Markets going nowhere

Someone recently came up with the idea that bulls and bears have been replaced by bunnies. Instead of bullish buying pushing the market up, or bearish selling pulling it down, buying and selling were making it hop. Another recent phenomenon is that the three indexes, Dow Jones, S & P, NASDAQ, often follow almost identical daily curves. (The concordance is less obvious on the London stock exchange and on the Euro zone markets). This could be explained by the use of converging algorithms and, if machines have taken over, they would lead to a bunny’s behaviour by constantly hedging their bets, lacking the convictions of bulls and bears.

Some have warned of the dangers of digital intelligence, but no one seems to have studied this particular aspect. If a mathematical formula decides whether to buy or sell, and infinitesimal gains over innumerable exchanges add up to considerable profits, then the stock market is in fact a casino and its supposed function of financing businesses is pure verbiage. Punters play their chips, and the machine always wins more than it loses. It draws off wealth from the many to the few. And when the many are broke, the casino goes out of business. Stock market punters have been broke since 2008, and central bank cash hand-outs are losing steam, so the world’s gambling industry is on the verge of a major downsizing. The hurt all round will be severe.