Saturday, November 10, 2012
Where have all the Investors Gone?
If you read the Wall Street Journal or any of the business magazines or newspapers, one would think that every American is an investor? In truth, we have become a nation of mostly fixed investors scarred by the recent Crashes...and most of the trading is done by computer quants for large hedge firms or banking institutions and their propreitary divisions, and yes those are the very ones that inevitably do not supervise their employees very well...and thus...there are trading losses...like the recent one for 8 billion dollars by the "London Whale." These trading machines and their minions are adored by the current business model, and thus they have short names like movie stars, maybe Cher, Rocky IV, Bond etc....They are the "quants", the programmers, sitting in the room with all the screens, and if not writing some new code for automatic buys, they are playing poker or some other game. It is a new world.