August 17, 2015
With increased complexity of products, due diligence needs to unveil identities behind institutional investors. It is apparent that the strong form of market efficiency neglects the role of broker-dealers as liquidity providers in the capital markets. Measures should be put in place to protect retail investors from predatory price manipulation of bundles of exchange traded products. From the role of the BIS in the build up to 2nd world war through JP Morgan and Goldman Sachs in the Greece debt crisis, alot needs to be done to separate politics from the economics of corporate shareholding.
Dividends and capital gains are nolonger the drivers of investment to institutional and retail investors on the same pedestal. A lot of simulatory experiments need to be done to understand cognitive aspects of contrarian investors. The financial markets should not be at the whims of organized economic manipulators. Clear distinctions need to be positioned so as to protect retail investors from broker-dealers privy to material information for sale to the investors.