Of Efficient Market Prices and Elephants in the Room

     It's been ages since we've covered the Wall Street Crime Families, having turned our eye onto the nascent rise of communism that followed a Central Bank nationalization of the US Treasury bond market and the remarkable assimilation of national politicians into this Central Party system now ruling Washington, in large part through the heinous diversionary tactics of their propaganda machine, all those stinking national, regional, and local outlets in what has become a truly unconscionable media charade.  However, recent developments in what we think of as the financial services industry group brought our thoughts home, if only momentarily.

     Fiduciaries are dumping more expensive actively managed funds held in client portfolios, and pouring that dough into lower cost index funds.  It seems that the burden is on bankers and them these days to, as a Wall Street Journal piece puts it, "show there is a reasonable likelihood an investment will beat the market after fees", and recent statistics suggest that such has simply not been the case with actively managed funds, mutual, hedge, or whatever, for a convincing window of time now.

     What grabbed our attention was a proposition going along with this that markets would no longer be able to function properly under the new ways.  Who would be there in the marketplace to help find efficient prices if everyone was off somewhere else indexing?

     Fear not, subscribers.  The dons aren't going anywhere, or the capos who actually do that dirtywork.  Efficient prices will be rigged the same way they've always been - with the fix on.  Crime Families putting every dollar they've got behind whatever con they're pulling this time to make your money theirs.  Like always, their formidable buying/selling pressure will sky prices up before your vaunted index fund finishes a buy program and tank them down before that fund can get anywhere near close to done selling, giving mafia counterparties the average prices they need to keep family coffers stuffed full.  The sucker used to be you. Get all indexed up, and now we'll have to say it's yours.

     Call that efficient, if you want, but it's definitely the way markets work.  Everyone else getting trampled by the zillionaire elephant in the room.