The Age of Post-Rationality by Val Colic-Peisker & Adrian Flitney

Author:Val Colic-Peisker & Adrian Flitney
Language: eng
Format: epub
Publisher: Springer Singapore, Singapore

The vast majority of money trading today is done by speculators who follow a trend or bet against it, trying to outdo one another and pull money out of the market and into their bank accounts, or that of their clients. Even without understanding the financial markets’ intricate numbers games, most people choose to believe that simply shifting money around creates more of it. Such a claim is rationally unsustainable, but the faith persists because the evidence seems to be there: some people ‘made millions’ on the stock market . However, some others went bankrupt as a consequence: no niceties, no mercy and no mutual benefit at a stock exchange!

Trading in shares used to be done by specialists in purpose-designed venues. Shareholders had to talk to their broker about placing an order to buy or sell shares. The late-1990s advent of computerised stock exchanges has enabled people to trade from the comfort of their home computer and, more recently, their smartphone. With computerisation of financial markets, the volume of speculative trades has increased dramatically: the value of shares traded daily on the world stock market s now exceeds the value of goods and services exchanged in the real economy (Fig. 5.2).

Fig. 5.2The value of traded stocks on a selection of major stock market s relative to the GDP

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