Today, a huge bourgeois class of managers stand between market values and buyers and sellers. Mutual funds, ETFs, ETNs, institutional credit swaps and CBOs are examples of how the power elite rakes in huge fees. The stock market exists to generate these fees, independent of returns.
We saw in the LIBOR rate scandal (banks rigged the London rate that determined global transactions), managers lean in to spotlight capital goals, ignoring fundamental pricing. (How do you price an Apple, whose cash alone ranks 55th in national GNPs, esp. when investors will never see that wealth?)
As terrorism has become stateless, so has the movement of global capital. In this stateless environment, American markets are driven by algorithms; silent, massive computing power, reacting in nanoseconds to sweep profits and capital from fractional changes–highly sophisticated tools leverage and increase wealth. (Goldman once altered the copper market!)
Market crashes have been caused by these interlinked (by data) algorithms. Their program trading strategies are so narrowly focused, the markets have all installed breakers!
The New York Stock Exchange is not independent but is owned by a holding company (which it lists!) and was recently owned by Euronext; London owns Toronto. We see exactly the same stateless accumulation of financial markets that we see in global capital.
Markets are building a firewall around wealth. Policy is a hollow sham.
Bull Market Blues http://nyti.ms/29Jy7Z7