Bill Gates supports the idea to raise funding to combat poverty, but it could also counter financial/commodity market abuses/excesses. Rapid frequency trading is one of the more pervasive strategies being employed by a few hedge funds. It is not even investing though. Rather it is a strategy/methodology that skims from true investors. More traditional/long standing investment managers despise HIGH FREQUENCY TRADING, (FTT), and perceive it as undermining the true capitalist nature of the financial markets as well being of questionable legal and ethical compliance. BILL GATES INITIATIVE: Bill Gates has endorsed a study that suggests almost $50 billion can be raised by a very small tax on equity and bond trades. Gates would like to see the additional funds directed toward poverty eradication. The US and UK are against the initiative. Germany and France have endorsed such an initiative along with many other states. Of course, the US and UK happen to be home to the largest/most frequent financial trading centers. The US and UK say that they do not oppose other countries from adopting such a tax, but that is a transparently insincere option. Any country that imposes a FTT unilaterally could experience an exodus of issuers, traders and exchanges from its jurisdiction in favor of those with no tax. Already being home to the largest financial/commodity market exchanges, the US and UK would suck up even more of the industry if smaller jurisdictions tried to impose an FTT unilaterally or even as a group without US and UK involvement. Such a tax would need to have broad application and across border standards adopted by the largest free market and democratic economies. US & UK OPPOSE – OTHERS FAVOR: Despite Bill Gates' lobbying, the G-20 failed to endorse such a FTT initiative or even really give it a fair hearing. "It is very plausible that certain kinds of FTTs could work. I am lending some credibility to that. This money could be well spent and make a difference. An FTT is more possible now than it was a year ago, but it won't be at rates that magically raise gigantic sums of money." Gates endorsement parallels growing support including in circles within the UK. According to the Guardian, "the archbishop of Canterbury, Rowan Williams, supported the idea earlier this week but David Cameron told MPs on Wednesday that Britain would only back an FTT if it was introduced globally." However, it is the current UK and US Administrations that are pushing hard to keep the FTT of the global agenda. "The City (UK financial industry) has been lobbying the (UK) government hard to resist an FTT, “ according to the Guardian. The same is true of exchanges and some financial firms and especially those who benefit from high frequency trading in the US. SAVING MARKETS from PREDATORY CAPITALISM: Bill Gates initiative appears to have failed for the moment. It is bad news for those programs and people who could have benefited from the FTT. However, it is also a lost opportunity to discourage abuses/excesses or practices that can undermine confidence in the already badly damaged image and integrity of the markets. The “flash crash” of May 2010, (where ordinary investors suffered unconscionable losses due to manipulation and/or exaggeration of swings in prices of equities in a matter of an hour), was either triggered or exacerbated by high frequency trading. Although not really quantifiable, the whole financial crisis was made considerably worse by such practices and especially the harm it inflicted upon the confidence and real value of retirement/savings accounts of ordinary investors – whether investing individually or through mutual fund methodologies. Again, it is impossible at least for now to fully measure, but high frequency trading has certainly exaggerated market dips as well as bubbles. Such wild swings do not reflect micro or macroeconomic fundamentals. They tend to accentuate predatory opportunities of very big market players at expense of more traditional investors, big but especially smaller whose limited balance sheet makes it most difficult to withstand such destructive trading storms.("Occupy Wall Street" has not fine tuned many of its objections to "corporate greed," but this would be on top of agenda - although some protesters are not so inclined to save capitalism from its own predatory excesses). CREATING a FALSE MARKET: High frequency trading may involve several “strategies;” at least some of which are highly questionable as to legality or ethics. Some may effectively “front run” more traditional trades extracting a slightly higher price for a purchase order or a lower one for a sell order placed just before them. (Front running is not legal by a fiduciary but it same strategy may be applied by a third party with a technologically fast enough eye to see and execute). High frequency trading though has become better known for multiple sell and buy orders being placed in combo that do and may be lodged with purpose of creating a false impression of what the real market for a financial/commodity instrument may be. It is a form of manipulation and actually undermines the theory and reality of a true market composed of real sellers and buyers. SPLIT SECONDs Create Opportunity for Small SKIMS, Repeated Over. High frequency traders generally house their technology/computers right next to those of the major exchanges. This gives them a split second advantage to execute their predatory strategies over those who are actually investing – for a day or years. Such more traditional investors may understand that they are being skimmed, and even though it may be a very small amount on each trade, it undoubtedly adds up and frankly irritates. The exchanges also know the game, but they not only facilitate by renting space to high frequency traders’ technology, systems but profit from the significantly greater activity in perceived trades – even if the seller and buyer are one and the same and undermining true market behavior. SAVING MARKETS & CAPITALISM from PREDATORY EXCESSES: Most Wall Street/financial firms are not about to endorse any tax upon their industry, especially a FTT – as it will affect all with a higher cost. However, an FTT would most adversely affect high frequency trading and potentially discourage it where it means the most – the profitability rationale which relies effectively on small skims applied over many and many trades orchestrated and real. Bill Gates has a good initiative. It is not though just about helping the more needy. It is also about helping restore the integrity of financial markets and perhaps also help save the true market/capitalist model. READ - “Financial Jungle – Can Anyone Leash the Predator?” diplomaticallyincorrect.org/films/blog_post/financial-jungle-can-anyone-leash-the-predator-by-ambassador-mo/27281 ) By Ambassador Muhamed Sacirbey














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 “International Financial Crisis Channel” - diplomaticallyincorrect.org/c/international-financial-crisis