Everyone wants to be granted one wish in their lives, hell i know my wish was to be an astronaut after watching the movie Space Camp at age 7… that fell through. I guess now i’m a trader, did i think i would get here? No, i thought I was going to become the next Indiana Jones by the time i was in 5th grade.I guess i am still an explorer of sorts, a market explorer who searches for liquidity with dollar bills floating atop the surface tension.
If i had one wish i would would have been better prepared for the 2008 downturn, being a young trader coming into arguably the most volatile market since the 1929 i was almost overwhelmed by all the data and movement, which has made me a better more prepared trader. What if the market had one wish? What do you think it would be? erhaps the stock market wishes it’s tarnished public image could be erased at the flipof a switch? We can argue all day over which aspect of the past two years created the most doubt in the validity of our markets.
Where has the doubt come from? Lets focus a single firm’s domination of program trading, aka Goldman Sachs. They in my opinion are responsible for creating the most doubt and in fact instilling greater and greater belief wall street is untouchable by the little man, of course the government helped them along as well. The little man thinks he will always be wrong because the little man is out of the know, until the little man feels his edge is back in his favor he will forever be afraid to enter the market. Goldman Sachs might have helped provide liquidity because of all the very cheap money floating around, it is proven they simply do not ever lose on a trade, this is not possible but apparently it is possible. By adding all this liquidity think about everything they have destroyed..
Remove all the bullshit cronyism and shrouded traded trading practices you might actually have a respectable market Mr. Bernake. If you focus on what will bring the little guy back into the market, not what will provide the best edge for institutional trading desks we may be at a starting point. In the end it was the middle class which invested in stocks and believed they too could become wealthy alongside the professionals with just a little bit of hard work patience. The stock market has recovered off the lows yes, but unemployment and small business is still struggling to keep things going, why because in all reality people judge their buying power on the value of their home and what the stock market is doing.
Stock market up, families feel financially safer, yes the market is up off the lows, though people do not feel safer because the market has not been granted the wish of repairing it’s terribly evil image the regulators have created the past two years. The past two years we have seen regulators, and our elected officials allow all kinds of terrible things to become everyday occurrence in the market.
If Goldman takes itself private i believe people will again believe the game is not rigged, even though the market probably will still remain illiquid for sometime. You gotta start somewhere, with elections coming up in less than 100 days maybe the market might just get its wish. When the market can see 10 years into the future without having to worry about new laws and regulation, the penny chasing liquidity providers will need not to be in business because the little guy will be back scalping these markets providing natural liquidity.