Exchange Traded Funds? Now what could they be? This is the all new, way old, good old boyz concept of by-passing Derivative and Hedge Fund Regulations!
We should have known that “Liars figure…..but figures don’t lie!” is the cardinal rule of Wall Street and Bahnhof Strasse! If there is a way to get around rules and regulations and protections for consumers….”they” are going find a way. So, let’s cut through all the obfuscation and misinformation and try to figure this puzzle out.
Globally Exchange Traded Funds….are starting to accumulate going upwards of $862 Billion dollars……worth! Hardly, a huge amount, but considering their rapid rise and expansion….they might be worthy of a little oversight. So, before we run off in the heat of the day on this little market we might want to take a quick overview so we can get a feel for what we are talking about.
The three links below take you from the SEC Regulation in November of 2005 to the present:
http://www.sec.gov/divisions/marketreg/mr-noaction/sia112105.htm
http://seekingalpha.com/article/143402-obama-s-regulation-overhaul-financial-etfs-in-focus
http://etfdb.com/2009/responding-to-calls-for-etf-regulation/
So, what next? ETF’s are open-ended index funds that trade like stocks!
Launched in 1993 primarily as equity vehicles, EFT’s now cover a wide range of assets, from fixed income, commodities, currencies, hedge funds and private equity. So, how are we going to Regulate this market both Globally and Domestically again? How can we control what “off-shore banking” and independent Governments might do with these babies?
The new Chair of the Securities and Exchange Commission, Mary Schapiro has been doing a good job so far of chasing after some wrong doers….but perhaps the “Mega-bankers” now have a new strategy…..”over burden the system to the point that they can’t get us all!”. We will have to see how all this plays out in the coming days.
What is so dangerous about ETF’s” – just one phrase: “Leveraged Investing Vehicles”! The Development of complex formulas that promise to deliver magnified returns from any given index……sounds all to familiar! Want to jump on board…play with the big guys? Be careful out there!
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