Us vs Them part 2

I'm happy to see more people writing about the conflicting agendas of long-term capital investors and short-term speculators. This is a excerpt from an article by Dallas Mavericks owner Mark Cuban.

Regulators have got to start to recognize that traders are not investors and vice versa and treat them differently. Different regulations. Different tax structure. Different oversight. Individual investors and the funds that just invest in stocks and bonds are not going to crash the market. Big traders who are always leveraging up and maximizing the number of trades/hacks they make will always put the system at risk. We need to recognize that they do not serve much of a purpose other than to add substantial risk to the global economy. That their stated value add of liquidity does not compensate the US and World Economy nearly enough for the risk of collapse they introduce into the system.

Wall Street as a whole needs to be in the business of creating capital for companies and selling shares to investors who believe they are shareholders. The Government needs to create incentives for this business and extract compensation from the traders/hackers for the systemic failure level of risk they introduce.

This assessment is spot-on, except that I don't think the government can extract enough to compensate for the risk of disrupting the economy and all the lives and businesses in it. There are some things you can't write a check for, and years of people's lives is one of those things.

Better to limit destructive activity to non-critical levels. High frequency trading accounts for 73% of all equity trades, and it's already been rigged to get around the law. Do we really need this at all?