stock exchange demutualization

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dipstick's picture
dipstick
Status: Member (Offline)
Joined: Nov 7 2009
Posts: 1
stock exchange demutualization

I have been on a quest for about 2.5 years to try to better understand the world I live in and it has been quite a daunting undertaking (albeit very rewarding). I am trying to discover the real powers that be and their general agenda (conspiratorial I know). Anyway, to that end I discovered an interesting tidbit that I have never seen discussed on either this site or the myriad others I visit on a daily basis. We all know about the Graham, Leach, Blily Act and the commodity futures modernization act as well as the Goldman Sachs involvement in everything seemingly evil. HOWEVER, I recently learned about a trend known as "stock exchange demutualization" that has been spreading around the world since about 2000. Basically this is a trend of stock exchanges shifting from member owned non profit quasi governmental organizations to for profit share holder institutions. There have been real concerns over this structure due to the tension between maximizing profits and protecting investors (I can expect which motive will win out). Here is an interesting timeline, though very brief and incomplete. March 8, 2006 NYSE becomes a DEMUTUALIZED ENTITY (shareholder for profit) which then allows them to purchase Euronext without SEC oversight (their was an SEC speech given 2 days after the demutualization that stated as much though I don't understand the particulars). Euronext was formed on September 22, 2000 with the merger of the Amsterdam, Brussels, and Paris exchanges. Then in 2002 Euronext purchased the London international futures and options exchange. April 4, 2007 the NYSE merged with Euronext. It is the stated purpose of combining these exchanges by John Thain (1st CEO of NYSE Euronext) to allow investors much easier access to companies not in their home country (I am not an investor so my knowledge is very limited about the day to day practical side of all this). Additionally it gives him access to a huge derivitaves market. Obviously, this also gives foreigners easier access to our markets. So up to this point we have a derivatives market that is app 700 trillion in size (as compared to app 38 trillion for all worldwide stock exchanges) completely unregulated and on top of that we now have most exchanges themselves set up in a questionable structure for protecting the investor. Back to the timeline- two months after the merger, it is decided to do away with the uptick rule (July 3rd, 2007). It seems to me that at this point, everything that could be done to steal trillions of dollars from unsuspecting individuals was put in place. 6 months later the crash begins. We know that wealth doesn't really disapear, it's just transferred. I believe it is the huge hedge fund managers (and wealthiest people in the world as customers) that have been calling most of the shots (George Soros). Here is an important sidebar to the NYSE Euronext merger that I want to include and then on to my real question. Speaking of powerful hefge funds-the merger of the largest stock exchange in the world bar none was directed by two powerful hedge funds. They were Atticus and TCI. Atticus controlled a 6% share of the NYSE and a 9% share of Euronext and TCI controlled a 10% sharre in both Euronext and Deutsche bourse (German exchange competeing for the merger with the NYSE). These hedge funds were apparently so powerful that they not only decided the outcome but also got rid of Werner Seifert (the then head of the Deutche exchange). Here is where the conspiracy part comes in for me. One of the two equal partners in Atticus was none other than Nathanial Rothschild and his father came in as temporary controller to facilitate the merger. I am sure everyone here is familiar with the history of the Rothschilds (Their dabbling in world affairs for over 300 years).

Before my question, some additional pertinent information so you know where I am coming from (I am a peak oiler).

1998 colin campbell and jean laherrer publish "the end of cheap oil" in the scientific american journal.

1999 the Graham, Leach Bliely Act

1999 European union completes formation and issues the Euro

2000 Commodity futures modernization act and beginning of worldwide stock exchange demutualization

2001 Dick Cheney big secretive energy taskforce

2001 Shanghai five becomes the shanghai cooperation organization

2002 gulf cooperation council begins plans for common currency to be inplemented by 2010.

SO HERE IT IS. Specifically, what do you think about the stock exchange demutualization and its role in the crash. And generally, Am I crazy to see a bigger pattern here between a worldwide economic system dependent on limitless natural resources that are likely now or soon to be in decline and what appears to be groups coallescing (european union, SCO, GCC, and the rumored North American Union) possibly for the ecomomic benefits (economy of scale) and resource sharing. If you believe this is possible, is there competition among divergent parts of the world or do you think there is cooperation at the highest levels worldwide (Rothschilds directing stock exchange mergers, etc). Lastly, do you believe the economic crash was engineered (seems almost impossible to believe otherwise looking at the timeline) in order to concentrate wealth and power for the ultimate control of the limited resources and the populations reliant on it. 

ps

be gentle

goes211's picture
goes211
Status: Diamond Member (Offline)
Joined: Aug 18 2008
Posts: 1114
Re: stock exchange demutualization

I have been involved in the financial markets for almost 20 years and I don't think that exchange demutualization had anything to do with the crash.  The primary reason for exchange demutualization was so that the exchanges could change their structures easier.  The reason this was necessary, especially in the US, is that changing technology is going to eventually cause floor based trading to go the way of the dinosaur.  I have seen this happen to several european (LIFFE,Amsterdam Stock,...) exchanges and it will eventually happen here.

An exchange that remains a closed club owned by its members will resist change until it is too late.  You must understand that the exchanges value is primarily based opon the liquidity that it provides, and that liquidity could be easily taken if a competitor rolls out a new electronic exchange with significantly cheaper operating costs.  This has been already happend in europe and has been happening slowly for years with the ECN's.  Closed exchanges, especially ones like the Chicago derivatives exchnages (CBOE,CBOT,CME) were largely controlled by a large number of locals.  These guys are very old school and will never be able to trade behind a screen and therefore will RESIST ANY CHANGE because their lively hood depends upon it.  By demutualization, locals can actually profit from the exchanges change from floor to electonic and therefore will be less likely to resist the change.

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