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In some sense the thesis of the article makes intuitive sense. How can the banking sector really have much of a margin since they are dealing with the ultimate commodity product, money!

Trading is a zero sum game, all the banks can't make a profit doing it.

Banks provide quasi governmental services to society, so one could make an argument that they should be subsided in some way, or that they have to be subsided! Their role in the economy is too fundamental to not have.

I've come across arguments that banks should just be turned in to utilities.

http://www.nakedcapitalism.com/2011/08/should-banks-be-publi...




Wait, what? Trading is not a zero sum game except for maybe options and futures contracts.


Well, buying and selling financial instruments with short holding times is a zero sum game. Any gain is created by another traders loss.


Yes, but banks more often hold large positions for long periods of time. While they do engage in HFT, it is hardly their only trading strategy.




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