As it has grown, Direct Edge and other new venues have sucked volumes away from the Big Board and Nasdaq. The N.Y.S.E. accounted for more than 70 percent of trading in N.Y.S.E.-listed stocks just five years ago. Now, the Big Board handles only 36 percent of those trades itself. The remaining market share is divided among about 12 other public exchanges, several electronic trading platforms and vast so-called unlit markets, including those known as dark pools.
Think about this for just one second. Stocks listed on the New York Stock Exchange are only traded on the exchange itself 36 percent of the time? What on earth is going on? Where is the bulk of the trading taking place if not on the regulated, public exchange? Other exchanges and.. unlit markets? What the hell is an unlit market? Does that sound like a good thing to you? Dark Pools? Do you know what that means? It means that the trading - 70 percent of it - is being done off an exchange. Do you, dear reader, know the purpose of an exchange!??!?! Its to ensure that all the people trading on it are doing it with real money, with real collateral for the contracts they have entered into. So if I sell someone a stock, the exchange verifies with my broker that I really have the shares. Or if I sell a stock 'option' - a type of bet based on a given stock and its price, that I have enough money to cover that sale, should the price move against me.
Given that some stock option sales have virtually UNLIMITED EXPOSURE and RISK (see selling naked), I find it to be QUITE REASSURING that SEVEN OUT OF TEN trades, trades of UNKOWN TYPES AND AMOUNTS are taking place EVERY SINGLE DAY in the middle of a global credit and currency crisis on no exchange with zero transparency into them. With no exchange, we have no idea what the prices are. With no price discovery of ALL trades and stocks at ALL times, the actual price of every stock is in great doubt. Do tell me, dear reader, HOW CAN WE KNOW EXACTLY HOW MANY TRADES and IN WHAT AMOUNTS are taking place in dark pools if they are not traded on a PUBLIC exchange? Or perhaps this is why we are having sudden "flash crashes" of stocks on a microsecond basis with no "black swan," or unforeseen, catastrophic event to cause them!
Now, this is America and in America, we honor private contracts between private parties. Its none of the government's goddamn business who is doing what with whom. HOWEVER, when TAXPAYER, that is, PUBLIC money - YOUR MONEY AND MINE - is being used to bailout these private parties BECAUSE THEY TOOK TOO MUCH RISK WITH TOO LITTLE COLLATERAL (itself, fascist and corporatist), then EVERY SINGLE TRANSACTION BETTER GODDAMN WELL BE MONITORED TO ENSURE THE PRIVATE PARTIES CAN PAY AND DO PAY, WITHOUT CAUSING A NATIONAL CRISIS AND DEMANDING OUR MONEY. And instead - INSTEAD - these private parties are allowed to deal in secret, without public knowledge, yet still enjoy public guarantees, public money and public backstops?
And then of course THERE IS THE FEDERAL RESERVE BOARD. This is quite literally every rich man's best friend. This is a private bank. Read that again, dear reader. A PRIVATE BANK. This bank's chariman, Ben "Heliopter" Bernanke, may be appointed by the President (another bank employee) and confirmed by the Senate, but he doesn't REPORT to them. He reports to... well... the nation's PRIVATE BANKS! He's the backstop for the banks. He prints money and gives it to them (at about 0% interest) and buys all the garbage loans they've made to part-time Target workers for 500 grand homes. This man is a bankster's best friend.
So this is The Scam: the private banks lend wildly and recklessly and buy stocks (historically, a VERY risky asset), bonds, foreign government debt, options, mortgage debt in the old days, municipal debt, hell any kind of 'investment' that they think will pay them interest or rise in price. And if the prices crash and they get into real trouble, then just call The Fed. They'll float you the loan to get you out of the mess and buy you time by changing accounting rules, lowering interest rates and even buying the junk that is crashing in value and bankrupting you - they'll buy that junk at full value. Why you just can't lose. Or did you not know how so many "banks" with "executives," "managing partners," and "joint interests" all seem to make millions and billions in salary and bonuses EACH AND EVERY QUARTER without fail?
Its because those "insiders," those "in the know," those "friends of The Fed," aren't worried. They have their own bank. And their bank takes anything in exchange for a few trillion.
You? You have a reformed bankruptcy law and a mailbox full of credit card bills and a child support agency that threatens to throw you in jail - while your "child support" (that is nearly 40% of your income - $1,200/month and up) accrues. That is, when you leave the hospital, prison, or what have you, you will owe BACK "SUPPORT" PLUS INTEREST to a woman who could very well be making six figures a year, be remarried, or both.
Now that I think about it, its a wonder all the men aren't trying to be banksters. Or may be they are.