We can fix the market, but we won't.

, "Darkness by Design," the stock market has, since roughly 2005, become dominated by ruthless and highly profitable financial intermediaries — banks and high-frequency traders — who trade against large investors.During the trading day, the stock market operates on a "continuous" basis, with the time between trades measured in microseconds.

The exceptions to the rule are the opening and closing auctions, when trading can be done in size, and the high-frequency traders don't have an edge.There is no particularly good reason why stock markets need to trade continuously. Until March 2020, for instance, stocks listed on the Taiwan Stock Exchange traded in mini-auctions every five seconds.

When Taiwan switched to continuous trading, the move increased both trading costs and adverse selection, according to aThe exchange itself, however, saw higher volume, higher fees, and higher profits — which explains why it switched.It's hard to see the U.S. moving to a system of "frequent batch auctions," or discontinuous trading — no matter how much better that would be for investors — because such a move would be bad, financially, for the exchanges themselves.

The events of last month, however, underscore that auctions are much more robust than continuous trading, and are much more efficient for the large investors — pension funds, insurers, and the like — who invest on behalf of everyday Americans.America has too many stock exchanges — well over a dozen — and, as Mattli compellingly demonstrates, a set of toothless regulators who seem incapable of enforcing rules about what happens on them.

In an ideal world, there would be no continuous trading. A series of auctions would be much more effective at providing investors with the liquidity they need, without any bid-offer spread at all. They don't even need to happen every five seconds; a handful of auctions per day would probably suffice.

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