Wow, a new report from Grant Thornton sounds like the most insane argument yet against high-frequency trading.
Paul Kedrosky: There is a new Grant Thornton report out arguing that the U.S. is suffering from an IPO drought caused by high-frequency trading and broken market microstructure (but not SarbOx). The alleged consequences? 22-million fewer jobs in the U.S. than would otherwise be the case.
Whoa, it’s a provocative claim. Does it hold up?
It would indeed be good see more IPOs, so I’m with the authors on that, but after that they mostly lose me. I have multiple objections, including that the authors refuse to recognise that the venture industry has grown too large; that the technology industry is maturing; and that financial markets have changed & are no longer engineered for brokers & bankers to make money via flipping over-valued startups to retail investors via institutional cronies.
Instead of recognising this, the authors want to blame high-frequency trading. You know, computers. And hedge funds. Baddies in black hats, in other words. Read the whole thing >