You know who I think is behind the inexorable rise in the stock markets, despite such a rise making NO SENSE AT ALL in terms of the underlying fundamentals of sales, consumption, debt levels, profit and dividend? – the Borg! No really. I think the Borg are working at the Proprietary Trading desks of the Big Five. They go there every day, crank up the quant trading algorithms, plug themselves in and say in unison, “Resistance is futile. You will be assimilated!” And we are being.
I wonder if some journalists haven’t been assimilated already. Certainly a lot of politicians, based on personality, empathy and humour, must be Borg.
I mean lets look at the evidence of Borg behaviour.
FIrst the volumes of trade are low. There is little evidence that the army of small traders is committing its money and buying stocks and neither are they selling. So who is? Well again the evidence from the markets shows that much of the gain is coming at the end of the day and in the futures pit and it looks very much as if the trading is being done ( as I and many much better informed people have argued ) by the Proprietary trading desks of the big five banks. They, especially their quant trading outfits (machine trading) are selling the stuff to each other. It might seem a pointless exercise except that by trading back and forth between them they drive the price up. In another era such actions might have been termed ramping ( a kind of market manipulation) and been seen as suspect if not illegal.
The long term goal, of course, has to be to off-load the stuff on to someone else (a non-borg person that is) – assimilate the profit and leave less perfect beings holding the ramped and now dumped ‘doings’.