"Why the Market is Slowly Dying" - Zerohedge

[C. Flower]

Is the market illiquid or insolvent ? World GDP, last time I checked, was still growing. Why would the financial market be dying ?

Any thoughts, disagreeing, agreeing, or explaining in plain English, this Zerohedge post ?

.

...the days of equity capital markets in their current configuration are numbered, we now note that none other than Morgan Stanley's Quantitative and Derivative Strategies released a note which, with a three year delay, effectively predicts the end of capital markets in a world where every declining retail participation (another topic we have been hammering for the past 3 years as it is only the most natural response to a world in which not only equities are openly manipulated by central banks, but in which perpetrators for massive market disturabances are neither identified nor prosecuted) is replaced by artificial high frequency trading churn, which never was and never will be a true liquidity provider on a long-term basis.

To wit from Morgan Stanley: "In our mind, many of the approaches to algorithmic execution were developed in an environment that is substantially, structurally different from today’s environment.

http://www.zerohedge.com/news/why-market-slowly-dying

[morticia]

I can't help thinking that world GDP is a fanciful number, and even if not, it does not take into account the intangibles of using up irreplaceable resources.

I'm not sure I entirely follow ZH's argument, but one can independently think of lots of reasons the markets are eventually toast.

1) pensions. Too many elderly per taxpayer across much of the West, not enough money, leading to the gradual (or not so gradual) emptying of the funds.

2) the banking/sovereign debt crises. Sooner or later, the system will evolve (or revolt) against obvious "propping up" of private markets, monies and banks by the central banks, either on grounds of inflation or on grounds of excessively accumulating debt. Once this comes home to roost in Germany or France, for example, as opposed to the peripherals, there will be reform.

3) There is not enough money out there to keep paying for current living standards (everywhere) and for the escalating price of energy. Either living standards have to fall, or capital gets used up and debts remain unrepaid (or both). Meaning that there are fewer players and less money in the markets, or that the central banks have to print money to maintain things.

[riposte]

There is not enough money out there

morticia ..... that's some statement .... you'd need to define money, how it comes about, who brings into being and controls it's flow throughout the world before you could make a statement like that. You might as well say "there is not enough space out there."

[riposte]

Is the market illiquid or insolvent ? World GDP, last time I checked, was still growing. Why would the financial market be dying ?

Any thoughts, disagreeing, agreeing, or explaining in plain English, this Zerohedge post ?

.

http://www.zerohedge.com/news/why-market-slowly-dying

I wouldn't claim to know whether the markets could die ......... but it is my belief that people the World over have lost faith in "insurance." This is a financial product which has been a large part of the markets for many decades ..... but with more and more Insurance companies refusing to honour payments on spurious grounds (because of the collapse in their premiums ) this is certain to be a downward spiral as more and more people begin to regard all insurance as a fraud.

[ang]

equity capital markets in their current configuration are numbered

That is logical because there is NO equity, think ECB collateral and replace ECB with markets. The collateral is "illusional" at best.


@riposte is correct about Insurance too and of course that great big financial farce CDO's. How can markets be solvent if the only thing backing them is "illusion"