People on Wall Street and Main Street have discussed the Flash Crash ad nauseum since May 6. There have been many sound proposals discussed, like various single-stock circuit breakers and a ban on stub quotes. But there are some big near-philosophical issues that are probably worth mentioning right now.

Chief among these: The idea of speed vs. price discovery, and the point at which improvement in the former precludes improvement in the latter.

"We believe a more fundamental consideration is warranted, and this is whether the current market structure has become too focused on the speed of execution over all other factors," said Kevin Cronin, director of equity trading at Invesco, reports Reuters. "At some point, we believe that speed and price discovery have an inverse relationship, and this dynamic needs to be well-understood."

This is a somewhat radical idea and may well strike fear into the hearts of some. Does it make sense to strictly regulate speed--that is putting a cap on traders per millisecond? I don't think we're at that point yet. But this issue will be with us for a while.

For more:
- here's the article

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