Every system has its advantages and disadvantages, and our hyper-complicated (if not complex) financial system is no exception.
Those risks are poorly disclosed and often investors are completely unaware of them, and this includes financial professionals working within the system.
This episode begins to correct those murky deficiencies by connecting the legal issues identified during our deep-dive into The Great Taking to the actual market structures and components that arose in response.
Guess what? Wall Street’s gonna be itself and skim and find ways of separating us from our money. It’s what it does.
But our regulators and those charged with overseeing the market structure and that its rules are followed have largely been missing and action.
All of which boils down to this idea:
Our sense of risk now has to be adjusted with these new understandings especially including any reassessments we might individually make about whether or not the legal system will fairly and impartially adjudicate claims in a timely fashion for all parties equally.
I certainly don’t have that view anymore.
Links:
SEC Image of Market Structure – Boxes and Lines
https://www.govinfo.gov/content/pkg/FR-2015-12-31/pdf/2015-32755.pdf
Wall Street Bonuses
https://www.institutionalinvestor.com/article/2czsnmybndd1t2e20prls/corner-office/wall-street-bonuses-fell-as-profits-rose-in-2023
Citadel’s Earnings $8.1B
https://finance.yahoo.com/news/citadel-most-successful-hedge-fund-175619548.html
Bernanke Joins Citadel – 2015
https://www.reuters.com/article/idUSL2N0XD1B2
Citadel Handles 26% of All Equity flows, 99% of All Options
https://en.wikipedia.org/wiki/Citadel_Securities
Dark Pools
Derivatives $1 trillion or $2.3?
https://radixuk.org/opinion/the-looming-quadrillion-dollar-derivatives-tsunami/
https://goldbroker.com/news/two-quadrillion-dollars-global-timebomb-2261
MF Global
https://www.investopedia.com/financial-edge/0312/what-happened-at-mf-global.aspx
https://archive.nytimes.com/dealbook.nytimes.com/2013/11/05/mf-global-customers-will-recover-all-they-lost/?_r=0