People who lose money in a casino will never blame the casino. Someone who has been betting consistently all night, but losing will blame the cards and even him or herself for the bad luck. The winners are never at fault. Over the weekend many articles and blogs were published discussing the collapse in the U.S. stock market on Thursday of last week. The authors of the articles all pointed to the “rigged” game that speed traders and advantages of electronic trading that creates an unfair advantage in an otherwise even playing field.
There are two sides to this argument. Of course if one is legally allowed to take advantage of a rule, shouldn’t he or she take it? On the other hand, if there is an unreasonable advantage that is being used to manipulate the system, shouldn’t there be two separate “games” available to be played?
Wall Street has been compared to a casino for many years, but people have kept quiet about the possibility that critics may be right about this concept. The arguments that are made repeatedly about the advantages always come back to modern technology. Technology improves productivity and increases speed – but how much can a human increase speed and productivity without technology?
If Wall Street is just a playing field without the balls, goals and gloves; then performance enhancing drugs – high powered computers capable of beating the system – should be banned. However, in the increasingly demanding professional world of investing and trading, nobody has ever asked their boss for a slower computer. Mark Cuban, the owner of the Dallas Mavericks, and self made technology billionaire called for separate playing fields in the regulated stock market.
If Wall Street is just an arena of fans drunk with greed, they should not be operating the heavy machinery the big major league owners are supplying them with. A collapse of the stock price of a company should come at the hands of a mismanaged company, a peculiarity in the performance of a specific company’s earnings report, or any number of valid mistakes that a company made to affect the fundamentals that people have been taught to invest in.
Something needs to change. Faith in the system has been lost – look how many people are investing outside of the United States. America’s chances of rebounding from this recession were appearing to be on track, but people needed to blame Greece for a pullback in the markets, which could be fine, but the steroid-abusing traders manipulated the system to create profits that could be taken legally.
The losers here walked out of the casino scraping together their last pennies to buy a cup of coffee for one more day on the casino floor today – Monday.
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