I don't know where to start. I'm not saying you're wrong, just, I don't know where to start responding. And please feel free to mentally append "as I understand it" to each of these.
1. Funds of actively traded securities are nibbling away at you with or without HFTs. Actively traded funds are evil.
2. HFT market makers aren't nibbling at actively-traded funds. They're nibbling at other market makers. Like I said previously: an HFT market maker is bidding the price of liquidity down, not up.
3. Your 401k is almost certainly not invested in a fund whose strategy is passive trading and selling liquidity. Your funds have positions in the market. Passive traders do not take positions. Your 401k benefits (very marginally) from the tightened spreads created by HFTs. The people who don't benefit are day traders.
4. I have no idea what "strip clubs" and "blackjack" have to do with any of this.
Actively traded funds are not "evil." Actively traded funds are the only reason you can buy an index fund and actually expect a decent return. Without active traders, the market would be inefficient, i.e. things would not be fairly priced.
1. Funds of actively traded securities are nibbling away at you with or without HFTs. Actively traded funds are evil.
2. HFT market makers aren't nibbling at actively-traded funds. They're nibbling at other market makers. Like I said previously: an HFT market maker is bidding the price of liquidity down, not up.
3. Your 401k is almost certainly not invested in a fund whose strategy is passive trading and selling liquidity. Your funds have positions in the market. Passive traders do not take positions. Your 401k benefits (very marginally) from the tightened spreads created by HFTs. The people who don't benefit are day traders.
4. I have no idea what "strip clubs" and "blackjack" have to do with any of this.