John Kay
speaker
106 appearances
4 recordings
1 series
first heard Dec 2010
last heard Jan 2013
John Kay’s voice in public audio — every appearance, attributed to the second.
Trend
recordings per month · last 12 monthsNo recordings in the last 12 months.Older appearances are listed below; set an alert to hear about the next one.
Appearances
Well, what it's about, of course, is the development of financial markets and the relationship between financial markets and companies.
And there are two or three aspects of the parable, I think, that are central.
One is the idea that the sideshow, the competition, actually takes over and overwhelms the underlying object of the fair, which is actually to enable farmers to breed and sell their livestock and get money to invest in new livestock.
And, of course, that's really what we want the financial system to do.
Second point is that in the kind of overdeveloped financial system we now have, what people are doing is not so much focusing on the underlying reality, but on what other people like themselves think about the underlying reality.
Yes, so what prompted me to write this...
actually was doing work in this government review of how equity markets in the UK were performing and realising that there was now almost no trade in what people call primary markets.
That means British companies using the stock market to raise funds for new investment.
All the trade now is in secondary markets where people are buying and selling claims on companies that already exist and that don't need any further funding.
And the paradox of that, I came to realize at the end, is that the stock market now isn't a way you raise money for business.
It's a way you get money out of business.
But does this matter?
I think it matters a lot because we need to ask two questions, really.
What value does this activity add?
And why is it so profitable or apparently profitable?
Because if we have a group of people who are sitting in a room exchanging bits of paper with each other, then at the end of the day, the value of the bits of paper which they've exchanged with each other will be much the same as what they had at the beginning of the day.
And yet what this activity seems to be doing is attracting a lot of resource, both financial resource and people, who might be doing more useful things in the real economy.
John Kaye.
Well, what it's about, of course, is the development of financial markets and the relationship between financial markets and companies.
And there are two or three aspects of the parable, I think, that are central.
Showing 1–20 of 106 · page 1 of 6
Next →