Hi joe, have to agree to disagree. Loan for a house hard asset, loan for stocks paper. Loan to grow business hard asset sort of lol. The thing I have against lending is most people who use don't understand your first point agreed.the problem is with flash crashes and glitches in algobots when trading against each other can set off a chain reaction releasing an exponentially large volume that may be many times greater than highs.
I have seen the HFT programs in real time sell down through stop loss after stop loss. To cut along story short generally if a human trader was to manipulate the market it's a visit to the regulator if a bot manipulates the market it's a glitch. Meanwhile those who have been duped by the computer and flooded the market with volume from calls or stops releasing changes the whole supply and demand- volume weighted averages.ect ect.
It can change the market dynamics for a setup you may have waited months for. HFT bad...
In the age of free money it's tempting for people borrow to invest, China is a prime example of what shouldn't happen, a correction now would end up almost cataclysmic due to over leveraged amateurs. The amount of investor debt smashed into the pyramid top they have built will look ugly when 30 million margin calls get hit simulatenously. Could send the bots into optic fibre meltdown. All just my opinion of course.
