FWIS3

60 Minutes had a great piece about this last night. I'm unconvinced the Invisible Hand has done its job yet. This new exchange they formed is a tiny fraction of the market. There are also apparently some investigations going on by the New York State's AG's office, but I'll but I believe there is a solution there when people get carted off to jail.

There is a lot of money behind this rigging of the system that is going to fight this tooth and nail.

Some times all the Invisible Hand does is give certain guys hand jobs.

No doubt, the money behind the rigging is going to fight this to the bitter end (however it plays out). But its refreshing that once a while, someone comes out with something that could beat those bastards at their own game.

I did like their solution - a box with 60 km of fiber optic cable.

Essentially, it's a form of insider trading. Which is illegal. And I think that's one angle that prosecutors will attack it from. Essentially when you take away the high tech aspect it's about knowing that someone wants to buy widgets and is willing to pay as much as $1 per widget. You know where you can buy the rights to 1 million widgets for 99 cents each. Then you sell the widgets to the guy who wants to buy 1 million widgets for $1 per widget. you pocket the 1 cent difference on 1 million widgets. a fast profit.

Sounds ok until you realize that the way they are doing it is buying the widgets before you can just so they can increase the price and sell them to you. They have knowledge that others do not and they are profiting by it. Which is IMO the text book definition of insider trading.

Take away insider trading and most of the worlds economies will crash.