http://www.bloomberg.com/apps/news?pid=20601087&sid=a1yggDTr6Sh0&pos=4 If true, this is a nuclear warhead dropped on Wall Street. It is one thing to have one or two bad apples. Systemic? The entire garden is poisoneous. I have put forth an argument here http://www.elitetrader.com/vb/showthread.php?s=&threadid=180234 that the whole of investing as it currently stands sits on a foundation of smoke and mirrors. Think of it this way. It is similar to the argument that people are realizing about the dollar now that it is off the gold standard. If there is no tie to a base value that has finite supply, in theory you have given someone the fiat to print an infinite number of dollars. Fortunately, because the printing of money is controlled by only one insitution, the FED, the result for gaming the system is nullififed (others would disagree strongly with this since the FED seems out of control, but I am trying to make an analogy). But imagine if any Hedge Fund etc could print money. The dollar would probably be worth zero by now. That is conceptually at least to what is currently the problem with equities - everyone and anyone can essentially create demand for equities by upgrading and downgrading them, or any other means affecting price. If investors instead invested based on dividend, since this is a finite resource, you can upgrade and downgrade a stock all you want, or any inside information other than the dividend is going up or down, but the final say is what you get payed and that is how investors would act. Now the power shifts to the company, not the middle men that sit between investors and companies. The government just needs to make it investor friendly to invest for dividends. I could go on as I do in that thread as to how a simple fix to markets would change all of this charade, but no one wants to hear it. Too many people stand to lose by changing the system.
I'm not in the slightest bit surprised as I've always suspected this was going on. What I am suprised by is that you seem so shocked. Or am I misinterpreting? Thx D
LOL If this was true why do the mass majority of hedge funds end up not even beating the S & P 500 annually. The only mass conspiracy on Wall St. is the net effect of commissions.
I admit I am somewhat naive. I believed that the rotten apples are few and far between. Systemic insider trading is a seismic event for my psyche, if true.