Dying to Invest

Pain and Gain

Death, they say, is a great leveller and historically it’s the case that this has been true. Back in the early part of the twentieth century the richest man in the world, Nathan de Rothschild, couldn’t stop tuberculosis taking his life. Today, of course, fifty cents could have saved him. On the other hand Steve Job’s vast wealth has helped him survive pancreatic cancer via the best medical treatment on the planet. Maybe, in economic terms, death isn’t what it was.

No matter, the Grim Reaper will eventually take Apple's saviour from us as he will us all. Sex is designed to mix genes to help humanity in its never-ending fight against microbes seeking to destroy us: infinite longevity would come at the price of eventual human annihilation, always assuming we didn't do the job ourselves first. In economics as in science, however, we advance one death at a time and death has been one of the most important subjects for economics: no pain, no gain.

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Dark Pools and Adverse Selection

 

Friendly Highwaymen

Scientists believe that a great deal of the universe is in hiding, being made up of dark matter which, rather inconveniently, refuses to interact with anything else and is therefore almost undetectable. In a similar fashion many stockmarket trades are now being carried out in so called dark pools, where they're supposed to be similarly undetectable. Unfortunately, despite what many users of them think, you don't need to construct a super-collider to detect trades in dark pools.

These dark pools are one way for investors to move large blocks of stock without alerting others to what they’re doing. They’re anonymous trades of indeterminate volume carried out in murky corners of the securities industry. As usual the industry argues that it’s doing investors a favour. That’s “favour” in the same way that a highwayman saved his victims from having to carry heavy bags of money about .

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