Sunday, May 9, 2010


Michael Durbin, in an op-ed in yesterday's Times, writes:

"Often, when an exchange operator receives an investor order and finds that another exchange has a better price, it will “flash” the order to a few select traders in its exchange a split second before sending it to market, giving those traders an opportunity to improve their price, too. When used properly, flashing ensures that investors trade at the best available prices."

Actually, we are not talking about "investors" here: the word Durbin wants is speculators. The stuff they teach in school about investors making profits because they take risks in helping finance a company, and the stuff they teach about the legitimacy of these profits (and their special tax status) is, in the immortal word of Richard Nixon: inoperative.

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