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I am not a lawyer. What I see is a business relationship in which I am buying a service. What the lawyers call it when they draw up the papers is interesting, but it does not affect either the value I assign to what I am buying, or the price which I might negotiate to buy it.

With all due respect, it has nothing to do with being a lawyer...You are just not bothering to make important distinctions that are central to the discussion. Specifically, the legal relationship between you and an institution is affected by whether that relatiionship is defined by:

1. brokerage
2. dealership
3. secured creditor
4. unsecured creditor
5. share owner in fund
6. bona fide depositor (i.e., bailment relationship)

Among other things, by not bothering to make the distinction, you end up believing your alternatives are the current institutional structure or no institutional structure, thereby missing all of the shades in between.

The world I favor is one that includes all of the above, all competing on an equal footing and with none of them allowed to lend out demand deposits, for which, by definition, I would insist upon a bailment relationship. That does not preclude CDs, money market mutual funds, and a host of other relationships designed to funnel money from bona fide savers to bona fide investors. The difference between the system I envision and the one we have now is that the one I envision would not be inherently unstable and all parties will be required to bear their own losses (or if they prefer, insure with a suitably deep pocketed insurer.

You are just not bothering to make important distinctions that are central to the discussion. Specifically, the legal relationship between you and an institution is...

All that, and you come back with legal distinctions? And tell me that those are the ones "central to the discussion"? Pffft. I already stipulated to not being a lawyer, and to not caring how the lawyers end up papering what happened. Lawyers rarely initiate deals; they come around afterwards to tell us what buzzwords they used to write the deal down. We humor them in this by paying them money. It's all very important, I know, but it's not what causes anything to happen.

by not bothering to make the distinction, you end up believing your alternatives are the current institutional structure or no institutional structure

Au contraire. By taking the view from 30,000 feet, I am able to see past current legal practice and focus on the parties and what they are trying to accomplish. I basically ignore institutional (and technical) form and try to imagine how this would happen in an ideal world. Sometimes the result of doing this is impractical, but other times it spots an innovation that would confer competitive advantage on the first guy who tries it. I know that because I've done it.

One of my better stock-picking rules is to sell the minute a company appoints an accountant or a lawyer to the CEO spot. Sometimes these guys surprise me, but mostly they don't.