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Billionaire financier Ken Langone, the former director of the NYSE and financial backer of the Home Depot, co-hosted CNBC’s “Closing Bell” with Maria Bartiromo yesterday. During the hour-long guest appearance, Langone went head to head with Seth Merrin, the founder of trading network Liquidnet, over the issue of high frequency trading.
Merrin argued that high frequency trading benefits only a few at the expense of many.
“You have a very few number of constituents, and this is very much of zero sum game, and they make their money at the expense of all of those folks who are investors who invest in the mutual funds and the pension funds, and the most important thing that we need to reinstill in this country is investor confidence,” Merrin said.
Langone weighed in and said said it’s nothing but “a lot of noise.”
Here’s Langone’s take:
“Look it means nothing to investors. To investors. The traders, it’s a big difference. If you’re talking about our capital markets to accommodate people to invest money over the long-term, I don’t think it matters. Why? Because it gets down to earnings and sales and management and growth prospects. I mean, this is a lot of noise. I know one thing, this was certainly brought forth a lot sooner because when they did away — When they went down to pennies, guess what? Game changed. But a nickel, and Dick Grasso said that. Dick argued I thought very effectively when he was head of the exchange don’t go below a nickel. Yeah. But all I’m saying is this is just noise. If you own a company and you watch it and you look at what it’s doing and what its management decisions are. Right.”