That's because the places you'd want to unload counterfeit bills are small shops with high volume low-dollar items. Places like fast food restaurants and gas stations and other establishments with similar characteristics.
These shops figured this out and stopped accepting $50+ denominations. Since it's not possible for a counterfeiter to unload denominations of $50 or more, they switched to the highest they could get away with - $20 bills.
Thus, the $20 bill is by far the most commonly counterfeited bill. The denomination is low enough that it isn't practical to refuse it, as too many legitimate customers will be turned away. It's the best counterfeiters can do, but they'd much rather do a whole lot more.
You are perfectly free to come up with some other form of payment for your transactions, but nothing other than Federal Reserve notes have the backing of US law. That does not mean you are required to pay or accept cash for any transaction, it just means in certain situations (specifically debt) you cannot refuse cash.
In other words, you're free to print up some paper and trade with it, but you can't try to pass it off as a Federal Reserve note or you'll land yourself in jail for counterfeiting. It also, obviously, won't be legal tender and can be refused by anyone on either side of the transaction for any reason.
At the end of the day, anyone doing business in the USA must accept US currency; you cannot create your own or use any other foreign currency.
Which is completely false. You are not required to accept US currency for trade, nor are you disallowed from accepting any other form of payment. If that were the case, then checks, bank transfers, credit, and debit cards would all be illegal. None of those are certified by the US government as legal tender. Federal Reserve notes are the only form of currency that has such a designation.
What the law essentially says is, if you owe someone a debt, they cannot refuse the Federal Reserve note as payment for that debt. Also, if the person owed the debt refuses other forms of payment, the debtor must pay in cash, as no other form of currency has legal tender status. A prior agreement to use some other form of payment (even none-equivalent equivalent forms, like small round rocks) is perfectly acceptable. Also, you can refuse to complete a transaction for any reason, including refusing to accept or give Federal Reserve notes. In this case, there is no debt, so the cash rule does not apply. That's what Apple did, they simply refused all cash transactions, which is perfectly legal. Had they been handing them out on payment plans, however, they could not legally refuse cash as payment.
The law could also say that small round rocks are legal tender for all debts in the U.S., but that would not mean anybody is required to actually accept small round rocks as payment.
At the same time, even though a bag of pistachios is not legal tender, a private party is perfectly free to accept it as payment for goods or services at whatever rate they deem acceptable. Hopefully they don't though, unless they're only trading with pistachio growers and really, really love pistachios. Not too many others are going to be willing to pay in pistachios.
All the legal tender means is that the US Government is certifying that that little piece of paper is good for the dollar amount printed on it. This is absolutely necessary, because that piece of paper has exactly zero intrinsic value for use as currency without such backing. That doesn't mean you have to accept it as payment for goods or services if you do not wish to.
In 1998, in Delaware County, Pa., Richard Jackson was sentenced to life in prison for murder based largely on a fingerprint match to which three experts had testified. The defense argued, unsuccessfully, that it was a bad match. But after Jackson spent more than two years in prison the prosecution conceded the error, and he was freed. In Scotland a murder case was upended when detectives found a fingerprint at the scene of the crime that belonged to a police officer -- who claimed she'd never been there in the first place. To verify her claim, she brought in two fingerprint analysts who attested that not only had her fingerprint been misidentified, but so had the print, found on a tin at the home of the accused, originally attributed to the victim.
As these cases suggest, the relevant question isn't whether fingerprints could ever be exactly alike -- it's whether they are ever similar enough to fool a fingerprint examiner. And the answer, it's increasingly, unnervingly clear, is a resounding yes. A recent proficiency test found that as many as one out of five fingerprint examiners misidentified fingerprint samples./quote
The pressure has been there since the beginning. It started well before we were a nation, and it continues to this day. Basically it has taken 200 years to erode this far, but it seems to have made it to the fast-track lately.
Fortunately, our system is set up such that it can always self correct, even if it takes a while. Slavery is a perfect example of that (it took two different Supreme Courts before it was set right).
Unlike in the UK, we don't really consider it a new government the way you guys do. It's just changing who runs the government. I know it's mostly semantics, but it affects how we view our government, and the amount of change we expect.
We expect certain things to change, but we know the vast majority of things will stay exactly the same, or continue moving in the direction it has always been moving.
It is exactly the same, if more invasive, as fingerprinting. You get arrested, you get fingerprinted. Period. It stays in the database forever.
I'm not sure how many people have tried to fight fingerprints, but there has obviously never been a successful constitutionality challenge against it. DNA is simply a more complete, and more invasive, fingerprint.
The problem is having too much data that means too little, or not enough data that means too much.
Take the summary's example:
If a person starts drinking day in and day out after a cancer diagnosis and dies from acute cirrhosis, did he kill himself?
If your goal is to find deaths caused by Cancer, and your statistic is "Within six months 40% of people with cancer die", is it the cancer that is killing them? How many of them are dieing in automobile accidents in that period of time? How many fell off a roof? Should a guy who drinks himself to death because he has cancer count as a death caused by cancer? What about a guy who was already a heavy drinker and dying of cirrhosis, but cirrhosis killed him before cancer? How do you tell the two of those apart?
It makes a seemingly straightforward number debatable at best, and completely unreliable no matter how you look at it, unless your criteria are very narrowly defined. However, the more narrow the definition, the fewer applications the data has.
The only way to measure that would be to interview my customers and their bosses. We'd have to pry for an hour into their effectiveness to find out if I properly completed a job that took me five minutes.
It's not really as hard as that. There is an interim marker you can use that is nearly as good as anything you'll get from an interview. All you really need to know is if the customers are happy with your service. If your service eats up a lot of their time, i.e. doesn't keep them working as long as possible, they won't be happy.
There are still limits to that - it doesn't work if your IT department is servicing 3,000 users. However, if it's 300 users with a single point of contact, you'll know pretty quickly how well you are performing with just a vague "good or bad" rating. I'm in the latter situation, others in my group are in the former. They are all extremely jealous because I don't need a ticketing system to track my performance, which makes my job more enjoyable and increases my productivity, while they need a raw number which can be easily compared to the performance contract and the performance of the rest of the company.
Cancer can last years, you can easily destroy your liver before then if you spend all your time drinking.
Poisoning requires a very large amount of alcohol in your blood at one time, well above the level that liver damage starts. If you maintain a constant blood-alcohol level above what your liver can handle you will be actively destroying your liver.
It's certainly possible for a depressed non-drinker to turn to drinking as a form of self-medication and destroy their liver before the cancer does. Poison levels are not required.
The stock market has no basis in reality. They like to pretend it does, but it doesn't. There are all sorts of excuses and 'reasons' why it does, but it has no more basis in reality than paper currency.
Spread over weeks, months, and especially years, the stock market has a very solid basis in reality. You can usually get a good idea of how successful a company was the previous year just by comparing stock prices at the start and finish of the year. If it was lower than it started, they probably weren't doing so hot. If higher, they probably did great.
Take the housing crash - it took about a year for most companies stocks to come back to their pre-crash levels, and the strongest companies either didn't fall at all or actually gained. This very much reflected how well their company was doing in the overall market.
What is only tenuously based in reality are the day to day and intra-day market prices. If you are buying and selling stocks over the course of days, hours, minutes, seconds, or milliseconds, you are speculating - not investing.
Investing is sound, speculation is gambling. That's the way it works.
It's great, if you ignore the terrible social consequences of all that fun.
Except there was a net positive - a railroad system that fostered trade and travel, which benefits everyone.
It's funny, I often read about the crazy social experiments done by Stalin and Mao that resulted in terrible catastrophes, but when it's the "market" doing it, it's OK.
Because when the market does it, it means people choose their path, sometimes fail and sometimes win. It's usually a net gain for the average citizen. With Stalin and Mao, it's net loss for the people, in a big way.
You took away the long lesson from history, my friend.
Long term the market is very rational. Short term it's anywhere from somewhat rational to completely rational.
The golden rule of the stock market is to never watch the live stock ticker unless you are day trading. Investors (as opposed to speculators) who handled things properly would not have noticed a thing. Brokerage firms who day-trade with their investor's money instead of actually investing need to be fired (as in, the investors need to take their money elsewhere).
However, they tell you when you sign up for a stock market mutual fund that it is high-risk and volatile. It's very predictable over long periods of time, but it is very unpredictable in the short term. Expecting it to be otherwise is foolish.
This is the antithesis of these millisecond traders, and keeps the market safe for the everyman.
Actually it makes it far more likely that regular investors are going to jump on the latest bandwagon, and end up losing everything. The market came back almost the entire 1000 points within 30 seconds. The only people who lost any money were speculators. This was an extremely sharp but also extremely short blip in the market caused by a sort of "perfect storm" of conditions.
Investors investing properly didn't lose anything at all. Investors who act more like speculators may have lost an assload of money, while some speculators lost a ton of money and others made a ton of money.
Imagine if investors had 10 minutes to notice the 1000 point drop, instead of 30 seconds? Hundreds of thousands of people would have lost everything, because they think "Oh my god I need to dump this NOW!" when in reality they were at no real risk of losing anything.
All a delay is going to do is build up the changes, making the market more sudden, more volatile, and more dangerous to investors (though it would be an absolute dream for speculators). For example, if investment firms (not speculators) were basing their investments on a rolling 1 minute average instead of millisecond changes they would not even have known there was a huge market spike. They would have missed it completely.
It's a problem with investment strategy, not a problem with the markets. The market corrected itself just fine, and far faster than a market watchdog would.
Has anybody bothered to look into why the derivatives market grew into such a huge market in only 15 years or so?
It was because regulation had forced lenders, especially large banks, to take on bad debt in the form of low-income mortgages. Community groups like Acorn were given the ability to coerce lenders into giving loans that ordinarily nobody in their right mind would give. They had to unload the risk somehow, and derivatives were essentially insurance against the bad debt.
Unfortunately, derivatives can't handle a major housing market crash, so both the buyers and the sellers went tango-uniform in the deal. Since derivatives spread the risk but didn't effectively mitigate it in the case of foreclosures, many more people were affected by the crash, though fewer banks went under than otherwise would have. The poster child for low-income loans - CountryWide, was the least stable and the first to fall. The market followed soon after.
Good regulation can stimulate the economy and make everybody's life better, but we have to be sure it's good regulation, not just any old regulation will do.
Bad regulation is worse than no regulation. It either chokes the economy or sets it up for massive failure.
Are you talking about the market that dropped 1000 points and corrected itself 30 seconds later?
Or the housing crash caused by regulators forcing bad debt on banks and mortgage companies (in the name of helping the poor), which forced them to unload that debt by buying questionable derivatives as a hedge against forclosures?
Because frankly, the former worked just fine - if a little scary, and the "experts" were absolutely against the latter but Congress went ahead with it anyway. Fifteen years later and BOOM, the bottom dropped out.
There is a real problem with the market right now with a high risk.
Where is the problem? The DOW bounced back almost completely in 30 seconds. A very small number of extremely lucky day-traders could have made millions, a few extremely unlucky day-traders lost millions to the lucky traders, but almost everyone else stayed exactly where they were.
This affected speculators only, it did not affect investors (unless you happened to be lucky enough to invest in a particular stock at precisely the right moment).
In other words, the market worked just fine, it's just a little scary. No doubt those who lost their shirt will be adjusting their strategies to prevent such a mistake again, if they don't they'll go broke. If they were playing with more money than they could afford to lose, they are fools. That's the way the world works. It's foolish to try to short circuit that.
The Prisoner's Dilemma in practice never plays out the way Game Theory suggests it will. In fact, Game Theory rarely describes reality in any meaningful way. It falls far short of something that can be reliably applied to real-life scenarios.
When you're talking a one time transaction, PD's best solution is defection, or screw the other guy before he can screw you. Iterated PD, however, optimizes with tit for tat in a general sense. However, investors following a form of Pavlov's strategy, or "win-stay, lose-switch" could create a form of legal collusion which would give them massive advantages in the market.
The stock market operates closer to nature than game theory, with many people investing in a stock (cooperation) before people decide it's too risky and sell off (defection). This happens even in millisecond trades. Overall, a sound company continually rises in the stock market. This is not how game theory predicts the transactions should flow (which is exactly what you are suggesting will happen).
The giant drop was nothing more than a hiccup in the system - a problem with the algorithms investors use.
You're an idiot if you believe the people who lost their shirt are just going to sit there and do nothing instead of adjusting their algorithms to prevent such an occasion in the future. It's bullshit to call in the SEC on this, it's completely unnecessary. Any investor willing to throw away his money deserves to lose it.
Fix the problem, don't break the rules - adding a 1 second delay is almost invariably cause investment-loading and some pretty obscene second-by-second swings.
At least until someone ponies up and buys one that is lower than yours.
Which just proves that it is an investment like any other. If I can buy 10 apartments in prime real estate and paint them to gain an advantage over my competitor such that I can charge higher rent for the same size/area, in what way is that wrong? Would it then be wrong of my competitor to furnish all his apartments so he can charge an even higher rate than I can?
The stock market has always been a form of gambling that just happens to provide a net benefit to the economy. Which new player has the best scheme to give themselves an edge does not matter in the slightest. A lot of schemes provide no benefit at all. Some provide marginal benefits at great cost (your 500nsec vs 600nsec router).
I'm no Electronics Engineer, but a previous poster, Mangu, is, and he gave the solution quite nicely:
I have a degree in Electronics Engineering and had to go through three courses on feedback systems and servomechanisms. What you are proposing may seem sensible, but that's not how nature works.
Feedback control systems can become unstable, but inserting delays into the feedback loop is about the *worst* thing you can do to destabilize them. If you want to stabilize a feedback system you should insert a "low pass" filter in the loop, not a delay.
A delay means that a lot of change will accumulate and suddenly be released. Putting a one day delay would mean that all the buy or sell orders would be stored hidden somewhere and then, all of a sudden, the market would become aware of that trend.
A low pass filter is, more or less, like a moving average. With a low pass filter, the market would get information on the average of the last X hours or days of transactions. That way everybody would be allowed to update instantly, to a microsecond precision if they wanted to, their estimates of the market trends, but those would not be instantaneous trends, they would be longer range.
Instead of limiting how fast market transactions can be done, it would be much better to limit the speed of the information on the system. Do not divulge *every* price for every transaction, but only the average of some period. This average can be updated every nanosecond if people want so, it will make no difference.
As is typical in Washington, this is something that seems to make sense, but in reality is almost certainly just going to fuck things up far worse than it already is.
A corporation also can't be considered dead, which is the prime requirement of the D&R contract. You must have been alive to be considered dead. There is even a clause for "dead but interactive", specifically covering ghosts and angels, but would probably also extend to zombies and corporations as well (assuming a corp could pass the dead test).
Even if they got around that part though, this part would screw them out the yin-yang:
After your following the terms of this license, the author has vowed to repudiate your claim, meaning that the validity of this contract will no longer be recognized. This license will be unexpectedly revoked (at a time which is designated to be most inconvenient) and involved heirs will be punished to the fullest extent of the law.
I'm not sure how that works if the license specifically removes the license at a date of the licensor's choosing. May or may not be enforceable, though it's very clear and agreed to by the other party, so I don't know.
Windows for Battleships is specifically certified for such applications.
It's just like the operating systems that run the equipment on fighter jets - they are very thoroughly tested and cleared by the military first.
Unlike some oil companies I know, which buy the most expensive product then trust the vendor to tell them how awesome it is even though all their employees are screaming about how it runs slower and with fewer features than the 30 year old tech they were using before. *twitch*
To be fair, that list lists Canada three times: Canada, New Brunswick, and Quebec are all member states. That lists governments that are French speaking, not just countries. There are 50 major governments in the US, for example, and thousands of minor governments.
I'm far too lazy to look at anything else in the list, but I'm sure there are more "governments within governments" that are recognized separately.
Slashdot Mirror
That's because the places you'd want to unload counterfeit bills are small shops with high volume low-dollar items. Places like fast food restaurants and gas stations and other establishments with similar characteristics.
These shops figured this out and stopped accepting $50+ denominations. Since it's not possible for a counterfeiter to unload denominations of $50 or more, they switched to the highest they could get away with - $20 bills.
Thus, the $20 bill is by far the most commonly counterfeited bill. The denomination is low enough that it isn't practical to refuse it, as too many legitimate customers will be turned away. It's the best counterfeiters can do, but they'd much rather do a whole lot more.
You are perfectly free to come up with some other form of payment for your transactions, but nothing other than Federal Reserve notes have the backing of US law. That does not mean you are required to pay or accept cash for any transaction, it just means in certain situations (specifically debt) you cannot refuse cash.
In other words, you're free to print up some paper and trade with it, but you can't try to pass it off as a Federal Reserve note or you'll land yourself in jail for counterfeiting. It also, obviously, won't be legal tender and can be refused by anyone on either side of the transaction for any reason.
At the end of the day, anyone doing business in the USA must accept US currency; you cannot create your own or use any other foreign currency.
Which is completely false. You are not required to accept US currency for trade, nor are you disallowed from accepting any other form of payment. If that were the case, then checks, bank transfers, credit, and debit cards would all be illegal. None of those are certified by the US government as legal tender. Federal Reserve notes are the only form of currency that has such a designation.
What the law essentially says is, if you owe someone a debt, they cannot refuse the Federal Reserve note as payment for that debt. Also, if the person owed the debt refuses other forms of payment, the debtor must pay in cash, as no other form of currency has legal tender status. A prior agreement to use some other form of payment (even none-equivalent equivalent forms, like small round rocks) is perfectly acceptable. Also, you can refuse to complete a transaction for any reason, including refusing to accept or give Federal Reserve notes. In this case, there is no debt, so the cash rule does not apply. That's what Apple did, they simply refused all cash transactions, which is perfectly legal. Had they been handing them out on payment plans, however, they could not legally refuse cash as payment.
It sure is legal.
The law could also say that small round rocks are legal tender for all debts in the U.S., but that would not mean anybody is required to actually accept small round rocks as payment.
At the same time, even though a bag of pistachios is not legal tender, a private party is perfectly free to accept it as payment for goods or services at whatever rate they deem acceptable. Hopefully they don't though, unless they're only trading with pistachio growers and really, really love pistachios. Not too many others are going to be willing to pay in pistachios.
All the legal tender means is that the US Government is certifying that that little piece of paper is good for the dollar amount printed on it. This is absolutely necessary, because that piece of paper has exactly zero intrinsic value for use as currency without such backing. That doesn't mean you have to accept it as payment for goods or services if you do not wish to.
except the bit about implicating others with close fingerprint profiles.
That's actually entirely possible with finger prints, they are not unique.
http://truthinjustice.org/fingerprint-myth.htm
In 1998, in Delaware County, Pa., Richard Jackson was sentenced to life in prison for murder based largely on a fingerprint match to which three experts had testified. The defense argued, unsuccessfully, that it was a bad match. But after Jackson spent more than two years in prison the prosecution conceded the error, and he was freed. In Scotland a murder case was upended when detectives found a fingerprint at the scene of the crime that belonged to a police officer -- who claimed she'd never been there in the first place. To verify her claim, she brought in two fingerprint analysts who attested that not only had her fingerprint been misidentified, but so had the print, found on a tin at the home of the accused, originally attributed to the victim.
As these cases suggest, the relevant question isn't whether fingerprints could ever be exactly alike -- it's whether they are ever similar enough to fool a fingerprint examiner. And the answer, it's increasingly, unnervingly clear, is a resounding yes. A recent proficiency test found that as many as one out of five fingerprint examiners misidentified fingerprint samples./quote
The pressure has been there since the beginning. It started well before we were a nation, and it continues to this day. Basically it has taken 200 years to erode this far, but it seems to have made it to the fast-track lately.
Fortunately, our system is set up such that it can always self correct, even if it takes a while. Slavery is a perfect example of that (it took two different Supreme Courts before it was set right).
Unlike in the UK, we don't really consider it a new government the way you guys do. It's just changing who runs the government. I know it's mostly semantics, but it affects how we view our government, and the amount of change we expect.
We expect certain things to change, but we know the vast majority of things will stay exactly the same, or continue moving in the direction it has always been moving.
It is exactly the same, if more invasive, as fingerprinting. You get arrested, you get fingerprinted. Period. It stays in the database forever.
I'm not sure how many people have tried to fight fingerprints, but there has obviously never been a successful constitutionality challenge against it. DNA is simply a more complete, and more invasive, fingerprint.
Well, back in my day, statistics were made up on the spot 42% of the time. Times, they are a changing.
The problem is having too much data that means too little, or not enough data that means too much.
Take the summary's example:
If a person starts drinking day in and day out after a cancer diagnosis and dies from acute cirrhosis, did he kill himself?
If your goal is to find deaths caused by Cancer, and your statistic is "Within six months 40% of people with cancer die", is it the cancer that is killing them? How many of them are dieing in automobile accidents in that period of time? How many fell off a roof? Should a guy who drinks himself to death because he has cancer count as a death caused by cancer? What about a guy who was already a heavy drinker and dying of cirrhosis, but cirrhosis killed him before cancer? How do you tell the two of those apart?
It makes a seemingly straightforward number debatable at best, and completely unreliable no matter how you look at it, unless your criteria are very narrowly defined. However, the more narrow the definition, the fewer applications the data has.
The only way to measure that would be to interview my customers and their bosses. We'd have to pry for an hour into their effectiveness to find out if I properly completed a job that took me five minutes.
It's not really as hard as that. There is an interim marker you can use that is nearly as good as anything you'll get from an interview. All you really need to know is if the customers are happy with your service. If your service eats up a lot of their time, i.e. doesn't keep them working as long as possible, they won't be happy.
There are still limits to that - it doesn't work if your IT department is servicing 3,000 users. However, if it's 300 users with a single point of contact, you'll know pretty quickly how well you are performing with just a vague "good or bad" rating. I'm in the latter situation, others in my group are in the former. They are all extremely jealous because I don't need a ticketing system to track my performance, which makes my job more enjoyable and increases my productivity, while they need a raw number which can be easily compared to the performance contract and the performance of the rest of the company.
Cancer can last years, you can easily destroy your liver before then if you spend all your time drinking.
Poisoning requires a very large amount of alcohol in your blood at one time, well above the level that liver damage starts. If you maintain a constant blood-alcohol level above what your liver can handle you will be actively destroying your liver.
It's certainly possible for a depressed non-drinker to turn to drinking as a form of self-medication and destroy their liver before the cancer does. Poison levels are not required.
The stock market has no basis in reality. They like to pretend it does, but it doesn't. There are all sorts of excuses and 'reasons' why it does, but it has no more basis in reality than paper currency.
Spread over weeks, months, and especially years, the stock market has a very solid basis in reality. You can usually get a good idea of how successful a company was the previous year just by comparing stock prices at the start and finish of the year. If it was lower than it started, they probably weren't doing so hot. If higher, they probably did great.
Take the housing crash - it took about a year for most companies stocks to come back to their pre-crash levels, and the strongest companies either didn't fall at all or actually gained. This very much reflected how well their company was doing in the overall market.
What is only tenuously based in reality are the day to day and intra-day market prices. If you are buying and selling stocks over the course of days, hours, minutes, seconds, or milliseconds, you are speculating - not investing.
Investing is sound, speculation is gambling. That's the way it works.
It's great, if you ignore the terrible social consequences of all that fun.
Except there was a net positive - a railroad system that fostered trade and travel, which benefits everyone.
It's funny, I often read about the crazy social experiments done by Stalin and Mao that resulted in terrible catastrophes, but when it's the "market" doing it, it's OK.
Because when the market does it, it means people choose their path, sometimes fail and sometimes win. It's usually a net gain for the average citizen. With Stalin and Mao, it's net loss for the people, in a big way.
You took away the long lesson from history, my friend.
Long term the market is very rational. Short term it's anywhere from somewhat rational to completely rational.
The golden rule of the stock market is to never watch the live stock ticker unless you are day trading. Investors (as opposed to speculators) who handled things properly would not have noticed a thing. Brokerage firms who day-trade with their investor's money instead of actually investing need to be fired (as in, the investors need to take their money elsewhere).
However, they tell you when you sign up for a stock market mutual fund that it is high-risk and volatile. It's very predictable over long periods of time, but it is very unpredictable in the short term. Expecting it to be otherwise is foolish.
That's all, no regulation required.
This is the antithesis of these millisecond traders, and keeps the market safe for the everyman.
Actually it makes it far more likely that regular investors are going to jump on the latest bandwagon, and end up losing everything. The market came back almost the entire 1000 points within 30 seconds. The only people who lost any money were speculators. This was an extremely sharp but also extremely short blip in the market caused by a sort of "perfect storm" of conditions.
Investors investing properly didn't lose anything at all. Investors who act more like speculators may have lost an assload of money, while some speculators lost a ton of money and others made a ton of money.
Imagine if investors had 10 minutes to notice the 1000 point drop, instead of 30 seconds? Hundreds of thousands of people would have lost everything, because they think "Oh my god I need to dump this NOW!" when in reality they were at no real risk of losing anything.
All a delay is going to do is build up the changes, making the market more sudden, more volatile, and more dangerous to investors (though it would be an absolute dream for speculators). For example, if investment firms (not speculators) were basing their investments on a rolling 1 minute average instead of millisecond changes they would not even have known there was a huge market spike. They would have missed it completely.
It's a problem with investment strategy, not a problem with the markets. The market corrected itself just fine, and far faster than a market watchdog would.
But this rule does nothing to address the wild swings, it just stops trading *after* they happen.
Which prevents the rebound that occurred 30 seconds later.
Speculators either gained or lost massive amounts of money, as they should have, investors lost nothing.
There is nothing wrong with the way it works now, it just looks scary when rare events like this occur.
Has anybody bothered to look into why the derivatives market grew into such a huge market in only 15 years or so?
It was because regulation had forced lenders, especially large banks, to take on bad debt in the form of low-income mortgages. Community groups like Acorn were given the ability to coerce lenders into giving loans that ordinarily nobody in their right mind would give. They had to unload the risk somehow, and derivatives were essentially insurance against the bad debt.
Unfortunately, derivatives can't handle a major housing market crash, so both the buyers and the sellers went tango-uniform in the deal. Since derivatives spread the risk but didn't effectively mitigate it in the case of foreclosures, many more people were affected by the crash, though fewer banks went under than otherwise would have. The poster child for low-income loans - CountryWide, was the least stable and the first to fall. The market followed soon after.
Good regulation can stimulate the economy and make everybody's life better, but we have to be sure it's good regulation, not just any old regulation will do.
Bad regulation is worse than no regulation. It either chokes the economy or sets it up for massive failure.
And look how well that worked out!
Are you talking about the market that dropped 1000 points and corrected itself 30 seconds later?
Or the housing crash caused by regulators forcing bad debt on banks and mortgage companies (in the name of helping the poor), which forced them to unload that debt by buying questionable derivatives as a hedge against forclosures?
Because frankly, the former worked just fine - if a little scary, and the "experts" were absolutely against the latter but Congress went ahead with it anyway. Fifteen years later and BOOM, the bottom dropped out.
There is a real problem with the market right now with a high risk.
Where is the problem? The DOW bounced back almost completely in 30 seconds. A very small number of extremely lucky day-traders could have made millions, a few extremely unlucky day-traders lost millions to the lucky traders, but almost everyone else stayed exactly where they were.
This affected speculators only, it did not affect investors (unless you happened to be lucky enough to invest in a particular stock at precisely the right moment).
In other words, the market worked just fine, it's just a little scary. No doubt those who lost their shirt will be adjusting their strategies to prevent such a mistake again, if they don't they'll go broke. If they were playing with more money than they could afford to lose, they are fools. That's the way the world works. It's foolish to try to short circuit that.
The Prisoner's Dilemma in practice never plays out the way Game Theory suggests it will. In fact, Game Theory rarely describes reality in any meaningful way. It falls far short of something that can be reliably applied to real-life scenarios.
When you're talking a one time transaction, PD's best solution is defection, or screw the other guy before he can screw you. Iterated PD, however, optimizes with tit for tat in a general sense. However, investors following a form of Pavlov's strategy, or "win-stay, lose-switch" could create a form of legal collusion which would give them massive advantages in the market.
The stock market operates closer to nature than game theory, with many people investing in a stock (cooperation) before people decide it's too risky and sell off (defection). This happens even in millisecond trades. Overall, a sound company continually rises in the stock market. This is not how game theory predicts the transactions should flow (which is exactly what you are suggesting will happen).
The giant drop was nothing more than a hiccup in the system - a problem with the algorithms investors use.
You're an idiot if you believe the people who lost their shirt are just going to sit there and do nothing instead of adjusting their algorithms to prevent such an occasion in the future. It's bullshit to call in the SEC on this, it's completely unnecessary. Any investor willing to throw away his money deserves to lose it.
Fix the problem, don't break the rules - adding a 1 second delay is almost invariably cause investment-loading and some pretty obscene second-by-second swings.
At least until someone ponies up and buys one that is lower than yours.
Which just proves that it is an investment like any other. If I can buy 10 apartments in prime real estate and paint them to gain an advantage over my competitor such that I can charge higher rent for the same size/area, in what way is that wrong? Would it then be wrong of my competitor to furnish all his apartments so he can charge an even higher rate than I can?
The stock market has always been a form of gambling that just happens to provide a net benefit to the economy. Which new player has the best scheme to give themselves an edge does not matter in the slightest. A lot of schemes provide no benefit at all. Some provide marginal benefits at great cost (your 500nsec vs 600nsec router).
I'm no Electronics Engineer, but a previous poster, Mangu, is, and he gave the solution quite nicely:
I have a degree in Electronics Engineering and had to go through three courses on feedback systems and servomechanisms. What you are proposing may seem sensible, but that's not how nature works.
Feedback control systems can become unstable, but inserting delays into the feedback loop is about the *worst* thing you can do to destabilize them. If you want to stabilize a feedback system you should insert a "low pass" filter in the loop, not a delay.
A delay means that a lot of change will accumulate and suddenly be released. Putting a one day delay would mean that all the buy or sell orders would be stored hidden somewhere and then, all of a sudden, the market would become aware of that trend.
A low pass filter is, more or less, like a moving average. With a low pass filter, the market would get information on the average of the last X hours or days of transactions. That way everybody would be allowed to update instantly, to a microsecond precision if they wanted to, their estimates of the market trends, but those would not be instantaneous trends, they would be longer range.
Instead of limiting how fast market transactions can be done, it would be much better to limit the speed of the information on the system. Do not divulge *every* price for every transaction, but only the average of some period. This average can be updated every nanosecond if people want so, it will make no difference.
As is typical in Washington, this is something that seems to make sense, but in reality is almost certainly just going to fuck things up far worse than it already is.
A corporation also can't be considered dead, which is the prime requirement of the D&R contract. You must have been alive to be considered dead. There is even a clause for "dead but interactive", specifically covering ghosts and angels, but would probably also extend to zombies and corporations as well (assuming a corp could pass the dead test).
Even if they got around that part though, this part would screw them out the yin-yang:
After your following the terms of this license, the author has vowed to repudiate
your claim, meaning that the validity of this contract will no longer be recognized.
This license will be unexpectedly revoked (at a time which is designated to be
most inconvenient) and involved heirs will be punished to the fullest extent
of the law.
I'm not sure how that works if the license specifically removes the license at a date of the licensor's choosing. May or may not be enforceable, though it's very clear and agreed to by the other party, so I don't know.
Windows for Battleships is specifically certified for such applications.
It's just like the operating systems that run the equipment on fighter jets - they are very thoroughly tested and cleared by the military first.
Unlike some oil companies I know, which buy the most expensive product then trust the vendor to tell them how awesome it is even though all their employees are screaming about how it runs slower and with fewer features than the 30 year old tech they were using before. *twitch*
Not if you don't have death.
To be fair, that list lists Canada three times: Canada, New Brunswick, and Quebec are all member states. That lists governments that are French speaking, not just countries. There are 50 major governments in the US, for example, and thousands of minor governments.
I'm far too lazy to look at anything else in the list, but I'm sure there are more "governments within governments" that are recognized separately.