A London trader recently charged with price manipulation appears to have been using a strategy designed to trigger high-frequency trading algorithms. Whether he used an algorithm himself is beside the point: he made money because the market is dominated by computer programs responding rapidly to incoming market data, and he understood the basic logic of their structure.
Read more...Economists generally, and especially neoliberal economists, take Jevons’s “proof” that markets maximize utility for all participants at face value, and have exalted it into a principle for the organization of society. The proof doesn’t stand up to close examination.
Read more...In a bit of synchronicity, two new papers confirm the long-held suspicion that Wall Street is sucking the life out of Main Street.
Read more...Silicon Valley labor law violator LinkedIn has a vision — “the Economic Graph” — and it’s sponsoring a $25,000 contest to find “researchers, academics, and data-driven thinkers” to help them make it a reality.[1] Here’s the vision in short form: There are approximately 3 billion people in the global workforce. LinkedIn’s vision is to create […]
Read more...Yves here. The main way that those of the left-leaning persuasion see Amazon as a bad guy is for its treatment of warehouse workers, who work in physically-taxing conditions and are paid what is barely a living wage for a single person.
As Matt Stoller describes in this piece, Amazon’s ambitions are monopolistic, and they’ve already gone a long way towards achieving that ambition in a large number of markets. They regularly engage in predatory pricing to crush competitors and gain market share. Their dominant position then allows them to chose how to extract more profit, which is usually a combination of squeezing suppliers and raising prices.
Antitrust has become close to a dead letter in the US. Amazon makes for a worthy object for reviving it.
Read more...Medicare prices are set by the AMA’s Relative Value System Update Committee, which incentivizes procedures instead of primary care, leading to greater costs and more invasive care.
Read more...Railway privatization was sold to the public on the basis it would “provide better value for money for the public who travel by rail.” Who could have predicted it wouldn’t work out?
Read more...This post first ran on January 7, 2013 By Matt Stoller, who writes for Salon and has contributed to Politico, Alternet, Salon, The Nation and Reuters. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller Throughout much of the United States, cell phone service is terrible (so is broadband, […]
Read more...Banana Republic thinks there’s enough exuberance left out there to sell this “Startup Guy” look to millions of non-startup guys. That’s rather a lot of exuberance.
Read more...The Financial Times has an article on how corporate bond dealers are going to create a new trading hub to try to preserve their market position while “boosting liquidity” in the market. Narrowly speaking, there’s nothing wrong with the piece as a description of investor unhappiness and planned bank responses. But it curiously missed how Fed policy has helped generate conditions that are reducing corporate bond market liquidity.
Read more...Satyajit Das reviews Michael Lewis’ book Flash Boys. Das finds it to be deeply flawed,: deficient in its understanding of HFT and not very well written.
Read more...Why defining “liquidity trap” precisely matters in understanding crisis dynamics, and Keynes, and not Krugman, got it right.
Read more...Bubbles have become a major focus of discussion in today’s financial markets. But very few people actually define what they mean when describing this financial phenomenon.
Read more...The Obama administration and the mainstream media are now talking up an imminent recovery, perhaps even a modest boom. There is no reason why we should be optimistic now.
Read more...I highly recommend this short interview by John Authers of the Financial Times with Amar Bhidé, a professor at Tufts, in which he argues that a proper reading of Friedrich Hayek would lead to considerable skepticism about whether most of the changes in finance over the last three decades actually represent progress.
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