There are some unavoidable outcomes of waking up to the specter of Big Brother. Our markets require the free, unimpeded flow of information to all participants.
The basic problem in a capitalistic society when you allow some to gain access to information that others do not have is that you destroy the market.
I won't spend time here in explaining the technology. Read my other posts, or those all over DKos today.
While you can hide the fact that you have access to the ticker or the track results before the public for a while, inevitably you are discovered and the validity of the entire system is called into question.
Even more unsettling is simply the impact of direct observation on market makers and participants. Where you go, who you are there with, how long you spend there, who you call, when you call them, who they call and who they call.
I've had a couple of weeks to digest what it means to REALLY KNOW that I have no privacy. That YOU have no privacy. That NO CORPORATION on Earth has privacy. That NO GOVERNMENT on Earth has privacy. I've seen many blank stares when I try to explain the implications to others. I've put my wife to sleep on many commutes in the past several weeks. And I wonder at times if I'm just lost in another delusion, inspired by too little sleep and too much stress.
And then I see gold over $700. And the NYSE drop 200 today. The NASDAQ drop 33. Well off the recent highs and in short order. Telecom is down 5-7% and this has just begun.
Is it just short term moneymaking? Is it uncomfortability with the real estate market? Iran? Oil? Frankly I don't think so. I think the markets are incredibly resilient to "almost" everything.
Except compromising the flow of information.
Simply put, the technologies in use today by our government allow very deep access to information, nearly at will. If our laws don't permit it, the data is merely routed via off-shore loops where the laws do not apply. The CALEA implementations require hardware and software that can be operated remotely with minimal oversight and virtually NO checks and balances. I beg to differ with Senator Robertson. If you sir, can sign into a Narus 6400 and see the input specs and output specs for what is being monitored I'll believe you are competent to do oversight. Until then your investments are at risk in our markets.
That is what our markets are becoming aware of. And the ripple will be quite disturbing. It can't not be. Every market maker in NY is wondering about their phone calls. Every company with a secret design they don't want the Chinese to copy until they get it to market is wondering is it compromised. Every adulterer (60% of our population or some large number) is wondering whether they will be found out. The list of what we want or need to keep secret, personal or proprietary is endless. That is what makes capitalism and democracy great. The state doesn't know all, and doesn't manipulate it in their self interest. If you change this simple equation the markets will extract their toll until you stop. Democracy and Capitalism do work. You can't establish a permanent majority, or monopolies without the market taking you to task.
I'm sorry to be the bearer of bad tidings, but this is how capitalism works. Just ask an investor who jumped into Russian investments early.
And I thought Y2K might be a bad day... That was nothing compared to this. It's going to be a rough ride.