Fwd: Warning signs of the coming financial armageddon, #569

[Henry C.K. Liu]

Doug:
Electronic Day Trading.
It seems to me that this is a positive trend in the socialization of the equity
markets. It will reduced the disproportional power of exploitative
intermediaries such a brokers and fund managers.  It will eliminate the
mystique of investing for the low income groups.
Mathematical trading models will be developed by smart college dropouts who
will become super stars.  Consumers will pay $100 for a easy-to-operate trading
model software package plus a $100/month for real time data to generate a
return of $2000/week.
There will be millions of little hedge funds bring about the emergence of
financial socialism.
And consumers from all walks of social background can participate, breaking the
incestuous guild tradition of Wall Street.
After all, given access and opportunity, it is much easy to learn the rules of
survial and success on Wall Street than the rules of survival in urban
ghettos.  There is no reason to suppose that street smart kids cannot do well
as traders.
When high school kids can operate no-brainer computer models to make
$100K/year, society will have to pay decent wages to get people to pick
strawberries or to sew shirt collars.
I wouldn't worry about this trend causing a financial armageddon, it will only
shift the current surplus value from the pockets of an undeserving few to the
pockets of the more deserving many.
There is no reason for Goldman partners to make $60 million/yr.  That same
profit can support 600 day traders at $100k/yr.
There was a news item a few days ago that if all Americans were to simply shift
their saving accounts deposits to CDs, they will collectively earn some $40
billion/yr more in extra interest.  There is so much institutionalized ripoffs
in the system against the little guy that any move toward direct control by
people on their own assets is a progressive development.
After all, the stupidity and irrational behavior of fund managers can only be
improved by day traders betting their own money.

Henry

Doug Henwood wrote:


> A friend writes....
>
> >Date: Mon, 22 Feb 1999 22:51:20 -0500 (EST)
> >To: Doug Henwood <dhenwood at panix.com>
> >Subject: Warning signs of the coming financial armageddon, #569
> >MIME-Version: 1.0
> >
> >http://www.amazon.com/exec/obidos/ASIN/0071345663/002-0212067-8575212
> >
> >(*Number 1* on the Amazon sales rank list)
>
> That was last night. Amazon recomputes its best seller list every hour, and
> it's still #1 this morning.
>
> It's..."How to Get Started in Electronic Day Trading : Everything You Need
> to Know to Play in Wall Street's Hottest Game."
>
> Doug