It is exactly what happened in France when they introduced a similar tax. All traders moved into CFD (contract for difference) instead of trading the underlying stock.
Those traders who didn't exit during the flash crash profited the most, what makes you think they will pull out the next time? On the flip side: those Market Makers that were forced to trade Facebook on the day of the IPO lost the most, when the system was totally broken, what makes you think they will handle the next problem better?
Anybody who's making a profit is almost by definition making the markets more efficient and less volatile. They buy when the price is low (pushing it up) and sell when it is high (pushing down).
For example traders in equities can participate in "on close" auctions if they prefer to do so. No millisecond guessing, no bid/ask at all, pure double side auction. Yet only ~10% of the volume goes there.
You can open up your own ECN and offer fixed auctions every minute if you think this will attract people who feel cheated by HFT.
HFT serves the same purpose that human Market Makers and Specialists do, only better. Kill it, and you will end up paying more.
Did you complain when human travel agents were replaced by expedia and like? Would you complain if car salesman as a profession is gone? Do you see your profit when amazon is competing with all brick and mortar shops? What makes HFT so special in that list?
So strange to see that sentiment from a science fiction author. Afraid to lose to reality evolving faster than you can imagine?
It wouldn't break current theory, it would just mean that photons travel slower than "speed of light" and have non-zero rest mass. Constant c in relativity instead of speed of photons would just mean fastest speed possible.
> invariably lead to a discussion of utility functions and slowly bore everyone
But that's the crux of the matter - both sides of the trade are getting some utility gain (otherwise the trade would not happen) and thus it is not a zero sum game.
It is still zero sum in short term dollars, which just obscures the subject for the people who equate utility with dollars.
Don't ask who is losing on the other side of your trades but think instead who is your customer. What is the service that you provide and how it helps them.
If you're making a profit it means you bought inventory when the price was below fair value (your customers didn't need it and wanted to sell as fast as possible) and you sold it when the price was above (your customers really needed the shares right now). The net benefit to everybody is that the volatility is lower, as you moved the price down when it was too high and moved it up when it was too low.
The market efficiency is higher too: a lot less capital is required to establish fair prices as market reacts immediately to any imbalance.
It also makes the spread lower and makes buying and selling stock cheaper for your customers. Only a few years ago market makers and specialists would chicken out at the first sign of trouble and would widen the spread between bid and ask prices. Crossing the spread is a huge part of your overall expense of trading. Unfortunately very few investors understand full impact of it on their returns and don't appreciate your contribution.
Execution time is better now. Even during flash crash it was possible to buy and sell with retail brokers, where's I still remember times in 2001 when retail broker market orders sometimes took minutes to fill.
When you turn the camera the perspective shifts, as if you're inside a cube with pictures on its walls. Is it that hard to fix to get more real feel like in a 3rd game?
Edit: default zoom is too wide-angle. Zoom in and everything is so much better.
"Most attempts to explain market failures seek to pinpoint triggering mechanisms that occur hours, days, or weeks before the collapse. Sornette proposes a radically different view: the underlying cause can be sought months and even years before the abrupt, catastrophic event in the build-up of cooperative speculation, into an accelerating rise of the market price, otherwise known as a "bubble." "
"It was not our purpose to examine, nor did we seek evidence on, the science produced by CRU. It will be for the Scientific Appraisal Panel to look in detail into all the evidence to determine whether or not the consensus view remains valid."
Just a warning to anybody using Linked-In or Facebook - journalists are already calling all the "friends" they can find online for details. FBI will be calling soon too. This information is just too easy to find for anybody who has time to type in the name into a search box.
What happened to it? Tracking it on linked in seems that it closed its doors in April 2001. Archive.org has web site still there in 2002.
"... What moves stocks ..." the average investor still wants to know. I've launched WhoMovedMyStock.com a year ago here on hacker news, seems to be very similar in concept.
Don't use a debugger - think when something doesn't work. The feedback you get by thinking about your own code teaches you much faster than anything you get with compile/run/debug cycle.