In the book Dark Pools – High Speed Traders, AI Bandits, and the Threat to the Global Financial System by Scott Patterson, Crown Publishing, NY, 2012, Mr. Patterson discusses the rise of high speed traders, artificial intelligence bandits and the global financial system.

Mr.Patterson’s discusses the reason why the small companies were working to defeat the existing system. In a nutshell, it was unfair. In reality, the stock exchange process was heavily tilted towards a particular part of society and since salaries and work were above the normal, it was a closed society. The work was not, but to get in and be part of it was. When a sector, any profitable sector, is seen as unfair, people will be looking for alternatives. With the rise of the Internet, the ability to find alternatives through the loopholes has quickly risen and although it may take a number of years before they cross into mainstream, it is possible. Then the outsiders will become the part of the insiders and want to protect their turf. The reason the origin outsiders were looking to change the stock exchange methods of operation was, in their core (the fire in the belly), they saw the exchanges as being extremely unfair. The exchanges said they were for competition, just not competition against them.

Linking to dividend paying stocks, often the best dividend paying stocks have some sort of monopoly which helps ensure they can pay dividends on a regular basis. On some stages, there will be people trying to find alternatives so customers can either have better service and /or better prices, it also helps if money can be made. The management of the dividend paying companies has to balance making consistent money and ensuring the mainstream is reasonably happy with the choices or the public must feel they have reasonable competition. When the balance is out of order, true competition and the government will change the market landscape.

There are more questions than answers, till the next time – to asking questions