detecting short-term price patterns created by other bright young things trading on short-term patterns created by …. farcical.

      • pith
        “What is driving the development of these high frequency trading systems ? ”

        Great question.
        I’d opt for one cause as the zero (negative)cost of money allowing the creation of SON’s and Prince’s ‘meta-money’. Banks play with zillions they don’t have be it in teh stock market or derivatives etc etc
        Put a real cost on money or credit and we would get very different outcomes.
        I don’t put this forward as the only driver but I’d bet that it is a significant factor

    • tone said:

      But your basic thesis appears to be that automation is the enemy, in the case of financial markets at any rate. I can’t really agree with this.

      Ah yes! Anyone who stands in the way of market fundamentalism is immediately branded as “anti-science,” “anti-technology” and of course “anti-progress.”

      But what does this “progress” rendered by the free-market evangelists look like? Arundhati Roy gives a wrenching description:

      **quote**

      Today, words like ‘progress’ and ‘development’ have become interchangeable with economic ‘reforms’, ‘deregulation’ and ‘privatisation’. ‘Freedom’ has come to mean ‘choice’. It has less to do with the human spirit than with different brands of deodorant. ‘Market’ no longer means a place where you go to buy provisions. The ‘market’ is a de-territorialised space where faceless corporations do business, including buying and selling ‘futures’. ‘Justice’ has come to mean ‘human rights’ (and of those, as they say, ‘a few will do’). This theft of language, this technique of usurping words and deploying them like weapons, of using them to mask intent and to mean exactly the opposite of what they have traditionally meant, has been one of the most brilliant strategic victories of the tsars of the new dispensation. It has allowed them to marginalise their detractors, deprive them of a language in which to voice their critique and dismiss them as being ‘anti-progress’, ‘anti-development’, ‘anti-reform’ and of course ‘anti-national’—negativists of the worst sort. Talk about saving a river or protecting a forest and they say, ‘Don’t you believe in Progress?’ To people whose land is being submerged by dam reservoirs and whose homes are being bulldozed they say, ‘Do you have an alternative development model?’ To those who believe that a government is duty-bound to provide people with basic education, healthcare and social security, they say, ‘You’re against the Market.’ And who except a cretin could be against a Market?

      To reclaim these stolen words requires explanations that are too tedious for a world with a short attention span, and too expensive in an era when free speech has become unaffordable for the poor. This language heist may prove to be the keystone of our undoing.

      Two decades of this kind of ‘Progress’ in India has created a vast middle class punch-drunk on sudden wealth and the sudden respect that comes with it—and a much, much vaster, desperate underclass. Tens of millions of people have been dispossessed and displaced from their land by floods, droughts and desertification caused by indiscriminate environmental engineering and massive infrastructural projects, dams, mines and special economic zones. All of them developed in the name of the poor, but really meant to service the rising demands of the new aristocracy.

      The battle for land lies at the heart of the ‘development’ debate. Before he became India’s finance minister, P. Chidambaram was Enron’s lawyer and member of the board of directors of Vedanta, a multinational mining corporation that is currently devastating the Niyamgiri hills in Orissa. Perhaps his career graph informed his worldview. Or maybe it’s the other way around. In an interview a year ago, he said that his vision was to get 85 per cent of India’s population to live in cities. Realising this ‘vision’ would require social engineering on an unimaginable scale. It would mean inducing, or forcing, about five hundred million people to migrate from the countryside into cities. That process is well under way and is quickly turning India into a police state in which people who refuse to surrender their land are being made to do so at gunpoint. Perhaps this is what makes it so easy for P. Chidambaram to move so seamlessly from being finance minister to being home minister. The portfolios are separated only by an osmotic membrane. Underlying this nightmare masquerading as ‘vision’ is the plan to free up vast tracts of land and all of India’s natural resources, leaving them ripe for corporate plunder. In effect, to reverse the post-independence policy of land reforms.

      http://www.outlookindia.com/article.aspx?250418

      **end of quote**

        • The lament for the dispossessed.

          Well, I don’t want to be seen as anti-social, and in fact I’m not anti-regulation/pro-market in any way. Properly organised, transparently administered and regulated markets are fine. Self regulation is generally prone to much riskier behavior, and likely to be proposed by those who see regulations that hinder their own self-advantage. That said, there can be too much regulation too, and striking the right balance is a difficult task for anyone, especially in a market with so many different kinds of interests to consider. I don’t think HFT is beyond regulation, but enforcement may be difficult, as it is with cases of insider trading and other uniquely human offenses. You have personified the algorithm, given it’s own will and intent, but this is a mistake.

          And more broadly, on the general point of progress, yes, I think that progress is important, if it comes at the expense of the disadvantaged, the least that should happen is they are duly compensated. Regrettably it’s likely that it’s this process that’s too often ignored, badly executed or perverted by the corrupt.

          And defining what progress is made and what direction it will take is more important still. Is progress the advancement of wealth for the few? Well, no, not in my view. It’s the standard of living for the general populace, and in particular the disadvantaged that marks true progress for a society. But in the process, some will be dislocated, some will lose what they had, in some cases it’s tragic and in others it’s simply a matter of competing interests, where neither is more or less deserving of regulatory favour.

          Does the right of blacksmith to continue business outweigh the right of an industrial toolmaker to create tools? Does the right of a small trader to continue his business outweigh the right of a man with a machine to do his business in the same market place? Well, no, of course not. The Blacksmith can still make bespoke tools, and must use his creative endevours to create a better product, one that is justifiably more expensive than the mass produced model. The good ones survived, as have watch makers and many others who were dispossessed from industrialization. But they now must charge a premium for their services, they can not compete price, but their skill allows them to compete on quality. And so too must the small trader.

          • . I don’t think HFT is beyond regulation, but enforcement may be difficult, as it is with cases of insider trading and other uniquely human offenses.

            There are two fairly easy ways to deal with HFT:

            * A tiny (fractions of a percent) per-transaction tax
            * All transactions are only processed once a minute (or even second), in random order to which they are received

  8. Hello SON:

    Has the following thought ever occurred to you – What is it
    algorithmic trading programs are responding to when issuing
    buy or sell orders in an electronic marketplace? It is only two
    things: prices of all other securities in the marketplace at any
    moment in time, and news (electronically monitored and digested by computers which impute price implications based
    thereon). If all “prices in the marketplace” are determined this
    way, then “news flows” become the only independent element.
    Not just “any” news flow, but those published by all of the
    “independent media” of the world. (sarc)
    If this is true, markets can be “moved” without even entering
    into them, whether by actual trades or large futures orders
    from entities needing to manipulate them. All that is needed
    is to report, (or not) in such a way as to guide the algorithms
    to where they are “needed” to go. Just a thought.

  9. Diogenes the CynicMEMBER

    Actually the true threat of algos is the following:
    (1) They sometimes are allowed faster access to the market infrastructure by the exchanges – this is a process issue but literally they can trade faster than others can, giving them an unfair speed advantage.
    (2) They can also be programmed to pump and dump..waiting for humans to move into a stock by mindlessly creating a small move in the stock price by pumping it up by a series of small buy bids, then when (true) volume picks up hammer the stock back down. I have started to notice a little of this in the Aussie market. Those dumped on tend to be quite annoyed and eventually leave the market meaning that liquidity actually falls! Thanks algos.
    (3) When things get dicey and markets are going to move in a big way due to overseas news, algos will simply be switched off. When you want and need the liquidity they will not be there. Open outcry markets are very different, human traders can still function in volatile swings giving the market traction and price setting ability…once those humans are gone the markets will tend to be even more volatile leading once again to less liquidity overall as many humans simply give up on equity markets and also driving the cost of equity ultimately higher.

    I doubt our authorities will act in time so we will see higher volatility, lower equity prices and less liquidity overall in the Aus equity market as a result of rising algo action.

  10. I have a deep and abiding mistrust of the regulator ASIC who is standing by whilst manipulation of stockmarkets is occuring under their collective noses.
    Of course they could not step into this career trap because none of them – I’ll say it again – none of them have any meaningful experience as a share trader . They would not know a bout of share manipulation if it jumped out of the screen and bit them.
    And wherefore ASX’s professed satisfation with the growth in individual share ownership ..once standing at 48% of the adult population.
    If ASIC is the pathetic key stone cop then ASX is the villain.
    Levying a fee on every order would be a start.

  11. Isn’t obvious that we are not anymore a market economy? What else should happen to people to realize that the system itself is broken and needs to be replaced. The financial crisis is not yet over. The world is heading to very grim future, because the new technologies are focused only on financial productivity (M-M’)via redistribution of wealth than on its genuine creation for the whole nation through enhancing real human productivity. Having in mind the speed of events, maybe I will be alive to witness the self-destruction of the financial system.

  12. I’m increasingly very sanguine on this. If the punters haven’t realised now that and decent business can get private equity capital or debt funding easily enough from the ocean of liquidity swamping the world then they have to be wearing a blind-fold.

    There’s only one reason that companies and funds might want the piddly amounts that the m&d investors can put in 😉