Really great blog post from Mark Cuban on the fact Wall Street has gone from being about value creation and allocating capital to arbitrage speculation and value hijacking.
The best analogy for traders? They are hackers.</strong> Just as hackers search for and exploit operating system and application shortcomings, traders do the same thing. A hacker wants to jump in front of your shopping cart and grab your credit card and then sell it. A high frequency trader wants to jump in front of your trade and then sell that stock to you. A hacker will tell you that they are serving a purpose by identifying the weak links in your system. A trader will tell you they deserve the pennies they are making on the trade because they provide liquidity to the market.
Astute, if I think a little over the top, but it’s definitely something to think about and a very good point about what Wall Street (and for example, all of London’s The City) represent. Wall Street has become about hijacking value, rather than creating and allocating it.econ