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Public Input on proprietary trading

Dan Crawford | October 13, 2010 9:37 am

Hat tip to Simon Johnson through Bloomberg and Baseline Scenario:

Public Input for the Study Regarding the Implementation of the Prohibitions on Proprietary Trading and Certain Relationships With Hedge Funds and Private Equity Funds

Comments (3) | Digg Facebook Twitter |
3 Comments
  • Jack says:
    October 14, 2010 at 8:46 am

    So let me ask a rhetorical question.  How is it at all possible that business organizations that make up the financial industry can trade for their own accounts and not be considered to have some degree of insider knowledge.  Certainly they have far more knowledge of the trading directions than does the public or their own clients for whom they also trade.  If I go to a butcher do I not expect that he is putting aside the best cuts of meat for himself?  In the financial industry the result of trading is far more significant.  If your bookie is betting heavily on a specific team why is he then taking bets from his customers on the other team rather than advising those betters to bet on another  game?  And this issue doesn’t even address the issue of electronic trading taking place fractions of a second ahead of the market and fractions of a second after the market trades have been placed.

  • CreativeGenerations says:
    October 15, 2010 at 12:28 am

    Wow.  I want to post to the federal public imput registry.  But I think I should formulate my opinions better first.  Perhaps some people will share their experiences with ‘proprietary trading’ to help others expand their views (myself included).

    I’ll start.  Well, as far as the proprietary trading – I guess further input is needed as to how that word is defined exactly.  Once I know that, I know exactly what we’re talking about.

    About the not-trading-your-own-funds-thing…  Let’s see…  I have to be careful how I word this…

    I understand the purpose of the rule because I see the challenge of it in my own experience. 

    It is an important rule.  There is an impediment at this time in regards to how that rule plays out.  If the industry incumbents are in charge of what money moves, only the money they ‘approve’ of moves anyway. For a parralel example: oilmoney funds rarely invest to spark alternative energy because it ignites their own demise.  The same is true of other industries.

    In this case, if the financial industry insiders can fund their own wild financial schemes for personal gain, with the same guaruntee given to public pensions – that’s not right.

    I’m not really looking forward to reading the finreg.  [bites teeth]  But maybe I should so I can make a proper response. 

    Thanks Angry Bear for the tip.

  • Rdan says:
    October 15, 2010 at 9:00 am

    LOL…well creativegenerastions, that is how AB authors begin.  One friend, a computer programmer no less, calls us economic geeks.  But you know, the hardiness factor is rarely mentioned in the election debates.  Good luck, and report back.

    BTW, I never mention that with a little hard work he could understand a lot more of the national debate than he gets from any one blog or article, and that his understanding would not rely so heavily on op-eds no matter the author.

    Nor does he get the comments.  Too bad. 

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