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	<title>Comments on: Markets are like highways</title>
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	<link>http://lebleu.org/blog/2010/12/27/markets-are-like-highways/</link>
	<description>Thoughts on the future of money</description>
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		<title>By: income tax calculator</title>
		<link>http://lebleu.org/blog/2010/12/27/markets-are-like-highways/comment-page-1/#comment-1182</link>
		<dc:creator><![CDATA[income tax calculator]]></dc:creator>
		<pubDate>Fri, 11 Mar 2011 03:04:55 +0000</pubDate>
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		<description><![CDATA[all very good points]]></description>
		<content:encoded><![CDATA[<p>all very good points</p>
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		<title>By: GregoryJRader</title>
		<link>http://lebleu.org/blog/2010/12/27/markets-are-like-highways/comment-page-1/#comment-1173</link>
		<dc:creator><![CDATA[GregoryJRader]]></dc:creator>
		<pubDate>Wed, 29 Dec 2010 03:04:04 +0000</pubDate>
		<guid isPermaLink="false">http://lebleu.org/blog/2010/12/27/markets-are-like-highways/#comment-1173</guid>
		<description><![CDATA[I have often thought that navigating traffic is very similar to trading financial markets.  In traffic you move quickly by jumping into the lane that is moving and then getting out just before that lane stops and the other lane starts moving.  Likewise, when trading financial instruments the goal is to accurately judge the momentum of a given security, ride that momentum for a period of time and then trade out before that security loses momentum.  &lt;br&gt;&lt;br&gt;One additional consideration is that both of these situations are zero sum games.  If I jump ahead of you in traffic then I am advancing by putting an additional obstacle in front of you.  Likewise, in financial markets I make money when the counterparties to my trades lose money.  So does zero sum games engender anonymity or does anonymity result in zero sum games (or are they unrelated)?&lt;br&gt;&lt;br&gt;In either case I fully agree that adding transparency is one of the best solutions.  One point of difficulty in the financial markets is the degree of aggregation.  So much trading is conducted by intermediaries that it is difficult to identify that &quot;prime mover&quot; behind any suspicious behavior.  Within any given organization the decision making dynamics may be so convoluted that it is nearly impossible to identify a given party as responsible for a given action.  Therefore the first step in transparency may be to enforce more granular accountability from the outside...enable the market to communicate to individual participants that &quot;I was just doing my job&quot; is not sufficient justification.]]></description>
		<content:encoded><![CDATA[<p>I have often thought that navigating traffic is very similar to trading financial markets.  In traffic you move quickly by jumping into the lane that is moving and then getting out just before that lane stops and the other lane starts moving.  Likewise, when trading financial instruments the goal is to accurately judge the momentum of a given security, ride that momentum for a period of time and then trade out before that security loses momentum.  </p>
<p>One additional consideration is that both of these situations are zero sum games.  If I jump ahead of you in traffic then I am advancing by putting an additional obstacle in front of you.  Likewise, in financial markets I make money when the counterparties to my trades lose money.  So does zero sum games engender anonymity or does anonymity result in zero sum games (or are they unrelated)?</p>
<p>In either case I fully agree that adding transparency is one of the best solutions.  One point of difficulty in the financial markets is the degree of aggregation.  So much trading is conducted by intermediaries that it is difficult to identify that &#8220;prime mover&#8221; behind any suspicious behavior.  Within any given organization the decision making dynamics may be so convoluted that it is nearly impossible to identify a given party as responsible for a given action.  Therefore the first step in transparency may be to enforce more granular accountability from the outside&#8230;enable the market to communicate to individual participants that &#8220;I was just doing my job&#8221; is not sufficient justification.</p>
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