Here are two simple changes that only the most self-interested, reckless players can lobby against. And they have. But sane minds must prevail:
1. Credit Default Swaps markets must be listed, regulated and open so that all sides can see what is where, and what risks are not covered.
2. High frequency trading must be greatly curtailed starting with lengthening the amount of time trades must remain open in order to be valid. Allowing trades to be posted and retracted 300 times faster than the eye can blink, is absolute lunacy. There is no good (other than bad faith profits gleaned by volume hungry exchanges) that can reasonably be argued in support of this reckless nonsense.
“CDS markets should be moved to an open regulated exchange. And while we are at it, high-frequency trading should be stemmed. This could be done easily by requiring all bids or offers to last for at least one second, instead of a few microseconds. You make the offer, you have to honor it for a whole second. What a concept. That would not hurt liquidity, but it would cut into the profits of the exchanges (especially the NYSE) – but I thought these were public markets and not the playground of the privileged few.
If it weren’t so cold here in New York, I might just wander down and join Occupy Wall Street and see if I could enlighten a few minds. If those kids only knew what they really should be protesting.”