Explain to me why trading stocks is a good thing
January 25, 2014 10:26 AM Subscribe
After reading stories like this
, I've been wondering about the financial industry's larger role in the world. Other than the people that run the system, who benefits from the financial industry and how?
posted by lalunamel to Work & Money (13 answers total) 10 users marked this as a favorite
It's obvious to see that the people running the system come away with tons of money (as in the above editorial). My question then is, who benefits from the toils of the lowly hedge fund manager, other than the manager themselves?
To put this in more concrete terms, think about high frequency trading. Programmers make minor modifications to algorithms in order to eek out tiny speed boosts for the automated trading systems.
Is there any benefit, other than increased profit, that follows from this endeavor? Do home prices stay more consistent? Do products become cheaper for consumers? Does anyone's life get better?
In fewer words: Is the financial system just a whole bunch of people making money to make money?
*I realize financial system is an overly broad term, but I am not conversant enough in finance to understand it's categories and subcategories.