The Financialization of America: A Wee Example


Once a month, at 10 am, the University of Michigan releases its consumer confidence index. But not everyone gets it at the same time. Thomson Reuters pays Michigan a million dollars a year for early access:

Five minutes before that, at 9:55 a.m., the data is distributed on a conference call for Thomson Reuters’ paying clients, who are given certain headline numbers.

But the contract carves out an even more elite group of clients, who subscribe to the “ultra-low latency distribution platform,” or high-speed data feed, offered by Thomson Reuters. Those most elite clients receive the information in a specialized format tailor-made for computer-driven algorithmic trading at 9:54:58.000, according to the terms of the contract. On occasion, they could get the data even earlier—the contract allows for a plus or minus 500 milliseconds margin of error.

Read the whole story for more, but in the meantime just sit back and be amazed at how high-speed trading has changed things. Getting early access to economic information has been important for centuries, and people have always been willing to pay for that early access. In the past, though, getting early access has always required either putting in extra work—for example, paying lookouts for early reports of ships coming into port—or else outright fraud—think Trading Places. But not anymore! This isn’t exactly something that either Michigan or Reuters advertises, but now you just have to pay a fee in order to guarantee that you can take all the ordinary schlubs to the cleaners.

This is a small example of the financialization of America that I posted about yesterday. It has no possible social value, and it doesn’t make credit markets more efficient in any way. It’s just a purely artificial way for the rich to hoover up economic rents, and it’s fully institutionalized and above board. Lovely, isn’t it?

MORE HARD-HITTING JOURNALISM

In 2014, before Donald Trump announced his run for president, we knew we had to do something different to address the fundamental challenge facing journalism: how hard-hitting reporting that can hold the powerful accountable can survive as the bottom falls out of the news business.

Being a nonprofit, we started planning The Moment for Mother Jones, a special campaign to raise $25 million for key investments to make Mother Jones the strongest watchdog it can be. Five years later, readers have stepped up and contributed an astonishing $23 million in gifts and future pledges. This is an incredible statement from the Mother Jones community in the face of huge threats—both economic and political—against the free press.

Read more about The Moment and see what we've been able to accomplish thanks to readers' incredible generosity so far, and please join them today. Your gift will be matched dollar for dollar, up to $500,000 total, during this critical moment for journalism.

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate

We have a new comment system! We are now using Coral, from Vox Media, for comments on all new articles. We'd love your feedback.