The following article from yesterday’s Wall Street Journal is a great follow up to my post from yesterday, Computers on Wall Street are Buying and Selling to Themselves!. Mark Cuban, who wrote software himself, may have a bit more knowledge on the matter than some D.C. prostitute regulator, so I am sure they have contacted him to get his thoughts on the matter. As I have said for years now, when the public loses all faith in their “leaders”(corporate and political), they lose faith in the system itself. No economy can ever dynamically grow and increase standards of living absent a belief in the rule of law. This is precisely why the U.S. will never be a strong, vibrant and upstanding society again until we take out our own trash, rather than pointing fingers abroad and blasting drones at civilians from 10,000 feet.
Key quotes from Mark Cuban on the computer dominated stock market:
I came to realize that the stock market no longer knew what business it was in. I wrote a blog that basically said that the markets for equities of all kinds had evolved to a platform for hackers.
As far as narrowing spreads, that’s absolutely true, but in absolute terms what does it translate into? For the individual investor it might save them a quarter a month. So what? Relative to the risk that’s the worst tradeoff in the history of tradeoffs
And the argument is horrible for another reason. If you’re an investor you shouldn’t care if the spread widened by a penny, nickel dime or quarter. If you’re anything but a trader the change is of no impact to whether or not the company will be successful and create returns for investors. In fact, that anyone even considers this a valid argument is a red flag that the exchanges are more interested in traders than investors.
Public companies need to figure out what business the exchanges are in. Is the market supposed to be a platform for companies to raise money for growth and to create liquidity and opportunity for shareholders as it has been in the past? Or is the stock market a laissez-faire platform that evolves however it evolves? The missing link in all the discussions is: What is the purpose of the stock market?
Full article here.
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Madoff and the rest of the Wall Street Pimps will becomes brides for Leroy.
One of the most interesting quips that has been completely overlooked by the free market blogosphere in a Q & A love fest session on capital between Jamie Dimon and Congress was when one of our elected douche bags asked Dimon if he puts the interest of his firm and shareholders first?
Any real executive officer would answer that question with brevity and simplicity: “Of course, it’s my fiduciary duty to do what’s in the best interest of my firm over the long-term—it’s in every corporate charter.”
But, no, not Dimon. What he said was more revealing: “I put the country first and foremost, ahead of JP Morgan. What happens to America is my number one priority.”
Say what? So what Jamie Dimon is telling us that his actions at JP Morgan ALWAYS has America’s best interests at heart first—and that he’ll use JP Morgan as a mere mechanism in the name of a prosperous America if he needs to? You’ve got to be kidding me. No one has a problem with this insanity?
America should be outraged by this and calling for the ouster of this insane criminal along with his Congressmen cohorts. So it’s okay by these people to manipulate markets with the largest hedge fund in America subsidized by America for the sake of the American sheeple? We should be so lucky! Like any of these people know more than the free markets acting on their own accord.
This is so outrageous on so many fronts that it’s useless to post all my thoughts on a blog thread that will be forgotten at the blink of an eye. So let me keep it brief, when Krieger says we’ll never forget who is responsible when the whole thing blows up let us put Dimon at the very top of this list. He has financialized and completely gutted an American economy with the creation of fine instruments like CDS and HFT machines and has overrun all markets of any resemblance of being free and fair. They have perpetuated this fraudulent economy for so long at everyone elses expense that I truly believe Dimon, et al actually believe their own sense of self-importance at this point.
That this insane madman thinks that he is doing any of us a favor by spitting on the constitution, by eliminating free and sound markets, by overrunning markets with outsized, manipulative bets in the name of America is the greatest blasphemy I’ve publicly heard. And yet, it will all continue until it just can’t any longer no thanks to the sheep who haven’t bothered with this tyranny as they are too busy collecting their SNAP cards from Dimon at the moment to give a shit. What a joke. Where is the America we once stood so proud of?
In the stock market you are victim or opportunist. Funny fiat money distorts the market more than any Wall Street shenanigan will ever produce. The best part…thus the opportunities!
Wow, what nonsense. So suddenly the Ayn Rand fan is the passive victim? Or are these businesses suddenly on trial for what they offer the world? What “value” have this guy’s companies had (to anyone except himself) except to serve as storing places for printed fiat?
The business of business is business…nothing is free, unfortunately. All in all I’d say that anyone who has benefited so hugely from the money game might not have a leg to stand on when it comes to complaining.
Stock markets are nice investments but you should study first how the stocks move up and down, otherwise you would lose a lot of money from it. ””“
Kindest regards
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