In spite of all of the talk about equity, fairness and helping the middle class that’s been circulating in Washington, the stock market is now rigged to help the rich and powerful – and little is being done about it.
The individual investor is told to invest long-term and plan ahead. But the real money is being made in nanoseconds by supercomputers. If you have the right algorithm, you don’t need to plan for the next minute, never mind 30 years from now.
The SEC has been clamping down on insider trading, in which individuals use knowledge that isn’t available to the public for personal gain. But is high-frequency trading (HFT), in which computers mine data to find and take advantage of pricing inefficiencies, any different?
It’s legal for computers to make decisions based on information that isn’t available to the public, but it’s not legal for people to do so.