This is a curious argument. If a car mechanic changes oil in your car and charges you 20 bucks, does he tax society $20? no, in this case value is being created, which is a fixed car. In the case of Rentec and other firms, the value is more liquid markets with different assets priced fairly with respect to each other. You may think that value is small, and it probably is, compared to say, saving lives, etc. - but it is no less real
From Wikipedia "In business, economics or investment, market liquidity is a market's ability to facilitate an asset being sold quickly without having to reduce its price very much (or even at all)." That's as much as I know about liquidity, so I am prepared to be enlightened.
If you are an investor (as opposed to an HFT trader), what problem of yours does it solve if you can buy/sell in 1min or 10s or 1s, as opposed to in 0.001s or 0.0012s? If not your problem, then maybe of the society as a whole, or some group within it, excluding those who benefit from HFT trading as such?
I have no issue with a window. The institution cares more about liquidity being reasonably deep than executing in a nanosecond.
There's always going to be a situation where a market maker on a 'floor' has an edge in analyzing short-term flow and setting a market-clearing price second by second, and a big upstairs institution has an edge in size and longer-term analysis, and the upstairs guy is paying something for liquidity.
I don't think the market-maker is providing 0 value, but probably better if less energy gets spent on guessing what everyone else is doing and spy vs. spy gaming the system, and the more level and transparent the playing field is the better.
