Why do you think HFT does not add any value to the world?
Are you arguing that the market liquidity provided justifies the amount of effort invested? Obviously it does in some purely capitalistic sense, but what is really created by this activity.
From my point of view, market participants make a living by their ability to execute OODA loops. The bot trading wars is a more extreme version of the competitive process.
A level of competition is good, because it makes people do their best. But as soon as it becomes too cut-throat, resources are wasted on auxiliary things beyond just being the best and most cost-effective.
These electronic trading boats would be an excellent example of "market failure" in this regard.
Instead of actual trading boats to trade their food and stuff, we'll now sit in the middle of the ocean to correlate some arbitrary signals... Like excessive speculation in commodities, it doesn't add value.
Don't tell me "it adds liquidity" because I already know that. One could argue we have massively enough liquidity already in the things that would actually be arbitraged here.
The financial sector overall is much too big: http://www.voxeu.org/index.php?q=node/6328
Wait... is this a joke?
Or, worse, you get half of a two-part trade that you were going to do, and you are stuck holding something or owing something.