Investment Capital in the Digital Age

In the wake of Wikileaks and the financial meltdown of 2008-2009, we're also continuing to learn more about the nature of Capitalism in the digital age.

In many ways the changes are so broad that it must be questioned if some of the typical paradigm-arguments for Capitalism are still applicable. The arguments that try and suggest the Free Market is simply consumers 'voting' with their dollars is no longer applicable, and hasn't been for quite some time.

Today, we're dealing with stock and currency markets, global trade, exchange rates, media influence and very complicated derivatives and insurance products.

But the digital age has moved things to another level. Today the trading of stocks has little to do with company values or perceived value. Often there's a high-speed semi-automated game going on where massive quantities of funds are moved about in an intense game that can make millions in one moment, and bring down an unprotected company the next. Companies are paying millions of dollars to gain a nano-second edge on their competitors.

The ramifications of High Frequency Trading and the whole cyber-trade paradigm that goes with it are too numerous to consider in one article. In fact I think it is probably too soon to appreciate the full spectrum of influence.

These trading enterprises are utilizing the half-second advantages to intervene in posted purchases and sales. Through intervention they can grab up stocks at a preferred price, hold them for less than a second and sell them to someone who put a purchase or sale bid into the cyber market. The profits per stock or product are often small but done in large quantities. In the process by 'skimming' pennies on a grand scale they manipulate the market and make millions of dollars.

Sometimes the people on the other end are left baffled as the end price ends up being slightly higher than what they thought they were purchasing it for. The High Frequency Traders intercepted their 'buy' order, purchased the stock, raised the price and sold it in response to their 'buy' request in the blink of an eye.

Investors are squeezed and maneuvered and their funds are effectively robbed.  In some cases Investment Bankers are knowingly pushing deals that subject investments to these and other exploitative schemes. They are after profits, not your best interests.

Caveat Emptor is their motto. Let the buyer beware. They're not even shy about this. Executives at Goldman Sachs have admitted this openly, and internal documents and evidence demonstrate that they're not overly concerned with their investors and customers. In fact they speak of them derisively and are laughing at them. It's a dog-eat-dog world. Of course they're big enough that they can function this way with impunity.

My own father died a bitter man and his frustration was in part due to the fact that he had functioned under the same rules, the same ethic that the Wall Street Bankers operate by. He didn't set out to break the law and for the most did not but his ethics were certainly pretty shady by the standards of most people. Caveat Emptor was his motto. He was convinced that people were both greedy and lazy. He would offer deals to people and dazzled by the prospects they would take the deal without exercising due diligence and examining his claims. He didn't coerce them. He banked on the fact that their greed and haste would get the best of them. And it did.

He didn't force them or even have to work very hard to make the sale. Their problem was they trusted him. Ultimately his investments collapsed, he basically gambled their money away through investing, and he ran into trouble. And yet his practices were essentially no different from the Wall Street tycoons who were bailed out using taxpayer funds when their deals went south. For my father, he went to jail. His bitterness stemmed from the fact that he was ever after a felon while the bankers and hucksters from Wall Street come out on top or in a worst case scenario bail out via golden parachute. They still hold their heads high and look down their noses at everyone else. Because he wasn't enough of a 'Big Shot' he had to pay the price for his deeds.

He deserved it. Interestingly after he got out and went through yet another quasi-conversion experience, he wanted to completely avoid the world of investments and sales. He didn't feel like ethically he could pursue those fields anymore. It wasn't about temptation. It was the work itself. When he came into contact with many Christian Churches he was horrified to discover that so many of the methods (which he then rightly viewed as ethically dubious) were being used by Churches in Evangelism techniques and in how they approached various ministries etc... It was very disappointing to him. He was pretty disillusioned on all fronts.

Listening to an interview with Michael Lewis I was struck how he said that when he left Wall Street in the 1980's and upon revealing that he was going to write about how it all worked, his bosses just shook their heads. He was a fool because journalism would never pay like the financial sector.

Today, people within the industry can't make those types of exits. People in the financial sector (and many industries) are forced to sign non-disclosure statements and are threatened by lawyers if they even begin to speak about what's going on.

At this point they don't want the investor class to grasp the nature of the market-game. The big banks and exchanges are making too much money and yet one wonders if there isn't even more to all of this.

We already know through Snowden and Wikileaks that the new paradigm consists of massive Hedge Funds and other investment groups with ties to the Intelligence Community. It's probably more accurate to say they are simply yet another arm of it. There are many top-ranking people on Wall Street and in Fortune 500 companies who are technically 'assets' to the Intel community. They feed information or in many cases take action when ordered to do so. Some are outright agents. The puzzle is vast and complicated and usually one element can only see a tiny portion of what's going on. Only those at the top can see the big picture.

After 9/11 it was revealed to a larger audience that the CIA tracks the stock market in real time. When you grasp the nature of the economy and the role it plays in terms of security in an age of Total War, you'll understand why. This information came out in connection with the obvious insider trading that was taking place just before 9/11. The airlines involved in the hijackings had some pretty interesting 'stuff' going on with their stocks on the day before. Someone, somewhere made some serious money by locking in sale prices the day before airline stocks took a tumble.

But I think their interests in real-time stock monitoring extend beyond security concerns.

The Intel Community is involved in these markets and certainly in High Frequency trades. For years we've known the CIA and presumably other secretive branches of the US Government possess not only open budgets but black or secret budgets appropriated by closed-door sessions of the relevant committees. However they also possess off-the-record, completely hidden budgets and sources of income. They raise this money for operations they don't want to reveal to Congress. This was part of what was so revealing about the Iran-Contra debacle. It exposed a hierarchy within the Intel Community, a cabal operating with its own budget and outside congressional oversight.

These High Speed transactions require a lot of technology and access and certainly some of these highly placed and connected people within the community would have the opportunity to raise huge amounts of hidden capital for the organization and their operations.

Of course these activities can also be used offensively. Stock values can be manipulated and companies can be quickly brought down, subjugated, destroyed or taken over. The Russian markets were looted of billions of dollars in the 1990's. I'm not sure if anyone knows the true extent. It was certainly American banks that were involved, but was it just banks? Given the wider scope of American foreign policy during this period does anyone believe the American Intelligence Community wasn't involved?

Again the recent revelations show just how intimate the government is with portions of the business sector. I wrote earlier about how the US was warning consumers against buying Chinese computer hardware because it might contain 'back doors' that Chinese hackers could utilize to steal personal or intellectual information. And yet, we're learning more all the time regarding American activities along these same lines. They are working with American companies to develop back doors and infiltrate overseas networks to aid the prospects of American business. If information is power, hacking everyone's information, including your friends is one way to master the world.

Since the Supreme Court has opened up the world of campaign financing the cost of elections has skyrocketed. Utilizing Super PACS and other mechanisms a lot of this money can be raised anonymously. This has created a whole new world of secret transactions, potential money laundering and when you consider the Intel Community's certain involvement in High Frequency Trading it must be asked will some of these PACS and Super-PACS benefit from this? Can skimming the investments and pension funds of millions of Americans be used to help fill the coffers of Hedge Funds which will now make multi-million dollar donations to Super PACS in 2014 and 2016? We wouldn't have a way to know. All the transparency has been eliminated by the Roberts Court.

Are these types of activities... offensive strikes against corporate and economic enemies, money laundering, black budgets... some of the reasons behind why the Intel Community is going so hard after journalists who dare to expose these networks and programmes?

As I consider this I think of all those people who misappropriate the parable of Talents and reckon it as some kind of Messianic investment advice, which of course I would argue that Jesus wasn't really talking about money at all. He was talking about the Kingdom. How many Christian individuals and organizations under the umbrella of 'Stewardship' are invested in this world of filth and deception? Is this what God had in mind, that we would make our money and show Christian responsibility and love for neighbour by investing our funds in this kind of system?

I'm not even speaking about the nature of these companies and what they do around the world, their manipulative science and advertising, not to mention the way they exploit resources and harm people. There are all of those issues to be considered.

Here I am only speaking of the nature of the Market itself and the system by which it operates. Aside from all the issues regarding the creation of capital through the manipulation of the Market, there are all the shady mechanisms by which it operates. In principle the stock market is not 'technically' gambling but investing in companies and their products.

The reality is those who are invested in mutual funds have given their money to casino operators. They are utilizing everything from credit default swaps to the most outlandish derivatives. They're playing games with trade and technology and in many cases the investors are being tricked. They will continue to create fictitious capital for you. It's a game of musical chairs. Hopefully your money has been withdrawn before the music stops and you're found without a seat. If you're in that situation as many were in 2001 and 2008 then your original funds and certainly your 'created' funds will disappear and somewhere, someone is laughing at you. They'll play with your money, use it to make more money for themselves and maybe.... make you some or lose it. If they lose it, they're generally not too worried. They've got it covered.

I hope you do.

There are no applicable ethics to this system. It is neither legitimate 'work' nor is it loving your neighbour. It's a scheme, a scam, a rip-off. When you gain then someone else has suffered as a result. If you make out, you were (even without your knowledge) part of scam that hurt someone else.

I cannot fathom that investing income and/or making it through these means can be validly considered a form of legitimate Christian Stewardship.