I just voted.

[Spartanmack]

There's a difference between THE minimum wage and relatively lower paying jobs. Here in CO, wages are suppressed because of the tremendous glut of available employees moving here. When I had my snowboard shops in Vail, we paid $12/hour + commission (very little). Some prospective employees tried to counter and ask for $14 or $15 but I simply said No. The reason being that I could have a dozen other candidates take the $12/hour wage.

Now the ski shops paid $14 or $15 because they were trying to get employees ...I had guys in the summer hit me up for jobs for that next season. Now clearly $12/hour was higher than THE minimum but we didn't have to pay anything higher to get plenty of demand.

Look at the oil companies in 2006-08 that we're hiring parolees right out of prison and putting them to work on oil platforms in the Gulf for $40/hour.

Deadly work but in demand.

Don't like working the fryer at McD's, try working the fracking fields in the Dakotas.

Pays better because ....it does.

Pretty much exactly my point. And I don't think I ever got paid minimum wage - even in restaurant jobs (counting tips) but I couldn't and wouldn't expect to be paid enough for tending bar or busing tables to raise a family on.

Just to clarify though, are you saying people took less money to work in a snowboard shop than a ski shop or are you saying changes in the labor supply year-to-year drove wages up or down?

 

[Spartanmack]

Back in the not too long ago, I saw/heard none other than Rick Santorum proudly claiming that he had actually voted in favor of the most recent federal minimum increase.

I'm pretty sure folks imposing minimum wage regulations on employers ain't goin' nowhere.

For what it's worth, employers have the same one vote on a ballot initiative or representatives to Congress and the state legislatures as everybody else has.

Except in Chicago.

But those employers tend to be takin' down a whole bunch of nanny state big government contracts, and it's kind of just the cost of doing business.

true but for every employer, there's how many employees? His/her vote is about as meaningful as vote for a Republican running against Pelosi or Boxer.

 

[Spartanmack]

Hey spartanmack, have you read Flash Boys by Lewis?

No but i attended separate broker dinners w/ the founder of IEX and CEO of NASDAQ shortly after it came out.

 

[Gulo Blue]

well, i'm not a quant - I work in what we call the fundamental discretionary equities business. I'll take a crack at the question but other than the first part of my answer, it will be an educated guess at best. First, none of our guys are momentum or high frequency traders, but guys that do that put a huge emphasis on speed to market. To achieve best times, they try to co-locate their servers at the exchanges and get deals w/ the exchanges that allow them to trade in fractions of a penny. Firms have even rented space next door to exchanges and dug trenches to lay new t-1 lines to be as close to exchange servers as possible. A new exchange IEX has opened in the last year to try to even the playing field - they literally have a spool of something like 15 miles of cable in their server farm to slow down high frequency guys and prevent them from front running order flow.

As for building a feedback mechanism, this is a bit of an educated guess - while I don't think it's feasible to identify/isolate what a single player is doing, they definitely use market data to see where things are going and get out in front of the flow. They literally flood the exchanges with thousands of "fake" orders every second and they're so fast they can actually pull their bids/offers before they get hit/taken. This gives them tremendously valuable information as once they know where the market is, they can front run these orders. This all happens in tiny fractions of a second - way faster than conventional traders can see. From my seat, i think i see it a lot when I'm trying to buy a stock using an algo, no news comes out, volume is not increasing but suddenly the offer starts creeping higher - often w/out a share trading. Can't say that's it for sure but our algo providers have shown us examples of stocks we've traded and they're constantly studying it and tweaking the anti-gaming features of their products. But again, I don't think they're targeting a specific player in the market or even the algo I'm using, or another player in the market - I think they're trying to get a sense of order flow in general and trying to get to the exchanges where the orders are going faster than other high frequency front runner sleaze balls.

Not sure if any of that answers your question - hope it's somewhat informational.

What I'm talking about is a high frequency idea. And it's wouldn't really be about targeting 1 specific opponent as an effort to characterize all of them. I wonder how many firms do this. There's only so much real estate around the exchanges. But if you can't figure out what's purchased by high frequency algorithms and what isn't, the idea doesn't stand much of a chance. Maybe that's a part of the anti-gaming strategy you mentioned.

 

[TheVictors]

Pretty much exactly my point. And I don't think I ever got paid minimum wage - even in restaurant jobs (counting tips) but I couldn't and wouldn't expect to be paid enough for tending bar or busing tables to raise a family on.

Just to clarify though, are you saying people took less money to work in a snowboard shop than a ski shop or are you saying changes in the labor supply year-to-year drove wages up or down?

People took less to work at the 'cooler' snowboard shops and the labor supply was high relative to the jobs. I only had 10 employees between two stores and very little turnover (unless someone moved)

I'm sure it's different now but at least 1/2 of ski shop workers were snowboarders who couldn't get work at a snowboard shop

 

[Spartanmack]

What I'm talking about is a high frequency idea. And it's wouldn't really be about targeting 1 specific opponent as an effort to characterize all of them. I wonder how many firms do this. There's only so much real estate around the exchanges. But if you can't figure out what's purchased by high frequency algorithms and what isn't, the idea doesn't stand much of a chance. Maybe that's a part of the anti-gaming strategy you mentioned.

If I understand you correctly, I think that is a lot of what IEX does - although, as an exchange they do it to make the market a more fair, level playing field, improve price discovery, etc, etc (or at least that's how they market themselves) as opposed to beating the HF traders at their own game. Again, I don't live in that world but feel free to PM me if you have a more specific question - I can't answer and I doubt anyone here would as our quants build fundamental driven models that generate trade ideas - none of them are true HF traders but I'd be happy to turn over some rocks and see if I can find someone for you to talk to.

 

[Spartanmack]

People took less to work at the 'cooler' snowboard shops and the labor supply was high relative to the jobs. I only had 10 employees between two stores and very little turnover (unless someone moved)

I'm sure it's different now but at least 1/2 of ski shop workers were snowboarders who couldn't get work at a snowboard shop

Are they that specialized? Resort shops tend to be smaller I guess but I would have guessed a lot of stores would have both under one roof. Don't really know - never tried snowboarding or shopped for the gear.

 

[TheVictors]

Are they that specialized? Resort shops tend to be smaller I guess but I would have guessed a lot of stores would have both under one roof. Don't really know - never tried snowboarding or shopped for the gear.

It's more corporate now and not specialized (like MF shops buying ETF providers, ski companies bought snowboards) but my point was pay was negotiable based on factors like demand and not arbitrarily driven by policy

 

[Sbee]

It's already happened Red. The "ditch diggers" comment.

Only today it's not ditch diggers, it's service employees. The US job force/economy is increasingly made up of service workers like Starbucks and other restaurants and hotel/hospitality.

Not taken as literally digging ditches any longer, the world will always have tiered employment and pay.

The most overpaid job - BY FAR - in my opinion, are realtors. Why the fuck these ass clowns think they "earn" 6% of the sale price of a home for doing nothing more than the internet does is beyond me.

And with the recent boom here again in real estate, you hear plenty of bragging coming from that job type.

What a waste b

You know that 6% is split between the agent of the seller and the buyer, then their brokerage house takes their cut. It's also a 100% commission job and they have to pay a lot of fees for their marketing. If you have problems with it you can always sell by owner.

Not saying 6 isn't high but it's not like they're making 18k themselves on a 300 house. Also most houses cost much less than that but the amount of effort to sell a 60k house is very similar to that of selling a 500k house

 

[tinselwolverine]

In California a lot of listing agents ask for 4%.

 

[Spartanmack]

You know that 6% is split between the agent of the seller and the buyer, then their brokerage house takes their cut. It's also a 100% commission job and they have to pay a lot of fees for their marketing. If you have problems with it you can always sell by owner.

Not saying 6 isn't high but it's not like they're making 18k themselves on a 300 house. Also most houses cost much less than that but the amount of effort to sell a 60k house is very similar to that of selling a 500k house

so if it's not that much harder to sell a $500k house, why should the seller pay $30k to some schmuck broker when the other seller is paying less than $5k to the same broker for the same work and the same result? Oh, I forgot who I was talking to - it's because he/she can afford to pay and therefore should, right? But wait a second, it's not necessarily a more profitable sale just because his selling price is higher. Man, this is a bit more complicated.

 

[Sbee]

so if it's not that much harder to sell a $500k house, why should the seller pay $30k to some schmuck broker when the other seller is paying less than $5k to the same broker for the same work and the same result? Oh, I forgot who I was talking to - it's because he/she can afford to pay and therefore should, right? But wait a second, it's not necessarily a more profitable sale just because his selling price is higher. Man, this is a bit more complicated.

You'd think that percentage evens out over multiple sales. 6% is a small amount if you average per hour for a 60k house but more per hour for a 500k. Also, of that 30k the seller pays the broker sees about 8 -10k pre tax. For similar work on the smaller house they get about $800.

 

[Spartanmack]

You'd think that percentage evens out over multiple sales. 6% is a small amount if you average per hour for a 60k house but more per hour for a 500k. Also, of that 30k the seller pays the broker sees about 8 -10k pre tax. For similar work on the smaller house they get about $800.

The percentage stays the same over multiple sales - it's 6%. As a seller, if you tell me the work is roughly the same and I'm paying $18k and the guy on the other side of town pays less than $5k for the same service, I'm going to have a problem with that. In fact, I'm going to have a problem with paying $18k regardless of what anyone else is paying but I'm really going to have a problem with it if the service and work is roughly the same but I'm paying >3x what the other guy is. Makes no sense.

 

[Sbee]

The percentage stays the same over multiple sales - it's 6%. As a seller, if you tell me the work is roughly the same and I'm paying $18k and the guy on the other side of town pays less than $5k for the same service, I'm going to have a problem with that. In fact, I'm going to have a problem with paying $18k regardless of what anyone else is paying but I'm really going to have a problem with it if the service and work is roughly the same but I'm paying >3x what the other guy is. Makes no sense.

Its somewhat bullshit that the seller pays commision for the buyers agent. Of course if you decoupled those two only sellers would use realtors since it's easy to make appointments and make an offer but it's cumbersome to market a house.

Of course its not a mandatory service. You can always sell by owner.

 

[Spartanmack]

Its somewhat bullshit that the seller pays commision for the buyers agent. Of course if you decoupled those two only sellers would use realtors since it's easy to make appointments and make an offer but it's cumbersome to market a house.

Of course its not a mandatory service. You can always sell by owner.

it is bullshit, especially since now with the internet, buyers need agents even less than sellers. RE brokerage is a complete racket and a total ripoff. RE people have always kept tight controls on information so they could control the market and charge these exorbitant fees - it's always been one of the best ways for stupid people to make a decent living. I bought a house my family can live in for 20 years but if/when circumstances change, I will definitely try to sell it myself - skip the agent and just hire a good RE lawyer - same with my next buy, skip the agent and use that to negotiate a better price.