Monday, June 23, 2014

Wall Street and Washington want you to believe the stock market isn't rigged. Guess what? It still is

Michael Lewis woke up Average Joe investors, but the fat cats are still trying to lull you into financial submission with their intellectual dishonesty

Heidi Moore, The Guardian

Most Americans don't think much about the stock market, and that's just fine with Wall Street. Because once you wake up to how screwed up the stock market really is, the financial industry knows you're likely to get very nervous and take your money out.

Many are catching on: between 2007 and 2014, investors pulled $345bn from the stock market. E-Trades are down and worries are up, with 73% of Americans still not inclined to buy stocks, five years after the financial crisis.

No wonder "investor confidence" – the mass delusion that the stock market is trustworthy – has been in short supply this year. Nothing has done more to decimate it than Michael Lewis's new book, Flash Boys, which focuses on the predatory behavior of high-frequency trading. Nobody – including Congress – cared much about the "high-tech predator stalking the equity markets" before Flash Boys hit the bestseller list, reaching beyond the walled garden of the financial industry into American dining rooms and Washington hearing chambers. It didn't leave all spring.

So last week, Washington featured a lot of handwringing, in two separate Congressional panels, about how to convince Average Joe investors that the stock market is their friend – even when it obviously isn't. And it's great that elected officials and Wall Street millionaires are talking about investor confidence. But they're not talking about what really matters: investor protection. Guaranteeing that everyone gets a fair shake.

(More here.)

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