Hooo boy, we wish we could. Sales, much to my own inner-hacker's chagrin, is something done best by building relationships in person. You can put some of it off to a nice self-serve web experience a la Adsense, but if you ever want to make the big bucks (enterprise fuck-you bucks) you have to have sales people talking to real people who can write big checks and aren't Googling for self-serve solutions to their equally big problems.
It surprises me that there's a unique 12 digit answer to this. If you bet proportion f of your income every round, then if you win n coin flips, shouldn't you have (1+2f)^n (1-f)^(1000-n) £? For a given f, it takes a certain number of heads for this value to exceed 1B£, but I'd expect a range of f values that all require the same minimal number of heads results to break 1B£. Unless there's a value of f that produces exactly 1B£ for the minimal needed number of heads (or the set of such f differ only after 12 digits). That seems unlikely...
EDIT: Just realized that the problem asks for the odds of being a billionaire, not f. So there are probably a good number of f that work, but they all produce the same odds.
Responding to your edit: I don't think his point was that 20,000 was too big to fail. The point is that 20,000 is too big, period.
Any company over a certain size (certainly way less than 20,000) institutes internal procedures for smaller groups within the company to coordinate. How would we not all be better off if those smaller groups were independent competing actors?
There is an obvious problem with HFT: it gives an advantage to lower latency analysis and communication, leading to huge amounts of wasted effort getting faster pipes and software, co-locating automated trading, etc. None of this is delivering real value to the economy, as far as I can see. If you have an argument for why trades that happen at millisecond time scales help liquidity and price discovery over what you'd get with a system that handled trades on the scale of minutes, I'd like to hear it. I have a hard time imagining that the benefits (to society at large) could outweigh the costs of the waste when I see what's being done.
That said, I agree that the high frequency of trades themselves are probably not the problem. The problem is rewarding a latency/processing advantage.
If a HFT firm makes a profit then they are, by definition, adding value to the economy.
All that technology investment is not a waste; it allows firms to condense money out of information asymmetries with ever greater efficiency.
Edit to add: if you prefer industries that build "real things" then look at the revenue that HFT delivers to companies who make high-speed networking and computer equipment.
My post was comparing the current system that allows millisecond scale trading with a hypothetical one that slows trades down to something on the order of minutes. Your observation that people are willing to pay to exploit information asymmetries in the current framework doesn't address the question of how my proposed change would affect net economic value.
The metric of measurement is wealth, which profits create.
Your proposed change would reduce the benefit because it would eliminate the profit (wealth) that HFT firms create.
Your proposed system is not hypothetical; it is how all trades used to happen. HFT did not arise from nothing. People developed it because it created new profit in addition to that generated by slower trading.
Suppose I'm a speculator willing to pay $0.03/share for liquidity. It's valuable for someone (I don't care who) to provide that liquidity.
If HFTs were all 100ms slower, I wouldn't care. But if HFT 1 is 100ms slower than HFT 2, then HFT2 will capture $0.03/share and HFT 1 captures nothing. It's a wasteful arms race. It's also fixable simply by eliminating the subpenny rule.
It's not that it would eliminate it, but it would make the margins to due pure latency arbitrage so small as to make it not worthwhile (in theory anyway).
That said, there is and always will be an advantage to players that can respond more nimbly to changing market conditions (news being one input to this) and there is no inherent problem with that (and there may be lots of positives to the market as a whole).
Have you considered this post in light of the inverted exchanges BYX, EDGA, and BX? You can effectively make your liquidity cheaper by posting to an exchange with an inverted fee schedule (pay to add, rebate when you take), but we still see the "latency arms race" at the traditional exchanges.
Moving the decimal point to the right just increases by 10x the volume necessary to create the same profit. I think a likely result would be massive consolidation to a couple big companies, who would then compete once again on latency but at much higher volumes.
The proxy angle is interesting, but I don't think that's main factor here. What's walking through someone's lawn a proxy for? The cops see a kid who looks like trouble and who's technically breaking the law and they arrest him, whether the specific crime is a proxy for anything or not.
And then there's the question of what "the spirit of the law" means. The courts wouldn't allow a blanket prohibition on "gang activity," even if that may be what legislature had in mind.
