by William Thornton » Wed Nov 19, 2014 11:32 am
Keith, get the book and read it.
Regulation National Market System, NMS for short
Lewis says, "...Reg NMS was well-meaning and sensible...however, [it] contained a loophole...[and] institutionalized a more pernicious inequality. A small class of insiders with the resources to create speed were now allowed to preview the market and trad on what they had seen."
Sort of like one poker player at the table who could afford a set of glasses that permitted him to see the other player's cards.
The book isn't indexed but this is the most salient set of quotes I can find quickly.
I don't know if Reg NMS was changed since then. I don't recall Lewis saying so.
My default position is that there will always be well-intentioned regulators who will be outsmarted by private citizens who have enough profit incentive. Like gummit control on compensation, taxation, etc. Those with resources will be able to outsmart the regulators. This is not to say that there should be no gummit regluations to create a level playing field, only that when we see gummit in action, it is slow, always reacting, seldom efficient and effective.
I'd be interested in your view after you read the book. I thought it was a very interesting read.
My stray thoughts on SBC stuff may be found at my blog,