The Wall Street insider trading investigation may lead everyday investors — already rattled by a stock market meltdown, a one-day “flash crash” and the Madoff scandal — to finally conclude that the game is rigged. “A large part of trading has to do with trust, and I don’t have it,” says Mark Swenson, a 43-year-old plumber from New Hampshire who refuses to buy individual stocks. “When a stock moves up 10 percent, you don’t know why,” he added. “We can pretend that everyone has access to the same information, but they don’t.” Even before news broke that federal investigators were looking into whether hedge funds traded on inside information, small-time investors were pulling their money out of stocks — despite a remarkable run for the market since the spring of 2009. Americans have pulled $60 billion out of U.S. stock funds this year, according to the Investment Company Institute, a trade group. Meanwhile, investors have piled money into Treasurys and bond funds that are considered safer investments. And at the same time, banks like Wells Fargo have reported that money is moving into checking and savings accounts. –Fox
Of course the final point the article tries to make is that the stock market game isn’t rigged, but this backfires, to say the least.
Numerous studies have shown that mutual funds overseen by professional stock pickers often are outperformed by computer-driven index funds.
The question the writer doesn’t ask: Who sets up the algorithms the computers are using? We far too often treat computers as if they just “grow organically,” rather than being programmed by some human someplace. Do you think the rules in those programs just might happen to be written by some insider someplace? Nah… Couldn’t be.
This sort of “rigging,” is why no-one should be surprised when large companies bid to take over huge parts of the economy through Federal regulations.
Under the deceptive title of the “FDA Food Safety Modernization Act”, the bill if passed into law will crack down not only on large corporations, but also on “small businesses and entities that sell directly to consumers”, and will give authorities power to further regulate “growing, harvesting, sorting, packing, and storage operations, minimum standards related to soil amendments, hygiene, packaging, temperature controls, animal encroachment, and water”. The Food Safety Bill (S. 510) is being heralded as more dangerous than even the Health Care Reform which passed earlier this year. Section 404 makes it clear that the bill seeks to conform to the requirements of the World Trade Organization and grants new authority to the Department of Homeland Security to oversee food production. –New Zeal
So in the name of “food safety,” we’re going to allow the Department of Homeland Security —yes, the department of Homeland Security, the same folks now committing sexual assault in every airport in the US— to control the distribution of food. Of course, this wouldn’t rig the game of commodities pricing in the US to favor big players, would it?
Nah… Couldn’t happen.