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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (67070)	7/29/2006 11:30:36 PM
From: Joe Stocks	Respond to of 110194

What I think is most interesting about Greenspan's speech is the timing. Just after they call for a new bank, Greenspan endorses new "innovations" without regulation, and then says "But those that do exploit such discoveries earn an abnormal return for doing so. In the process, they improve market efficiency by providing services not previously available." Abnormal returns (what we are seeing from the top NYSE member banks - which are not all US based banks)improves market efficiency... I wrote the SEC a while back about the level of program trading. I received an email back from them saying that they saw no problem with it because it decreased market volatility - market efficiency. Greenspan: No one can deny that fully informed market participants will generate the most efficient pricing of resources and the most efficient allocation of capital. Moreover, it could be argued that, if all information held by individual buyers or sellers became available to all participants, the pricing structure would more closely reflect the underlying balance of supply and demand. Thus full information would appear to be the unambiguous objective. But should it be? Isn't he arguing against a free market here and for abnormal returns for those that can control the markets due to innovative opportunities? Doesn't "abnormal returns' for the select few led to sub-performance for others?