Trade-Through Elimination

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The SEC’s trade rule, in effect for a bit over 20 years, requires trading platforms operating in the US to execute investors’ trades at the best price available across the market, even if that means one platform must go to another platform to execute the trade. The SEC wants to rescind that rule as no longer necessary. The SEC says,

Currently, the US equity markets are highly automated and interconnected and the Commission’s concerns expressed at the time of [the rule’s] adoption in 2005 regarding the lack of mechanisms to connect markets is no longer an issue[.]

The SEC now argues that (as paraphrased by The Wall Street Journal)

stockbrokers already have a strict legal duty to execute trades with the most favorable terms for their clients, making the trade-through rule superfluous.

The exchanges’ “legal duty” is all well and good, but then there are the enforcement costs for violations of that rule. These costs are incurred by the government (i.e., us taxpayers) from enforcing compliance with a case’s outcome, incurred by individual (and institutional) investors from raising a ruckus in the first place, and incurred as opportunity costs during the time between detection of a violation and final adjudication.

Then there’s the difficulty of detecting a violation in the first place, especially for retail investors.

The SEC also argues that rule rescission would save the platforms the cost of buy[ing] expensive market data feeds linked to a bevy of exchanges.

Yet, in order to satisfy that legal duty, the platforms still would need access to some version of those data feeds, or at least to the data in them, in order, in real time (which is microseconds in today’s interconnectivity), to identify that best price available.

This is a rule that should remain in effect. The cost to the platforms is trivial: $54.2 million to $77 million annually, compared with nearly $30 billion in aggregated US platform income. Violations of the trade-through rule, importantly, are far more easily detected, including by retail investors.

“Dude-Bro”

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We’ve got some dude-bro politicians on the hustings, that being the new In Thing for politicians and politician wannabes. Most of them have no particular substance, though, trading on their dude-i-ness for the most part. The news writer defined dude-bro as this (though I question the first criterion as truly bro-ish or dude-ish, let alone in combination):

  • accusation of sexual misconduct or marital infidelity
  • voluntary or involuntary association with any of the following:
    • Tucker Carlson, Hasan Piker, or Joe Rogan
    • use of a racial slur in a public appearance or online post
    • publicly brawling or picking a fight

Here some of those dude-bro politicians, though they’re mostly just wannabes:

  • Graham Platner, of PTSD-sourced (he claims) misogyny, abuse, and bigotry infamy
  • Spencer Pratt, a Palisades Fire phoenix who burned down anew in his class war and Never Bass campaign
  • Brandon Herrera, who makes his own guns and refers to a particular German gun as “the original ghetto blaster”

Their platforms? Read the above again. Those are their platforms. They have nothing (had nothing in Pratts case, he’s already lost his election) substantial, only those sort-of tough guy images.

Here’s another dude-bro; he has substance, though, if highly dangerous. He even satisfies the Tucker Carlson criterion, and he’s put into action his bigotry regarding all things Ukrainian. And his fight-picking….

At least he’s wearing pants instead of a towel.

The Death of the Alarm Clock

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Maybe a loss as a minor cultural item, but the loss of the alarm clock has no practical consequence, even though one of the editors of The Wall Street Journal thinks so. The opinion writer opened her piece with this:

A friend who recently joined the Medicare rolls encountered a new test at his last physical. To confirm he still has his marbles, he was asked to draw a clock face displaying the time 10 minutes after 11. He passed, but would a fourth-grader? Not necessarily, I suspect, due to the near-extinction of the alarm clock.

I suspect otherwise.

————-
| 11:10 |
————-

Easy enough for the 4th grader to do, even with AACII art. Maybe, with ASCII art, especially so for him.

The Problem with Platner

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Graham Platner has won the Progressive-Democratic Party’s Maine primary election and has become Party’s nominee to be one of Maine’s Senators in the fall general election. That’s bad enough, but that’s not all.

Party senior leadership and middle tier politicians are enthusiastically endorsing this…person.

  • California Congressmen Adam Schiff and Ro Khanna
  • Connecticut Senator Richard Blumenthal
  • New York Senator and Minority Leader Chuck Schumer
  • New York Senator Kirsten Gillibrand
  • Hawaii Senator Brian Schatz
  • Minnesota Senator Tina Smith
  • Massachusetts Senator Elizabeth Warren
  • Vermont Senator Bernie Sanders (socialist and Independent, but he caucuses with Party)
  • Arizona Senator Ruben Gallego

All of these support Platner and are touting him to be the next Senator from Maine, replacing the Republican incumbent, Susan Collins.

This is Graham Platner:

Platner has a Nazi symbol for a tattoo on his chest that he has only lately tried to cover over with another tattoo—a move he made only when the public began objecting to his tattoo, not because it took him nearly 20 years to figure out that it was a Nazi symbol.

Platner has a long history of abusing women, including physically, and he has been caught sexting women in the last couple of years—after he was married.

Platner holds women at least partially responsible for their own rapes.

Platner openly disparages American voters, here, Maine voters, saying in plain words that rural Mainers are racist and stupid.

Platner disdains our police, saying that all of them are bastards.

Platner, himself a military veteran, has only contempt for our military men and women. He demonstrates this with his slur of a wounded, and Purple Heart recipient, soldier, insisting that the man was dumb for having gotten shot and deserved to die.

The problem for our nation isn’t a single Senator with such obnoxious and anti-American (not just unamerican) positions.

The problem is bigger than that: those positions of Platner’s–bigotry, misogyny, hatred of police and our military personnel–are, by Party endorsement, Party’s ideology and election platform.

I Wonder

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The ECB raised its baseline interest rate earlier this week, doing so, it said, in response to the jump in energy prices, which has driven inflation above 3% in the eurozone. Inflation in the rest of the economy—and it’s the same in the US and in the rest of the OECD-esque economies—remains largely muted and under control except to the extent energy costs percolate through them, impacting personal and commercial transportation and shipping, food production, manufacturing, and so on. It’s energy inflation that’s at the core of inflation in today’s overall economy, not a broad excess demand or supply deficiency.

So, I wonder.

When a central bank raises its baseline interest rate, it’s using, if not a cudgel, at least a two-handed sword to address a problem. That’s appropriate, when the problem is broad. But if the problem is narrow, a dagger would seem more appropriate (to continue the metaphor, or perhaps a scalpel, to soften the imagery a little).

Today’s inflationary problem seems narrow, for all its broad effect. It’s energy that’s causing the overall inflation. If raising interest rates is the way to combat inflation, what if a central bank were to raise interest rates only on basic energy production—oil, natural gas, and coal at their input stage, and solar and wind facilities at their component manufacture stage—while leaving its otherwise baseline interest rate unchanged for the rest of the economy?

Clearly that would take some restructuring of its baseline interest control, separating out energy from the rest of an economy. That might demand legislative support. But there’s no reason a farmer should have to pay a higher interest to borrow to get his seed for next year, when it’s core energy that is impacting the cost of his money and not a shortage of seed or a flood of farmers into the market for that seed. It’s the same for folks borrowing to buy a house or car and for those building houses and factories. It’s underlying energy, not a shortage of labor or a spike in buyers, that’s inflating the cost of their money.

On the other hand, raising interest rates on basic energy production would reduce the amount of energy produced. That would lead to reductions in the supply of all the things to which energy is central in their production. The demand for energy is pretty inelastic in a modern economy—it’s going to be produced, within broad limits, regardless of price, and that price increase still is going to percolate through an economy.

So I wonder (still I wonder). It seems to me that targeting the inputs to energy production—crude oil, natural gas coming out of the well, coal leaving the mine, metals arriving at the solar panel or windmill factory while leaving rates on the rest of an economy alone would reduce inflation growth in the rest of the economy while limiting supply deficiencies more than does raising interest rates all across an economy.