Dear rss free blog,
Outer space is full of dark energy which cannot be seen or measured, why it is called dark. But scientists now believe there isn’t enough of it. Current cosmology theories base the rate at which the universe is expanding on surveying supernovas. But the theories call for there being 10 to the 140th power more dark energy than can be explained by what is now known about space (give or take a few thousand either way).
This gives rise to theories of multiple universes with corkscrew entrances and different laws of physics that exceed the weirdness of even the weirdest science fiction writers.
Then there are dark pools, institutions trading over-the-counter and pink sheet stocks outside the reporting system. Opaque liquidity dealing off the tape also sounds weird. The name suggests a cabal of Wall Street players in a secret conclave far from public scrutiny.
“Turn on the light” is the obvious thing people say when learning that dark pools exist. Especially in a period when distrust of the stock market is so high.
Thus it is not too surprising that SEC regulations, reporting, and rules are being talked about in the current market-shy environment. In part to offset the demand for a tape, Nasdaq has just announced that its OMX will provide end-of-day summaries of Alternative Trading Systems dark pool trades. But traders do not have to give the prices if they don’t want to. And volumes will not be tracked.
This first cut has important implications for the American Depositary Receipts market, because the OMX has deals with Nordic and Baltic exchanges. That means better price information for US trading of stocks with a primary listing in these markets is coming. The markets are Helsinki, Copenhagen, Stockholm, Reykjevik, Tallinn, Riga, and Vilnius. Oslo was not mentioned in the release.
My note about the Tobin Tax in Brazil this week failed to mention that the initial proposal was to levy the tax retroactively on shares that had already been bought there by foreigners. That was sensibly shot down by the local exchanges and economists.
I still think this measure can be copied by other countries suffering from excess capital inflows and too-high currencies.
My first candidate would be the European Union where there have been French supporters of Tobin taxes for various good causes over the years. While some people react with glee to the new highs of the common currency overcoming Le Défi Américain, sensible investors know that there will be tears in export-oriented economies like Germany. The euro at $1.50 is not good news in Germany which will bear the brunt of the next round of recession. Even a rebounding pound sterling is not good news but at least Britain has already been through the worst.
More for paid subscribers follow. I am delighted that we have now signed up a second New Zealander; we also have two Thais.
