It wasn’t bad enough that day traders could buy and sell stocks minutes apart to take advantage of miniscule fluctuations value. Now computer programs can do that in milliseconds. Almost half of all trades are now managed by computer trading platforms.
Now Wall Street has the equivalent of “The Cloud,” but a dark cloud. It’s called “Dark Pools.” One sixth of all stock trades are done by these Dark Pools completely beyond the regulation of any government agency anywhere.
It’s not bad enough that hedge funds and the Too Big To Fail Banks enjoy 30:1 leverage (a wealthy investor gives them $1 million with which these firms can they purchase $30 million in securities – when you get a 5% annual return on your mutual funds, they get 150% return). They get to sell $600 trillion in derivatives to corner the market – ten times the annual output of the whole world… We’re all slaves.
Dark pools are so named because they are networks that traders can use to hide large trade volumes until they are completed. Traders don’t want word to get out because then the institutions who place these giant orders would lose money, so they hide everything. Nobody knows a single trade has been made until suddenly there are a million more (or fewer) shares listed on the stock exchange.
There is no transparency and no accountability. There is no chance that other stockholders can find out what is happening; say after 10% of the shares are sold; to take less of a hit. The Dark Pool players themselves get to sell all their shares at one price and thus are able to maximize their profit; while everybody else takes a major hit as soon as word gets out that a million shares have been sold and the price drops like a rock.
Dark Pools, another way the rich get richer. Another clever way the hyper rich steal from mom and pop investors.
Couple 30:1 leverage in one of these Dark Pools and what you’ve got is easy money. VERY easy money.
What a racket.
