I'm sorry AC, but you are wrong. The speculative part of the markets (in proper terms the secondary markets) are a wholly necessary part of raising capital. Without them, anyone wanting to invest in a company must do so in the full and complete knowledge that they won't get any money out until the company pays off. Whilst that might seem reasonable, think about something like mining. A small prospecting company raises capital to go hunting for ore by floating penny shares on the stock market, maybe raising 1/2 million or so in the process. The hunting for ore, getting rights to the finds, and exploiting the find might take 10 or 20 years. In that time, if no-one can get any money out, very few people will be willing to invest. The secondary market allows you to invest in that risk, in the full knowledge that you can get some or all of the money out before the big payout. Each time the prospecting company gets a little further down the trail they might make a little money, and each time the shareholders can either stay in or get out. The secondary market is key to that.
Now holding periods are also key. If everyone was in it for the long haul, then the amount of trading would be minimal. And when anyone needs to trade out of their position, the liquidity wouldn't be there for them to do so. They would get seriously hurt in paying other long term players to take positions they don't necessarily want, just because you don't like short term players. In reality in the current markets, the short term players provide liquidity for the longer term players. Short term players still have issues that stop them just runaway exploiting things. Bid/ask spreads are one of those things for example.
If we look at a concrete example. Index tracking mutual funds. These generally have very stable portfolios. But when a stock falls out of the index, or is added into the index, they have huge positions to trade to re-match the index. These huge trades cost money (a transaction cost). If you look at the transaction costs for index tracking mutual funds over the last 5-10 years they have gone down. They have gone down because of the increase in liquidity from shorter term players.
Now finally, a point Tim Worstall made, but you are happily ignoring, is that the short term players have had nothing to do with this crisis. The CMOs that caused the financial crisis were very long term bets generally. They weren't exchange traded so they lacked the liquidity from short term players, and as such when they started going wrong, no-one could sell them on the way down, and they were therefore very difficult to value. The bank failures occured when the positions were untradeable and considered worthless. You do realise that a lot of these CMOs did actually have a latent value, and now the value of some of them has come back - just at lower than they were originally. It was a liquidity issue, not a short term trader issue.
Finally, your glib comment that much of the new regulation wouldn't be needed if your ill-thought out idea were attempted is plain wrong. Most of things like SOX and post-slump oversight is dealing with good governance (SOX) and management of off-exchange traded derivatives, that were long term by their very construction. All this would still be required.
I'm going to leave you with a simple problem to solve. Take oil futures. These exist because oil producers and oil users need to control expenditure through oil price fluctuations. Essentially a big oil producer sets their production amounts by the current oil price, but they know that the oil they extract from the ground takes a certain amount of time to be sold into the delivery channels (it spends time in carriers and refineries etc.). They can sell oil futures at the time it is ready for delivery. Many users of fuel use the fuel they buy straight away and don't need futures, but some do need futures. But take an airline. It is selling many airline tickets long in advance. As it sells those tickets it buys fuel futures to ensure that the ticket price covers the cost of the fuel, even though it won't actually make the flight for say 6 months. This allows someone like BA to sell tickets 6 months in advance, but still cope with large oil price fluctuations without losing vast amounts of money. Unfortunately, the timescales that the oil companies need to operate over don't match the timescales that other companies operate over. As such the oil companies can't just directly sell to the airlines for example. Speculators provide a nice facility to close this gap. If an airline wants to buy fuel 3 months in advance with no risk, and an oil company wants to sell fuel 6 months in advance with no risk, a speculator can agree to bridge that gap in return for a small fee. That is what speculative markets do. And this is what people like Tim Worstall clearly understand, but many others don't.