Your humble correspondent has made use of such comment section periodically over the past year, but did not have the blog running until today's note.
Mr. President -You are about to be made a fool of in the economy once more by permitting the obvious ruse of "flash trading" to distract from the real issue, margin and leverage.Liquidity doesn't matter for long term investors, just as price action doesn't matter except to provide opportunity to buy at deep discounts.However, if price action gets to certain extreme levels margins are called and the resulting procyclical demolition of wealth ensues. By agreeing to impose curbs, in lieu of limiting leverage you are in fact abetting large entities in their cornering of the markets vis a vis minimizing their risk of being margined out.Flash trading may have been the engine for the collapse, but leverage was the underlying cause.Your economic and market policy advisors are so reinforced in old world thinking that they can't see that the sky is blue. Think out side of the box, sir. You campaigned on Change. Putting training wheels on a big boy stock exchange isn't the answer.
