No, I'm not talking about the blood of bankers spilling onto Wall St...
Rather, I am talking about the nefarious and ought-to-be-illegal phenomena of private, members only equity transaction networks. These are private exchanges where the large buyand sell side firms are able to make huge volume transactions with total anonymity of price and volume and are under no requirement to disclose information for the benefit of the public.
So what?
Well, they divert liquidity away from the public exchanges, they are a refuge for manipulation, they make it harder for individual investors to perform accurate analysis and quite simply, they are oligopolistic in nature and shouldn't be allowed.
Does anyone know of any law suits being filed against these dark pools or how I can get some regulatory body to look into this?
Cheers
B
I think you're on the wrong site if you are looking for someone to support regulations. This seems completely voluntary and would be allowed in a free economy.
baoinvestor: No, I'm not talking about the blood of bankers spilling onto Wall St... Rather, I am talking about the nefarious and ought-to-be-illegal phenomena of private, members only equity transaction networks. These are private exchanges where the large buyand sell side firms are able to make huge volume transactions with total anonymity of price and volume and are under no requirement to disclose information for the benefit of the public. So what? Well, they divert liquidity away from the public exchanges, they are a refuge for manipulation, they make it harder for individual investors to perform accurate analysis and quite simply, they are oligopolistic in nature and shouldn't be allowed. Does anyone know of any law suits being filed against these dark pools or how I can get some regulatory body to look into this? Cheers B
Well, you are absolutely accurate that there is mischief. I would argue that it is the current regulatory environment that permits such abilities to be centralized in this fashion. Void of the regulatory scheme and with a sound currency in place, they would lose money on such transactions like this. However, it is the current environment our state enforces that permits such things to occur like this and actually benefit them at our expense. The finger pointing needs to go at the source of the problem: The state ought not be involved in violating the liberties of others.
For permanent solutions to this problem call your legislators and request them repeal legal tender laws. Also, ask them to remove the regulations that create such an environment that makes this behavior profitable.
on the face of it, yes, but, if you consider that this voluntary activity bears an involuntary impediment on others through nothing productive other than the creation of an exclusive clique. It has real impact on people's ability to accurately value their holdings of stock. This is turn raises real issues of property rights. As a holder of common stock, and hence a fellow shareholder, do I not have the right to have my holdings fairly assessed in an open market?
Darl pools whilst voluntary for the participant are NOT open to all comers. As an individual investor my access to the dark pools is denied. This is not a free economy phenomena. One cannot be 'free' to interfer with the freedom of others.
To be against any type of legislation just becuase it has legislation or regulation is not sensible and is the same kind of thinking that has enabled bankers and liar-borrowers to indulge thier greed and stupidity to get us to where we are. Disclosure - full and transparent, is keystone to a free economy and it has to be enforced or it will be discarded once subject to the ill-will of the common man.
baoinvestor:It has real impact on people's ability to accurately value their holdings of stock. This is turn raises real issues of property rights. As a holder of common stock, and hence a fellow shareholder, do I not have the right to have my holdings fairly assessed in an open market?
You do not have a property right on other's subjective valuation of the stocks you intend to sell.
And that's really the only way to place a value on them, the amount someone else will buy them for which is usually accomplished through the current selling price of the stock.
baoinvestor:Darl pools whilst voluntary for the participant are NOT open to all comers. As an individual investor my access to the dark pools is denied. This is not a free economy phenomena. One cannot be 'free' to interfer with the freedom of others.
So you want to remove their right of freely associating (or not associating) with whomever they chose by forcing them to open their little club to whomever you deem worthy of joining?
baoinvestor:Disclosure - full and transparent, is keystone to a free economy and it has to be enforced or it will be discarded once subject to the ill-will of the common man.
Disclosure of what exactly?
Business strategy? Trade secrets? Marketing plans?
If you accept that people have the right to dispose of their property in whatever way they want as long as they don't aggress against others in the process then how do you justify an outside entity telling them what they need to disclose to ensure a 'free market'?
If you don't think a company discloses enough information for you to make an informed decision then don't buy their stock...simple as that.
AC et al, I thinnk you don't fully understand what dark pools are or else you won't be saying that their existence is NOT aggresious to others who are not members of these pools.
Dark Pools are private, exclusive networks where large firms are able to anonymously buy and sell very large blocks of stocks in such a way that they do not change the price of the stock on the public boards - hence they hide the true demand and supply of the stocks and manipulate the price in so doing. They do this outside of the disclosure and reporting of the public exchanges. What this means is that, stock, that is originally listed on the public exchanges - where ALL can view their price and buy-sell volumes - are suddenly being exchanged in places where the effects of supply and demand on price are maniplulated to the favour of the members and detriment of those who are excluded. I do not wish to be the arbiter of who can or cannot join these boards - I would say they should not be allowed to exist.
Also, I do not seek property rights on how OTHERS value their stock - they are free to express that opinion in whether they wish to hold the stock or sell it at whatever price the exchanges - public - set at the points of interaction of demand and supply. However, when those forces are manipulated and corrupted by their private dealings in the dark pools they in turn undermine MY property rights in being able to determine a true and fair value because I am unable to see the total demand and supply of stock.
We buy stock on public exchanges. The implicit expectation was that these stocks would be continued to be listed (subject to exchange regulations) and bought and sold on these public exchanges. When private firms trade public stock on private networks so as to manipulate the prices on the public boards - well...
I don't know how I can be clearer on this.
Huh? There's nothing wrong with people making private transfers.
baoinvestor:Dark Pools are private, exclusive networks where large firms are able to anonymously buy and sell very large blocks of stocks in such a way that they do not change the price of the stock on the public boards - hence they hide the true demand and supply of the stocks and manipulate the price in so doing. They do this outside of the disclosure and reporting of the public exchanges.
Are you saying that if I own some stocks I am forbidden to make a private transaction with them, like give them to my brother?
The stocks don't belong to the exchange.
Sorry, we know what you are saying, and we strongly disagree.
Sorry, but if anyone likens Dark Pools to 'gifts' between relatives or private individuals with a net zero effect then you don't know what I'm saying no matter how strongly you disagree.
Rather than try to turn a new subject into a shape that fits your preconceived views, it'd be better to see how the new shape challenges your views and if those views continue to hold water or not. That's the difference between dogma and progress.
Thank you all for your contributions, but I think this thread is pretty much done unless someone takes the time to fully read up on what Dark Pools are and the motivation of participants.
baoinvestor:Thank you all for your contributions, but I think this thread is pretty much done unless someone takes the time to fully read up on what Dark Pools are and the motivation of participants.
To make money? To circumvent the exchange?
Good for them.
You don't have a right to see "the total demand and supply of stock" because you don't own the stock. You own a fraction of stock, of which you can sell at any price you wish to whomever you wish at your own discretion. They own a fraction of stock and they can sell it at any price they wish and to whomever they wish at their own discretion. You just don't have the right to see how their trading of stocks should effect the price of stocks on the public market you happen to trade on.
Markets clear.
Well, it's been a long time since I visited this subject but I am still curious why Dark Pools are being defended. They are arbitrary divisions of people and the activities they can or cannot perform. In many ways, they are the same as unitions who engage in micro-subdivision of labour and defend their practices through laws and regulations.
Yes, those who engage in Dark Pools do so at a profit to themselves. BUT they escew the capital markets in so doing. Can we not learn something from Hazlitt in trying to look at the long-run effect of division in the capital markets? To say I do not have a right to view the effect of trading activities on stock that I own is just silly basically and to feel that it's a 'good for them' scenario shows a paucity of understanding in how efficient capital markets ought to operate. It might be 'good for them' but then so is high taxes 'good' for superfluous govt. workers who are unionized....
Opacity around price and especially it's influences will lead to a drop in the demand for equity from those who are outside this 'club'. This will ultimatey either raise the cost of capital (without a comensurate rise in productivity of capital and hence a negative) OR put more power into the hands of a very few large institutions who are well placed enough to see the influences on price and hence create an oligarchy of stock ownership and ergo the means of capital and production. Through no other justification than price information manipulation. Great. Real good....
It is unnecessary to delve into false utilitarianism.
Clearly people here will not support any regulation of economic (or any other) activity, just as they wouldn't go around killing union workers. Unions would be allowed in a free society, but without government influence, they would be likely to become irrelevant, or at least benign. Equally, your "dark pools" are likely to become irrelevant, as a poster hinted. However, if they were not to become irrelvant, I don't see how you can attack them - all free association is laudable.
The difference between libertarianism and socialism is that libertarians will tolerate the existence of a socialist community, but socialists can't tolerate a libertarian community.
baoinvestor:Rather than try to turn a new subject into a shape that fits your preconceived views, it'd be better to see how the new shape challenges your views and if those views continue to hold water or not. That's the difference between dogma and progress.
BAM!
Right there! My friends have said the same thing of me when I talk with them about libertarian principles. As consistent as they are, *I'M* the one backpeddeling. I do not believe this to be the case. I believe that everything they bring to the table gets filtered through the same set of principles to reach a conclusion, which they find odd because the "severity" of the behavior in question agitates their *personal* moral philosophy so much that they cannot shake their personal opinion from whether others should be allowed to engage in it.
Just like the boat-stealing-child-saving poster a few days ago: he was addicted to his personal scenario (which he claimed defeated the NAP) and couldn't, despite all the calm, well-reasoned replies, let it go. I see that scenario, the scenario on this thread, and the scenario on the thread I posted in reply to Brainpolice's comments to be one-in-the-same.
People are injecting their personal morality into the principles and then trying to get others to abide by them.
baoinvestor: No, I'm not talking about the blood of bankers spilling onto Wall St... Rather, I am talking about the nefarious and ought-to-be-illegal phenomena of private, members only equity transaction networks. These are private exchanges where the large buyand sell side firms are able to make huge volume transactions with total anonymity of price and volume and are under no requirement to disclose information for the benefit of the public.
anyone retarded enough to risk their money in an anonymous company that discloses zero information is more than welcome to in my opinion. people need to feel secure in where they invest, which is precisely why regulations are bad, since they are only a false sense of security coming from an unaccountable regulatory institution. people are as willing to put their money in an anonymous company as they are willing to eat random food found on the street.
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