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December 08, 2005



This is actually, IMO, proof that Joan Robinson was fundamentally right when she said that stock markets are "a convenience for rentiers". If it was true that the purpose of stock markets was capital allocation, efficiency, information, blah blah blah canweinterestyouinasubscriptiontotheeconomist, then insider dealing would be legal because it improves the informational efficiency of markets.

On the other hand, insider dealing reduces the liquidity of markets, because people are more reluctant to deal at the touch in case their counterparty is an insider. Which is why it's illegal.


"Nor should the law protect people who are daft enough to believe what they read in dead trees." Really? You never believe what they say? You're beginning to make me think that Baudrillard was right.

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