Last weekâ??s implosion of Knight Capital, the biggest market maker in U.S. equities, created anxiety among traders and investors alike. The latest in a series of electronic blow-ups and glitches, it again raised the question of how reliable markets are in an age of high-frequency trading.
But watching it unfold online and on CNBC, I was struck by the disconnect between the pros whose opinions populate the business media and those of average investors who are supposedly one of the main reasons these markets exist.
The pros and the media commentators who echo their views were obsessed with â??liquidityâ? and â??restoring investor confidence.â? Average investors might as well have been living in a parallel universe: To them the markets are hopelessly rigged and they have no confidence left to restore.
Read Full Article »