An important, though under-reported, trend in finance: high frequency trading (HFT).

HFT is algorithmic trading (software algorithms decide when to buy and when to sell based on trends) taken to its logical extreme: trades that hold onto assets for mere seconds -- or less -- that are designed to manipulate, as opposed to simply profit from, the market. Here is an excellent CounterPunch article by Ellen Brown detailing how HFT is a form of insider trading. According to Brown, HFT accounts for 73% of all U.S. equity trades.

73% of all U.S. equity trades. You might want to take a moment to digest that. It took me a little while.

I am not going to spend too much time on the topic, as I am much more interested in how software is used to better the world, but I will make one point: even if you believe that the investment banks are needed to allocate capital, and I don't, that is not what is happening. Stocks are bought and sold based on slight changes triggered by large trades, not on the fundamentals of any company. And because the stocks are only held for seconds, or less, there is no capital invested in any company. HFT, at its essence, adds a cost to large investments by pension funds and other institutional investors (usually investing workers' savings). The extra cost goes directly into the HFT traders' pockets without adding anything of value.

Forbes just published an atrocious article, which led to me writing this post, about software developers who write the code for HFT and are now starting their own HFT trading companies. I suppose I like it that workers are figuring out a way to sieze the means of production and modes of distribution, such as they are, but these programmers are no better -- and arguably worse -- than the programmers who create viruses that take over personal computers and turn them into spam bots. I often wonder how programmers who write evil software sleep at night, but in this case I believe I know the answer: on high thread count silk sheets.

The only way to stop the growth of HFT, as I see it, is regulation, so now is a good time to remind everybody that both major political parties are wholly owned by the banks.