Goldman Sachs Managing Director Don Castration said at a hearing on curbing commodities speculation: "Swap dealers play an important role in providing liquidity, price discovery and customized risk management products to end-users on favorable credit terms..."
From today's NYT: The answers that come back from high-frequency trading proponents, also rather too quickly, are “No, we are adding liquidity to the market” or “It’s perfectly safe and it speeds up price discovery.” In other words, the traders say, the practice makes it easier for stocks to be bought and sold quickly across exchanges, and it more efficiently sets the value of shares.
Price discovery is actually a tried and true technique employed by the world's best T-raiders for hundreds if not thousands of years. Savy?
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