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Joseph L. Shaefer » Comments » BEN

  • SPDR’s KBW Capital Markets: Large-Cap Brokers Rule This ETF [View article]
    I’ve been a capital markets insider for nearly 40 years – as broker, institutional broker, branch manager, regional manager, head of trading, and now an RIA – and even in the best bull markets, I’ve never seen the industry priced for perfection like it is today.

    What could happen to change this? I don’t know and neither does anyone else – but I can speculate that any of the following might mean a rather severe re-pricing:
    • Collars on program trading which these firms ride roughshod over
    • Increased national or state regulation from publicity- or office-seeking Attorneys General or as a result of public backlash
    • Increased competition from foreign banks, insurers and brokerages that didn’t need bailing out, such as cash-rich banks in Canada that already own US subsidiaries
    • A market pullback leading to a decline in M&A and IPO activity (it doesn’t matter if retail trading declines – the public is reduced to just over a fifth of market volume. These firms consider retail clients an annoyance)
    • Stupidity, greed and arrogance on the trading desk. It’s not like they haven’t been there before…
    Jul 23 15:56 pm |Rating: +4 0 |Link to Comment
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