From: rah@shipwright.com (Robert Hettinga)
Date: Tue, 21 Jun 94 16:33:03 PDT
To: perry@imsi.com
Subject: Re: e$: Geodesic Securities Markets
Message-ID: <199406212332.TAA19688@zork.tiac.net>
MIME-Version: 1.0
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I don't really want to thrash this out point by point, but I will anyway ;-).

>Perry Metzger says:
>>Robert Hettinga says:
>> Strong crypto accomplishes 1, and e$ protocols make 2 and 3 meaningless.
>
>Not really. Not all commodities are fungible.

Agreed. And?

>Not all entities are
>willing to conduct all sorts of trades with all other sorts of
>entities.

No, but buyers of a specific security might want to buy those securities
from those who hold them...  Could you elaborate on your comment, please?

>Besides all that, someone has to hold physical goods,

Unless it is a stock, bond, derivative, call option, etc.  Most of which
are "held" in offsetting book entries at brokerage houses, banks, and
clearinghouses. If it's not kept there, then you need a certificate of some
sort (though I'm hard pressed to have heard of a certificate for a call
option, say), which might as well live on a hard drive as a desk drawer. I
guess I was saying that it could be that a "certificate" on a hard drive
was as tradeable, as "liquid"? as book entry in a clearinghouse.

>and
>investing will continue to be a realm for which expert advice is
>purchased.

I thought I did say that people like portfolio managers, anal(ah, I
*didn't* say *analysts* back there... OK. There.  I said "analysts")lysts,
investment bankers etc., still played their usual roles.

For example, a market analyst essentially sells his time to a brokerage
house to write reports on securities.  Those reports are then "sold" to the
brokerage's customers in exchange for brokerage fees.  They don't have to
work for brokerage houses any more, even. In the institutional markets, it
is now a common practice for some percentage of a commission to go on a
soft-dollar basis to third party analysts for their work.  (There was a
time 10 years ago or so where portfolio managers were getting *junkets* to
investment "seminars" in tropical locations on soft-dollars.  They don't do
that much anymore, I'm told.)  In an e$conomy, you sell your reports
direct.  Newsletter writers do it already.

Our "Peter Lynch" (forgive me Mister Lynch, I take your name in vain)
successor sitting in Marblehead would do some background e$ transaction to
have the report stuck on the screen of his trusty UltraPowerMac VXXI (next
to a Ren-N-Stimpy rerun) as soon as it came out.

In that case, as we said before, the mutual fund is where the investment
advice, the "editing" *is* being purchased.  But if an individual, or even
a professional trading his own money for his own profit, wanted to trade,
he only need put up one of two things to do so.  Money if he's buying, of
the securities if he's trading. In either case you don't really need a
brokerage firm for that...

Thanks Perry.

Cheers,
Bob

-----------------
Robert Hettinga  (rah@shipwright.com) "There is no difference between someone
Shipwright Development Corporation     who eats too little and sees Heaven and
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