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Author Topic: Distribution of Wealth  (Read 12083 times)
caveden
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February 23, 2011, 09:22:39 PM
 #21

Your house is a private residence; MtGox is a public market.

MtGox is no "public" anything. It's private property, and if its owner wants to allow people to trade in secret there, nobody else has anything to do with it.

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February 23, 2011, 09:54:13 PM
 #22

Your house is a private residence; MtGox is a public market.

MtGox is no "public" anything. It's private property, and if its owner wants to allow people to trade in secret there, nobody else has anything to do with it.
Reminds me of arguments I've heard for the stance that business owners should not have a right to refuse service to anyone for any reason. "Once they open their doors to the public, they have an obligation to do business with anyone."

Some BS right there.
imanikin
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February 23, 2011, 09:56:42 PM
 #23

There's nothing wrong with dark pools. The way a free market works is that you decide what it's worth to you to buy or sell, and if the market can match you up with someone else then you both transact to mutual advantage.


Agreed. That's the way it works in a dark alley also.  Cheesy In a genuinely free market, imho, the open exchange of any commodity is a place where all the participants have equal information about the balance of market forces, for the purpose of fair price discovery – not just transact to mutual advantage in privacy.

Dark pools hinder and distort the results of that discovery...

Quote
Why should people be forced to advertise their intentions in one specific way? That wouldn't be very free.


Why should a con artist be prevented from doing his thing by exposing his intentions?  After all, that would interfere with his freedom to con people...
I think you are confusing freedom with ability to harm others through your actions, if you feel like it would benefit you.  Cheesy

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Even if MtGox didn't support dark pools, there will always be people dealing outside of MtGox (e.g. #bitcoin-otc, or private trades) so you can't have perfect knowledge of other people's intentions anyway. There are always parts of any market that are unavoidably dark.


Just because there are dark alleys in which all kinds of shady private trades are happening, doesn't mean that the main price discovery marketplace for any commodity should include dark alleys. That is, of course, if you want that main exchange to determine that price accurately...  Smiley




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February 23, 2011, 09:59:18 PM
 #24

n a genuinely free market, imho, the open exchange of any commodity is a place where all the participants have equal information about the balance of market forces, for the purpose of fair price discovery – not just transact to mutual advantage in privacy.


So, in order to be free, a market must be regulated?

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February 23, 2011, 10:01:28 PM
 #25

Why should a con artist be prevented from doing his thing by exposing his intentions?  After all, that would interfere with his freedom to con people...

No. A con is a form of fraud. Offering currency for trade without announcing it to the world is not fraud. No number of emoticons can change this fact.
imanikin
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February 23, 2011, 10:34:00 PM
 #26


That's udder nonsense.  Transparency is not equatable to freedom, in fact, privacy in private exchanges is the definition of freedom.  Dark pools are just a formal manner of private trading,


What i think best reveals that dark pools are free-market forces avoidance and market manipulation tools for hypocritical free-marketeers is that there is an arbitrary lower limit set on participation in them.

If they were really for the purposes of trading privacy, that limit wouldn't exist. Let's all trade privately then, rather than just those above a certain arbitrary level of means. That would be great!  Cheesy

The fact that dark pools are only available to large traders, really shows the privacy argument to be the red herring that it is...  Wink


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February 23, 2011, 10:36:47 PM
 #27

What i think best reveals that dark pools are free-market forces avoidance and market manipulation tools for hypocritical free-marketeers is that there is an arbitrary lower limit set on participation in them.

If they were really for the purposes of trading privacy, that limit wouldn't exist. Let's all trade privately then, rather than just those above a certain arbitrary level of means. That would be great!  Cheesy

The fact that dark pools are only available to large traders, really shows the privacy argument to be the red herring that it is...  Wink

Do you even know how a dark pool works? Once a trade is made, dark pool or not, it shows up in the recent trades. What does it matter if the trade offer was public or not?
ribuck
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February 23, 2011, 10:38:42 PM
 #28

Quote from: ribuck
Why should people be forced to advertise their intentions in one specific way? That wouldn't be very free.

I think you are confusing freedom with ability to harm others through your actions

I don't accept that an offer to trade can harm others.
imanikin
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February 23, 2011, 10:50:24 PM
 #29


MtGox is no "public" anything. It's private property, and if its owner wants to allow people to trade in secret there, nobody else has anything to do with it.


Some BS right there.


Sorry i didn't make my  point clear enough here: it wasn't whether or not MtGox is a private or public place, or whether or not it has a right to run dark pools.

My point was simply that MtGox is the place of worldwide Bitcoin exchange rate discovery, and one's house isn't.

Imho, dark pools distort that exchange rate in a systemic way.


imanikin
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February 23, 2011, 10:57:11 PM
 #30

So, in order to be free, a market must be regulated?


With respect to this issue, to me, a free market is one in which the rules are the same for all traders, the level of "trading privacy" is the same, and the access to information is the same, regardless of the size of the trade.  Smiley


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February 23, 2011, 11:03:25 PM
 #31

imanikin’s right. This system (dark pools only allowed for huge trades) favors the big fishes at the cost of all others – ironically, this is not very much unlike the established we want to replace …
The "true" Bitcoin price is probably veiled this way due to misinformation, because we can’t see dark pool selling orders.

"Bitcoin had been transformed from an anarachistic challenge to the financial status quo, to the crypto spawn of Satan, fuelled by cut-throat greed and delusions of avarice." - MatTheCat
"these people don't seem to want to stop till Bitcoin is completely destroyed and left like an old cum rag in the corner of the room." - ShroomsKit
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February 23, 2011, 11:25:38 PM
 #32

imanikin’s right. This system (dark pools only allowed for huge trades) favors the big fishes at the cost of all others – ironically, this is not very much unlike the established we want to replace …
The "true" Bitcoin price is probably veiled this way due to misinformation, because we can’t see dark pool selling orders.

That's incorrect. You can't see dark pool offers, but successful trades are seen by all.
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February 23, 2011, 11:30:05 PM
 #33

So what? The current selling orders are highly relevant to the current price. To hide the biggest chunks of it, means to decieve normal users, as they will think Bitcoins are worth much more.

Also, Mt.Gox just happens to be the biggest exchange place for this. The others do not matter so much, at least until now.

"Bitcoin had been transformed from an anarachistic challenge to the financial status quo, to the crypto spawn of Satan, fuelled by cut-throat greed and delusions of avarice." - MatTheCat
"these people don't seem to want to stop till Bitcoin is completely destroyed and left like an old cum rag in the corner of the room." - ShroomsKit
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February 24, 2011, 04:33:31 AM
 #34


That's udder nonsense.  Transparency is not equatable to freedom, in fact, privacy in private exchanges is the definition of freedom.  Dark pools are just a formal manner of private trading,


What i think best reveals that dark pools are free-market forces avoidance and market manipulation tools for hypocritical free-marketeers is that there is an arbitrary lower limit set on participation in them.

If they were really for the purposes of trading privacy, that limit wouldn't exist. Let's all trade privately then, rather than just those above a certain arbitrary level of means. That would be great!  Cheesy

The fact that dark pools are only available to large traders, really shows the privacy argument to be the red herring that it is...  Wink

Why would that be?  The owner of Mt.Gox doesn't want to deal with the additional work for dark pools for small trades, that doesn't prevent anyone else from setting up dark pools without those conditions.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
MoonShadow
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February 24, 2011, 04:37:22 AM
 #35

imanikin’s right.

No he is not.  He has a right to his opinion, but that is all that it is.  Apparently both of you need some remedial economics education.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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February 24, 2011, 04:41:23 AM
 #36

So what? The current selling orders are highly relevant to the current price. To hide the biggest chunks of it, means to decieve normal users, as they will think Bitcoins are worth much more.

Also, Mt.Gox just happens to be the biggest exchange place for this. The others do not matter so much, at least until now.

As dark pools are currently done at MtGox, trade data is public after the trades occur, so the pricing metrics are not affected.  The fact that orders can exist without public knowledge is not any different than if those same orders had been placed just before completion.  A script could perform the same function, waiting until the right offers hit the open pool before issuing counter-orders automaticly.  There isn't really anything special about dark pools other than anyone can use them without needing a script to do it.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
ribuck
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February 24, 2011, 08:52:26 AM
 #37

The darkest pool of all is outside of MtGox. It is in people's minds. People have thoughts like "if the price rises another 10%, I might offload my bitcoins".

These thoughts will never be displayed at any marketplace, but they are part of the future price destiny.

There's no point worrying about MtGox dark pools when they make little or no difference compared to unvoiced thoughts and emotions.
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February 24, 2011, 11:40:06 AM
 #38


Why should people be forced to advertise their intentions in one specific way? That wouldn't be very free.


No. A con is a form of fraud. Offering currency for trade without announcing it to the world is not fraud. No number of emoticons can change this fact.


Didn't make myself clear again there. Sorry. I was responding to the point above, regarding whether or not one should be "forced to advertise their intentions."

I agree with ribuck that one should not be forced to advertise their trading intentions in a free market. Yet, the small investor IS forced to advertise his intentions, while the large one is allowed to hide them in the dark pools.

No amount of rationalization can change the fact that this is rigging the system to prrotect from the "free market forces" and favor the large trader. Grin


imanikin
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February 24, 2011, 12:00:57 PM
 #39


The fact that dark pools are only available to large traders, really shows the privacy argument to be the red herring that it is...  Wink

Do you even know how a dark pool works? Once a trade is made, dark pool or not, it shows up in the recent trades. What does it matter if the trade offer was public or not?

It's pretty clear how it works, and examples of such cheating rigs abound on Wall Street. I sense that those of you so staunchly defending hiding from the free-market forces while praising their virtues know how dark pools work from personal experience. Been a pretty lucrative way for you to game the system, has it? Smiley

That's fine; no law against free-market hypocrisy...

So, if you contend that it doesn't matter if the trade offer was public or not, just make it public. The truth is it does matter, because it allows you to avoid exposure to the dangers of the free market forces.

The dark pool trader gets to avoid that exposure, while its stench and effect shows up in the market as that recent trade is revealed after the fact, as you said.

It's like quietly farting in a crowded room and leaving, allowing everyone else to enjoy your intestinal aroma... Cheesy

ribuck
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February 24, 2011, 12:10:51 PM
 #40

I agree with ribuck that one should not be forced to advertise their trading intentions in a free market. Yet, the small investor IS forced to advertise his intentions

The small investor can watch the market, and isn't forced to advertise his intentions, When there is a suitable ask or bid on the market, the small investor joins the market and makes a trade.

A dark pool just automates this process for the big investor.

No amount of rationalization can change the fact that this is rigging the system to prrotect from the "free market forces" and favor the large trader. Grin

This is the core difference. You believe in the sanctity of "free market forces". I believe in the sanctity of the "free market" and I don't care about it's supposed "forces", because in a free market I'm not subject to any forces. If someone else wants to trade at a price that suits me, I trade.

I've never used a dark pool myself, because I consider it in my interests to openly advertise my intentions, to increase the likelihood of making a trade. But I'm perfectly happy for others to use dark pools if it suits their purposes.

Quote from: imanikin
The dark pool trader gets to avoid that exposure, while its stench and effect shows up in the market as that recent trade is revealed after the fact
There's no stench from a voluntary trade.
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