For the Wallstreet haters.

Discussion in 'Economics' started by KINGOFSHORTS, Apr 11, 2012.

  1. Eight

    Eight

    Actually something like 40% of all work is about fighting the third law of thermodynamics that says that things go to a lower state of order without an input of energy and intelligence [maintenance iow].. so the money for all that work just has to trickle down really. I don't think you can classify that expenditure as being about making more money.
     
    #11     Apr 11, 2012
  2. I bet George W. Bush had this "it all trickles down" perspective of the first post when he ran his temporary lower taxes on the rich.

    If stability can induce investments then options should not be viewed as a zero sum game. Theoretically businesses would be willing to lose some money on an aggregated level in options, if they can make it back and then some with their investments.
     
    #12     Apr 12, 2012
  3. Legalize insider trading.
    With the proliferation of internet/cellphones/print/electronic media it's impossible to prevent insider trading.
     
    #13     Apr 12, 2012
  4. Electronic are tools.

    Insider trading is an integrity, moral and cultural issue.
     
    #14     Apr 13, 2012
  5. ssrrkk

    ssrrkk

    I think it boils down to timescales of impact to the economy. When you invent a new technology, or build a bridge or airport, you as the manufacturer or construction contractor not only made profits and employed people by doing so, bu you also created a lasting (potential) increase in the GDP. To a lesser extent one can do that by increasing efficiencies in the market. But making tangible goods usually have a longer lasting impact to the economy (other than food). For example if you make a car, the person who bought the car is now in a position to make more money and live more efficiently for at least 5 years or more (e.g., drive to work, get work further away from home to use his or her talents, save time buying groceries etc). Of course, we are overlooking environmental costs when we do that but... If all you are doing is increasing efficiencies in the market, sure that will have an impact but the minute you stop doing it, that impact is not there. This is how the entire service sector works too. The "product" itself does not have a multiplier (except for the transient effect on efficiencies), only the profits generated from it does. But that profit is usually a result of zero sum, so it doesn't add to the economy. But if you created a new technology or build lasting infrastructure, the product in that case creates a true lasting multiplier in addition to the zero-sum profits of the manufacturer / contractor.
     
    #15     Apr 13, 2012
  6. so you're saying that goods add more to the economy than services do?
     
    #16     Apr 13, 2012
  7. LEAPup

    LEAPup

    Sorry, it's not a zero sum game. It's a minus sum game. You pay exchange fees, s/w fees, commissions, slippage, etc., no matter whether you're net positive at eod or not.
     
    #17     Apr 13, 2012
  8. Slippage has nothing to do with zero sum, just with where your orders are filled based on what other market participants will pay. I've never understood why traders (not criticizing you, in general, I see it a lot in this forum) don't get this. Throughout my career slippage has been profitable; I've made money from the spread and from people executing more slowly or poorly than me.

    The other fees make the game negative sum, I agree, as they all are institutional money vacuums (SEC/NASD/TAF/ECN Add-Take Spreads/etc.)
     
    #18     Apr 16, 2012
  9. Every business has expense. Cost of Materials, transportation,labor etc..

    Sell equity insurance, hedge accordingly and manage your risk. And make a a profit like any other business in America.
     
    #19     Apr 18, 2012
  10. This is not true. Options are derivatives of stocks which are not a zero sum game. Many option trades involve owning the derivative as well as options. I can write a covered call (own the stock and sell the call) while you buy the call. If the stock price has increased enough at the expiration date, we both make money.
     
    #20     Apr 19, 2012