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Parable of securities market regulation

  • July 26th, 2012

Brilliant short parable on securities market regulation and abstract investment theory. Thank you Financial Times.

There is a twist in New Zealand. Just in case any rude outsider should claim there are no clothes on the  regulators and psephologists who live off securities markets, the Financial Advisers Act 2008 makes it illegal for anyone who might be thought to know something to talk about investment matters without a licence from the council of insider high priests. 



Yes, the result of the ever-tightening financial markets regulations has been ever-greater isolation of investors from true market signals (i.e. the actual bulk of the beast). The whole regime is based on the premise that the regulators will know more than the market about who might be trading with privileged information or some such other behaviour deemed to be naughty by the regulators. This premise is wrong, of course, which is why financial markets regulation will never do anything other than protect the poorest performing institutions and investors.


Kiwifruit…I think you have it completely wrong…the lack of regulation i.e repeal of the Glass Steagal Act and Greenspans tragic the 'efficiency' of self regulation has lead to the GFC…reckless gambling,greed and outright criminality.The markets are rigged,disclosure a joke…obsfucation ,ramping and insider trading de riguer.Capitalism has been exposed as a shonk of mind numbing proportions ,relying on propping up the ruling classes,and too big to fail enterprises masquerading as champions of the free market.Inequality and indebtedness,is what it is all  about.Feudalism with concessions and new window dressing.

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