Are traders a waste of space?

[schnootle]

After just reading an article on a company called "Tibra", the long time geek in me thought cool, then i found myself thinking what waste of talent and resources on something that doesn't really do anything.

http://www.tibra.com/

They have all the try hard geeky coolness of a technological startup, with none of the product.

The world obviously needs "investors" but other than providing market liquidity do traders provide the economy and society with anything useful for their efforts? Are they a sap on society?

How as a society can we funnel the energy of these sort of companies into solving the worlds real problems?

 

[BradK]

into solving the worlds real problems?

Good point! Where are the companies honest enough and not greedy enough not to try to fix the mess THEY created?

Im p!ssed, so divide what I say by 90

Brad

 

[So_Cynical]

Its not just traders, there's so many professions that do nothing for society and the world in general, half the people that wear a suit and tie are basically worthless to society.

 

[It's Snake Pliskin]

The world obviously needs "investors" but other than providing market liquidity do traders provide the economy and society with anything useful for their efforts? Are they a sap on society?

How as a society can we funnel the energy of these sort of companies into solving the worlds real problems?

Philanthropy. Flow on economic effects.

 

[condog]

I hear your point of view....its a tad extreme

Traders themselves provide a massive amount of emloyment, so I guess you need to question whether contributing to local employment is a contribution to society...

Personally I think its just like spending money at your local shops, your in a small way keeping a roof over someone elses head....

On face value "Ratings agencies do nothing" because they got it so wrong. But if your a banker and know how to bank, a ratings agency is your best and sometimes only means of getting a more informed, educated guess / opinion of the quality of a structured or diverse assett...

Might be worth a lot more thought....

 

[wayneL]

After just reading an article on a company called "Tibra", the long time geek in me thought cool, then i found myself thinking what waste of talent and resources on something that doesn't really do anything.

http://www.tibra.com/

They have all the try hard geeky coolness of a technological startup, with none of the product.

The world obviously needs "investors" but other than providing market liquidity do traders provide the economy and society with anything useful for their efforts? Are they a sap on society?

How as a society can we funnel the energy of these sort of companies into solving the worlds real problems?

I was just thinking that someone hadn't come up with argument for a while.

It's a boring one so won't bother to much but let's put it this way:

Society (via government) has done nothing but leech of me ever since I started working. Because of my circumstances, I don't receive value for money. When I needed support, they told me to go jump.

I support my family, I pay my taxes, I buy stuff, I pay for services, eat at restaurants, contribute to the economy in a million ways.

Aside from that, I have no desire to contribute to society... unless by volunteering. My choice. End of story.

Anybody trying to lay guilt trips on traders can just naff right off.

 

[nunthewiser]

I support my family, I pay my taxes, I buy stuff, I pay for services, eat at restaurants, contribute to the economy in a million ways.

Aside from that, I have no desire to contribute to society... unless by volunteering. My choice. End of story.

Anybody trying to lay guilt trips on traders can just naff right off.

Amen.

 

[matty2.0]

Traders and investors maintain the price function of the market economy, among other things (as you've mentioned; liquidity is another function).
By investing and engaging in arbitrage, they set prices so that the value of securities, commodities and derivatives can be determined.

It's sort of like maintaining the traffic lights at busy highways - people need to know the right signals so they can move along efficiently and with certainty. From oil prices, commodities, interest rates and securities.

The market is quite efficient, and this efficiency is needed. If there weren't any 'market' (i.e. traders, investors) then we wouldn't have anyone setting prices, and thus we wouldn't have 'a market'.

This is important for things such as commodities - farmers and investors need to be able to hedge properly so they need a proper market, or with IPOs - issuers need a market to come to fair value (if not premium value) so that they can raise capital and grow their businesses.

Countries that have highly developed capital and financial markets tend to enable investment flows to happen more efficiently, and thus tend to grow more than countries that don't have developed institutional mechanisms for free flowing financial capital.

 

[Garpal Gumnut]

Agree with all the foregoing.

It is what makes Anarchism such an attractive polity.

gg

 

[Timmy]

I like to know what industry/employment those accusing traders of being a waste of space are in.

 

[schnootle]

I like to know what industry/employment those accusing traders of being a waste of space are in.

Sorry if i came across rudely. I never intended to accuse anyone of anything, i was simply questioning whether having ones "best and brightest" aspiring to work for a company like Tibra is a good thing. Whether we would be better off trying to set up systems where people were attracted to industries with direct benefits to the development of their countries.

(I may have been a bit sensationalist earlier, it got attention though)

 

[Timmy]

Sorry if i came across rudely.

Schnootle, it is probably I who came across rudely - sorry. Mine was a brief post and probably was more abrupt than I intended.
You are certainly not the first to bring this topic up, it generates some interesting discussion.

 

[wayneL]

Sorry if i came across rudely. I never intended to accuse anyone of anything, i was simply questioning whether having ones "best and brightest" aspiring to work for a company like Tibra is a good thing. Whether we would be better off trying to set up systems where people were attracted to industries with direct benefits to the development of their countries.

(I may have been a bit sensationalist earlier, it got attention though)

The Australian Government wrecked my business via *unfair import duties. Never again will I think in terms of developing a country... because the country cares not about me.

*Import duty was removed on completed furniture, but was kept high on the raw materials we needed to manufacture in Australia.

 

[nulla nulla]

Its not just traders, there's so many professions that do nothing for society and the world in general, half the people that wear a suit and tie are basically worthless to society.

Why is it that to be of some "worth to society" you have to be a god botherer or volunteer for the homeless kittens society or run a youth group that later on turns out to be a front for organised paedophiles?
There are so many organisations out there that claim to be of immense "benefit to society" that turn out to be self serving and divisive to society.

What has "wearing a suit and tie" and being of "benefit to society" got to do with whether or not "traders are a waste of space"?

 

[matty2.0]

There are many fields in life where the payout can be lucrative, however the social benefits seem limited.

For example, professional athletes, actors and entertainers. The social benefits of watching sports or film are limited, however what is important in a monetary and economic sense, is that people demand these services and enjoy the benefits received from it (i.e entertainment), and so they are willing to pay the high salaries that the elite in this industry command. The same can be said for resources companies that help with providing the inputs for infrastructure projects however harm the environment in the process of doing so, or non-necessity goods like adult services, luxury goods, high fashion, as well as recreational goods (e.g. tobacco/smoking, horse racing/Melbourne Cup).

As long as there is demand, there is a market. Economics and markets are not about morals or a social conscience, it just is in an economic sense. But I would argue that traders and investors provide more of a social service to society than say tobacco companies, fashion, or professional athletes.

 

[gooner]

I think you can draw a distinction between types of trading.

OTC markets where the banks effectively bring buyers and sellers together, provide risk transfer, a good credit rating to deal with (albeit recent history does not support this totally), create liquidity etc is an example of a market where you can say those traders are providing a very useful function for the overall economy and provide reasonable added value.

As a theoretical example, if you look at me at home, trading on my PC, then the only value added is really some marginal liquidity. So yes, it really is a waste of space. Except it can help me feed my family and earn an income. Yes I can spend this money and contribute to the economy but this is really me using resources rather than contributing any. You can draw an analogy with retired people. We can't all be traders and we can't all be retired because there would be no one to produce our food, fill our teeth or teach our kids. If you were to get a list of occupations and order it by those you would get rid of first as not contributing much, then people trading at home would be close to top of the list IMO.

The likes of Tibra, Optiver, Sasquahar (sp?) fit somewhere between these two extremes in my view. They take lots of very smart graduates who want to earn lots of money. But wouldn't it be better if they worked in medical research or something else?

Given I am unemployed, this opinion may seem a tad harsh, but I would have the same opinion if I was a teacher, a doctor etc. I would quite happily work for one of these trading houses as I need to support my family but would not kid myself that the service provided is a particularly socially useful one.

 

[nomore4s]

I would've of thought just being employed or creating an income is a benefit to the country and society no matter what you are doing.

Traders still pay taxes & spend their money, I personally don't see any difference between a share trader and any other sort of traders- they are all people trying to make a living.

If you tried to ban trading or bring in some sort of regulations restricting traders I think financial markets might collapse.

 

[motorway]

What works is diversity and Freedom

We all can't be anything
All teachers
All Doctors
ALL Volunteers
All Sports Stars etc

Some can be those things ONLY because Others Are other things

Ecosystems are complex
and thrive on Diversity

Why did God make the Fly ...

That is the sort of Question being asked
and always gets asked

BEWARE the unintended Consequences of Good Intentions and Planned Improvement.

Traders are at least as useful as the Fly

In the relative modern world
compare the fortunes

Of first Holland <--1688--> England then the USA
And some where over that same Time line like eg Spain

The differences are because of relative--->

Markets, Innovation and freedom .. Plenty of Flies & Traders
Financial innovation and risk taking

A cascade of evolving niches--> Prosperity


There are NOT enough TRADERS
and more should be TRADEABLE on liquid markets
I see calls for employment contracts to be traded for example..


Motorway

 

[gooner]

I would've of thought just being employed or creating an income is a benefit to the country and society no matter what you are doing.

Traders still pay taxes & spend their money, I personally don't see any difference between a share trader and any other sort of traders- they are all people trying to make a living.

If you tried to ban trading or bring in some sort of regulations restricting traders I think financial markets might collapse.

Drug dealing, arms trading, David Tweed's share trading, offers, Peter Foster's slimming tea, trading property debenture "investments",

Sure drug dealing is generally illegal (except alcohol of course), but are all of the above really creating a "benefit to the country and society"

 

[prawn_86]

Drug dealing, arms trading, David Tweed's share trading, offers, Peter Foster's slimming tea, trading property debenture "investments",

Sure drug dealing is generally illegal (except alcohol of course), but are all of the above really creating a "benefit to the country and society"

Anything that generates a legal profit must pay taxes so therefore contributes to society. Even tobacco companies in Aus contribute >$10b pa in taxes.

Illegal profits like drug dealing make their way back into the system as the dealers etc have to spend the money pretty much straight away, as it cant be saved or put into a bank account. Hence they blow it on big TVs, stereos etc