:: we haven’t seen the market crash ::
IMO, Blackrock and Vanguard trade between themselves (churning) to keep the market buoyant.
The government (DoState and CIA) keep the two alive with infusions of “black money”.
How many billions to UKR?
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Not disagreeing, in principle...though there are other asset managers and hedge funds that also move the needle. Hedgies are huge because they can leverage way up using derivatives (e.g., options).
A share of stock is worth exactly what someone is willing to pay for it. Actual corporate finance (IPOs and secondary offerings) make up a small part of it. The rest is based upon what the money thinks the price will be in the future.
Anyone with a couple $thou can buy some stock and sell it next week, or keep it forever. If Blackrock helps keep liquid this part of the American dream, then that is one thing that I am happy about.
It is not just "Smart money" that makes money. Anyone who has worked in a public company, and talked with the equity analysts, knows that the best of them are poorly informed about the actual operations of the businesses they follow. They are paid to weave a tale, and hence play a role in keeping markets thriving.
Smart, dumb whatever ... opinions on stock prices are exactly balanced at all times between buyers and sellers. That is the beauty of markets, and one of the superpowers that make capitalism such a great producer of wealth.
The volume of trades is many, many times greater than it was just a few decades ago. It's a fabulous casino.