This series of articles was authored to point out some of the often hidden, unrecognized, ignored, or forgotten assumptions underlying the functioning of markets in capitalism. Additionally, ways in which markets fail in their intended purpose also feature prominently.
Markets frequently fail, despite their pristine reputation among capitalists. One way is the many actions taken by buyers and sellers to tilt a transaction in their favor. These visible hands create asymmetries between the parties. Jason Voss, CFA, explains.
Markets are usually not systemic. Instead, from the bird’s-eye perspective of "Capitalism," many businesses are "opportunities" in the same way that it feels good to hit yourself in the head with a hammer: It's much better once you stop.
Markets are useful but imperfect, says Jason Voss, CFA. One imperfection is that they assume fungibility. Assuming that a dollar spent on one thing is equivalent to a dollar spent on something else has serious consequences for investors.
Markets assume a context entirely out of view of their participants, which can have deleterious effects for both suppliers and demanders, Jason Voss, CFA, observes in the latest installment of his Where Markets Fail series.
Markets are useful, but imperfect, Jason Voss, CFA, explains in the first installment of his Where Markets Fail series. One glaring flaw is their inability to discount the future. This results in many deleterious and often long-term consequences.
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Global X has brought to Cboe Global Markets an exchange-traded fund that seeks to generate returns for investors by executing a covered-call strategy for small-cap stocks. The Global X Russell 2000 Covered Call ETF is linked to the Cboe Russell 2000 BuyWrite Index. ETF (22 Apr.)
Japan Exchange Group and the Shanghai Stock Exchange have partnered to boost access to the Japanese and Chinese exchange-traded fund markets. Investors in each country will be able to put their cash into a "feeder" fund that will invest in an ETF focused on the other country's equity. Finance Magnates (22 Apr.)
Commodity Futures Trading Commission Chairman J. Christopher Giancarlo suggested that the regulatory issues facing cryptocurrency projects, like Intercontinental Exchange's proposed bitcoin futures exchange Bakkt, have to do with old protocols governing custody of assets. Giancarlo also noted that other clearinghouse participants might not "want the exposure to mutualize their risk on their interest rate or commodity futures with somebody else's cryptocurrency holdings." CoinDesk (UK) (22 Apr.)
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