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.
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Appearances
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 so that people are not trying to guess what the truth is.
They're trying to guess what each other is guessing.
That's right.
It was exemplified for me by a fund manager I talked to who said, I don't want to know this stuff about the competitive advantage of companies.
I just want to know what shares are going to go up.
I think it's a feature of all developed economies, but it's reached its most extreme form.
In Britain and the United States.
And it's exemplified for me by the way in which, for example, the amount of the volume of trading we have in foreign exchange is 50 to 100 times the actual volume of trading, international trade in goods and services.
We're saying for every transaction in which an importer needs foreign currency to buy some goods, there are 50 transactions in which people round about this real phenomenon of trade in goods and services are dealing with each other.
And of course now, as you know, we have in London and New York,
Possibly a majority of trades in shares being conducted between high-frequency traders are not really traders, they're computers, because actually real people can't react quickly enough to engage in this process.
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.
Showing 21–40 of 106 · page 2 of 6
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