Nine domestic banks are planning a new stock exchange…(cue the creepy music).

In my view, it’s the biggest piece of economic news since the great recession changed banking rules forever: 9 banks and brokerage house have decided to band together to form their own stock exchange as direct competition to the NYSE and NASDAQ who, these 9 institutions claim, are deliberately inflating the price of giving direct, real time access to the data on stock trades.
For what are obvious reasons, the event wasn’t loudly broadcast in the media. In, only domestic stories seemed to appear in the American press (as of this publishing).
MEMX formed because they say fees by the NYSE and Nasdaq are too high, and so now they want to compete.
I like competition. Competition is good. But this isn’t competition.
Once you learn who these 9 entities are, this seems little more than making sure the banking cartels keep it all in house, just in case another economic collapse happens. Sure, that may sound conspiratorial or tin foil hat-ish, but an honest objective view of how the banking industry works exposes more than one important similarity between how they do business, and how a drug cartel does business in how they view and control their markets place-as people dependent on them.
Because we are, if we are to do business in currency or want to invest our money in any type of way that is meant it to produce wealth…

Morgan Stanley, Charles Schwab, Merrill Lynch, Bank of America, E-Trade, Fidelity Investments, Citadel, TD Ameritrade, and UBS have combined to form MEMX-Members Exchange.

Morgan Stanley, Charles Schwab, Merrill Lynch, Bank of America, E-Trade, Fidelity Investments, Citadel, TD Ameritrade, and UBS have combined to form MEMX-Members Exchange.

According to an issued press release, “MEMX’s mission is to increase competition, improve operational transparency, further reduce fixed costs, and simplify the execution of equity trading in the U.S. In addition, MEMX will represent the interests of its founders’ collective client base, comprised of retail and institutional investors on U.S. market structure issues. MEMX will seek to offer a simple trading model with basic order types, the latest technology, and a simple, low-cost fee structure.”

Besides the overly-exclusive implying name of Members Exchange, 4 are also a part of what are called “the big 5 brokerages” on Wallstreet: Charles Schwab, Fidelity Investments, E-Trade, and TD Ameritrade. Combined, these 4 entities control almost a third of what Barron’s estimates to be a $30T US market cap (in early 2018).
Depending on the day, Bank of America is the largest bank in the USA, in terms of assets, and UBS is the largest Swedish bank in the world by every measurement.
On its face, this group screams conspiracy and I’m sure many a conspiracy theory about this collaborative effort, by arguably the most powerful banking conglomerate ever formed, will come out in the coming weeks. So overt is the economic clout of this group of institutions, that it is impossible to avoid the idea of there not being a conspiracy.
But conspiracies I wont touch, my concern is the objective reality that a third of all investments in our country are now going to have some part of their valuations determined by one entity.

 

The mission statement, released in a press release announcing their intent to file for exchange status with the SEC, makes the effort sound like one meant to make investing easier and more simple, but objectively speaking little good has ever come from any group that includes the worlds most powerful, or influential of anything, coming to together for one purpose (I will spare the history lesson).
Especially when it comes to your personal money.
If this were a group of mid cap stocks, or start ups, looking to combine their strength as leverage against these established titans of our banking and investing industries, I would be all for this idea. But these are a bunch of mid sized companies: these are industry titans. Leaders; and now that they have combined under the pretext of providing “more competition”, the idea of a ground up entity ever having the chance to compete in the banking sector of our economy is all but gone.
I will again spare the long winded history lessons about concepts just like this, which in the long term result in consolidating power, while creating a wider gap in wealth between the ‘have’s’ and ‘have nots’-whether it be power or just money…
This is one that I think we should all be keeping an eye on.