Stock market manipulation

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    When I watch the markets and see the volatility and hyper-reaction to outside events (news events like civil unrest, natural disasters, etc.) I wonder how much of the reactivity of the market is due to large market-makers shorting or otherwise deliberately perturbing markets to gain advantage. I also would like to see a discussion of the automatic trading algorithms and their effect on markets (cf. the “flash crash”). It is beginning to seem as though the markets are rigged in favor of the guys with the pico-second advantages in arbitrage due to close connections via wire. I myself would favor a micro-tax on trades (example: one-tenth of a cent per transaction) to both raise tax income and level the playing field between the small investor and the flash-trading computer whizzes. Decades ago, the average length a share of stock was held was measured in years, now I suspect it is in days. I do not think this is in the interest of the companies being traded, or the interest of the individual investor. Discussion?

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