On the issue of trust … Stocks are traded based on information. And much of the trading that’s done on the stock market is based on the financial results audited by the big accounting firms. Ever read one of those audit opinions? No matter how big these firms are they don’t have the resources to truly audit large public companies. So they audit by sampling small sets of data. They rely heavily on the representations made by management; the same management that pays their fees and accompanies them to golf outings; the same management whose annual bonus is heavily dependent on a clean audit opinion and a rising share price. Who can fire one accounting firm and hire a competitive firm? Enron was GAAP compliant. Until it was bankrupt and everyone either went to jail or mysteriously died. The high-frequency trading industry collects billions in profits; the kind of money you just can’t earn unless you elbow someone else out of the way. Numerous studies show that Flash Boys-style trades a...
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