Unintended consequences of market intervention As
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Unintended consequences of market intervention
As traders we all see first hand what a free market looks like. Price is everything to us. Imagine how a world in which markets directly intervened in daily stock market trading would look. What if they could set the bid, set the ask, determined quantity bought, determined quantity sold, it would be an f'ing disaster.
Unfortunately in "the real world" that is exactly what they have been doing and look at where that has got us. We have an economy based on credit as opposed to a hard currency. We have subsidized failing industries like the Auto sector. We have moral hazard as a direct result of government loan guarantees and government initiatives to saturate the housing market with buyers irrespective of credit quality.
The enclosed paper is a great outline of the different market interventions and their consequences over the years. The writer is a bit heavy on Ayn Rand, I would rather see some input from other philosophers and economists, but you can tell that this guy is or was a trader which gives texture to his market examples with regards to the bid/offer.
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