Thread for people to explain how immigrants take jobs

[KrazyHorse]

The earnings you have have more utility in some uses than others. By using them for things of low utility you are just as much destroying utility as those actions you are damning others for.

No, by consuming instead of giving away more of my product than I already do through taxes I simply increase utility less than I would otherwise (if I lived life by attempting to maximize my product while simultaneously giving it away to the neediest). I agree that I am less moral than I would be if I did that (I would have maximized total utility), but the lack of perfection does not obviate relative moral claims. If somebody chose to engage in rent-seeking and then gave away everything he earned by rent-seeking we might have a more interesting question, but unless told otherwise I'm going to assume that everybody we're discussing consumes or invests on their own behalf the majority of their post-tax earnings.

[KrazyHorse]

Someone has a god complex.

I agree. This type of arrogance is all too common, and is revealed through statements which attempt to override the judgment of all other human beings by claiming to know better than the market what something is worth.

[Dinner]

There is a lot of hubris in that statement. It reminds me of a story about the build up to the great crash in the late 80's where partial deregulation and tax cuts helped the market go up and lots of traders suddenly thought they were so smart, after all they were making all so much more money than they were before, and then the whole thing comes crashing down in spectacular fashion and few of these supposed smart guys saw it coming. The "I'm making lots of money so I must be really smart and great" rational is a nice thing to tell ourselves but often it's just not the case and instead many folks were just in the right place at the right time going up and then the wrong place when it all went down. Hell, this is especially true because they've had monkeys randomly pick stocks (by picking up colored balls with stock names on them) and do better then the average for the supposedly smart guy experts.

I'm not saying the stock analysts are all dumb asses just that they have very high opinions of themselves (really an over estimation of their own abilities) and a lot of time their track record doesn't back up the braggadocio. Subject matter expertise does indeed matter but the hubris detracts from it especially when extreme hubris is combined with a propensity to take large risks with other people's money.

[Dinner]

I know KH is just on a bender (he's actually a nice guy in real life) but maybe we should direct him to the sociopath thread.

[Kidlicious]

The market doesn't know jack.

[KrazyHorse]

I know KH is just on a bender (he's actually a nice guy in real life) but maybe we should direct him to the sociopath thread.

I'm stone cold sober, son.

[KrazyHorse]

There is a lot of hubris in that statement. It reminds me of a story about the build up to the great crash in the late 80's where partial deregulation and tax cuts helped the market go up and lots of traders suddenly thought they were so smart, after all they were making all so much more money than they were before, and then the whole thing comes crashing down in spectacular fashion and few of these supposed smart guys saw it coming. The "I'm making lots of money so I must be really smart and great" rational is a nice thing to tell ourselves but often it's just not the case and instead many folks were just in the right place at the right time going up and then the wrong place when it all went down. Hell, this is especially true because they've had monkeys randomly pick stocks (by picking up colored balls with stock names on them) and do better then the average for the supposedly smart guy experts.

I'm not saying the stock analysts are all dumb asses just that they have very high opinions of themselves (really an over estimation of their own abilities) and a lot of time their track record doesn't back up the braggadocio. Subject matter expertise does indeed matter but the hubris detracts from it especially when extreme hubris is combined with a propensity to take large risks with other people's money.

In other words, you agree with what I said; most people who claim to know better than the market what something is worth are full of ****.

The problem with most people (and I'm assuming with yourself, as this post was obviously intended as a rebuttal) is that they think about this issue via some kind of mood affiliation rather than by applying a simple principle which has been demonstrated to be true time and again: both in labor markets and financial markets, the ability of an individual to provide better judgment than the market is extremely limited. I do not claim to know better than the market how a stock will perform, nor do I claim to know better than the market how much somebody produces, except when there are regulatory distortions introduced or externalities to be considered (and even then, I start from the market wage as a base)...

[Dinner]

I suppose, yes. Yes, I do.

[Aeson]

No, by consuming instead of giving away more of my product than I already do through taxes I simply increase utility less than I would otherwise (if I lived life by attempting to maximize my product while simultaneously giving it away to the neediest).

It's destroying (as in reducing) the utility of the money you control.

I agree that I am less moral than I would be if I did that (I would have maximized total utility), but the lack of perfection does not obviate relative moral claims.

Well at least we can agree there.

I would point out that the specific manner you've chosen to address these "relative moral claims" you are referencing here is very unlikely to be increasing utility.

If somebody chose to engage in rent-seeking and then gave away everything he earned by rent-seeking we might have a more interesting question, but unless told otherwise I'm going to assume that everybody we're discussing consumes or invests on their own behalf the majority of their post-tax earnings.

Just for clarity's sake, are you "discussing" me?

In any case, taking a most derogatory assumption of a broad swath of people, especially when that assumption is assuredly wrong in many cases to various extents (many people within the groups you are attacking do give charity) hardly seems like a utility building activity in and of itself. Seems more like stereotyping and maybe even a bit of hatemongering.

[Hauldren Collider]

KH, honest question, how do you explain HFT? Over short timescales it seems to me like it is relatively easy to beat the market, although the proliferation of HFT has made this less so (I imagine that this is part of the efficient market hypothesis, where ways to beat the market become incorporated into it, but still, it's beating the market.)

[KrazyHorse]

KH, honest question, how do you explain HFT? Over short timescales it seems to me like it is relatively easy to beat the market, although the proliferation of HFT has made this less so (I imagine that this is part of the efficient market hypothesis, where ways to beat the market become incorporated into it, but still, it's beating the market.)

What makes you think that HFT is some sort of giant gold mine of profits? The numbers I've seen are not particularly astounding.

I think there are some groups/individuals who generate some degree of alpha (whether on their own account or for investors). But they have to work hard at it to do so. If it were easy and free everybody would do it and the profits would disappear. For this reason I generally assume that the excess returns of hedge funds and other professional alpha generators tend to be eaten by the fund managers and fund employees rather than the investors (note that this assumption is actually the efficient equilibrium).

In other words, I think it's possible to generate excess returns, but only through unbelievable talent (being a David Einhorn, say) or through tremendous amounts of work and investment in people and/or technology.

[Dinner]

The claims which have been made is that HFT is indeed making a pretty penny and that it gives an unfair advantage to institutional investors with super computers planted right next door to the exchange which regular investors don't have. Allowing certain people to always be first in line, if you will.

[Dinner]

I think there are some groups/individuals who generate some degree of alpha (whether on their own account or for investors). But they have to work hard at it to do so. If it were easy and free everybody would do it and the profits would disappear.

That's not necessarily true in this case as being closer to the exchanges server would still allow some players (the guy who gets his server closest to the exchange's server) to retain an advantage simply due to geography of how close they can get their equipment to the exchanges equipment. Sure, you can reasonably say that with increased competition the margin would go down but some people would still have an inherent advantage over everyone else.

Then you have just the inherent unfairness of it. The guy with the fastest HFT machine closest tot he exchange already knows what other people are doing, in that the buy or sell order has already been issued, and in that partial second they can make millions of trades knowing exactly that they already have a greater fool on the hook before the original guy has even completed his order. I believe in markets but it has be an even playing field without some folks rigging the game.

[KrazyHorse]

The claims which have been made is that HFT is indeed making a pretty penny and that it gives an unfair advantage to institutional investors with super computers planted right next door to the exchange which regular investors don't have. Allowing certain people to always be first in line, if you will.

Please, do enlighten us with your definition of "fair".

[Hauldren Collider]

The claims which have been made is that HFT is indeed making a pretty penny and that it gives an unfair advantage to institutional investors with super computers planted right next door to the exchange which regular investors don't have. Allowing certain people to always be first in line, if you will.

How is that unfair?

EDIT: Should read the following posts first...

But seriously, they pay to get these supercomputers built so they can more accurately find prices than competitors, that seems like legitimate competition to me. It's no more unfair than having someone build a table with robotic machines out-compete someone who does manual carpentry.