> Equities is being run over by ETFs, none of these funds have that much alpha, HFT was just some stupid inefficiency firms realized that could do in like 2008, by 2019, HFT is barely profitable. Whenever these firms make money from fast trading, what they are really doing is stealing money from pension funds and peoples 401ks. Clipping and front running trades shaves a little from the price and puts it into the pocket of some "genius" at Two Sigma. You can shout all you want about how intelligent these people are, but the whole thing is crooked. Secondly, watch how fast these places go out of business when the market tanks. Massive bull runs and "prestige" have these guys claiming to be kings of the world, but really, the financial industry is about raising a ton of investment money and figuring out how these fund managers can siphon it off into their own pockets. Which is why ETFs are so popular now.
This is entirely false. I'm not sure where you think you're getting your information from, but it is not accurate. Most highly successful quant firms didn't get that way by raising a ton of assets. They got that way by turning a small amount of seed money into a lot, via returns.
> When Two Sigma starts making too much money, the sec starts knocking on their door. Because its obvious theyre exploiting the market and extracting wealth. So they dial it back, and keep just some. This kind of thing is never talked about in public, but it happens all the time. Constant negotiation between which trades are ethical between computerized traders and the US government. All that 50 Billion in wealth really came from Goldman. Go look on linkedin, all the top people there jump between TS and Goldman.
This is also just absurdly untrue. Nobody is knocking on Renaissance's door when they make too much money, if they did, they wouldn't have been posting the kinds of returns that they do.
You're talking like you're familiar with the industry, but so am I. And basically everything you've said here is just completely wrong. Maybe you worked at a bad firm or something, I don't know. But there are players here who are consistently making large amounts of money from statistical arbitrage, and high frequency trading that has nothing to do with exploiting inside information. And no, the SEC is not knocking on anyone's door for "making too much money".