A Historical Measure of Financial Predation in the U.S. Market

Abstract

This article, theoretical in essence, complements two previous articles published in The Journal of Wealth Management (JWM) regarding the Consolidated Model of Financial Predation (CMFP). It expands further on the role of information and discusses in particular the key characteristics of a dynamic financial system: such a system engages two rival investors, each aiming at maximizing his financial gains. The author looks at financial predation in terms of asymmetry of information serving the egoistic goals of a few (predators). A U.S. historical predatory index (HPI) is developed and a vision of the future is proposed.