Let the (small) circle (of insiders) be unbroken...
From the SchNews desk | 10.10.2009 08:40 | Analysis | Globalisation
A pair of physicists at the Swiss Federal Institute of Technology in Zurich did a physics-based analysis of the world economy as it looked in early 2007. Stefano Battiston and James Glattfelder extracted the information from the tangled yarn that links 24,877 stocks and 106,141 shareholding entities in 48 countries, revealing what they called the "backbone" of each country's financial market. These backbones represented the owners of 80 percent of a country's market capital, yet consisted of remarkably few shareholders.
Two physicists in Zurich claim to have worked out exactly who the global super elite really are. Stefano Battiston and James Glattfelder undertook a complex analysis of the world’s financial markets as they were in 2007, covering 48 of the richest economies. They worked through the tangled web of stock purchases, company ownership and indebtedness to major banks and venture capitalists and the like to ascertain where they’d end up if they kept ‘followin’ da money’ – what they call the “backbone” of the economy.
Glattfelder was quoted as saying: “You start off with these huge national networks that are really big, quite dense. From that you’re able to ... unveil the important structure in this original big network. You then realize most of the network isn’t at all important.”
Their methodology accounted for secondary ownership - owning stock in companies who then own stock in another company - in an attempt to quantify the potential control or influence a given enitity might be able to exert on a market.
They define “backbones” as being whoever own 80% of a country’s market capital and, amazingly (shock, horror, surprise), they consisted of shockingly few big fish shareholders.
And fewest of all were found in (...wait for it) the US, UK and Australia.
They were apparently surprised that their findings ‘unconvered’ that nearly everything is really owned by a few super powerful hedge fund owner types. The biggest they identified was US-based Capital Group Companies – with a trillion dollars under their control they’ve got their fingers in all the major pies in 36 of the 48 countries surveyed. Fidelity Investments is another in the trilllion dollar club. Between them they own sizable chunks of nealry every big UK corporate. Their PR is not existent – the message to enquiring journalists: “I’m sorry, but we do not discuss our holdings, our philosophies or our strategies.” But at least we know who they are now.
The top 10 include:
1. The Capital Group Companies
2. Fidelity Management & Research
3. Barclays PLC
4. Franklin Resources
5. AXA
6. JPMorgan Chase & Co
7. Dimensional Fund Advisors
8. Merrill Lynch & Co
9. Wellington Management Company
10. UBS
The pdf write up of this research can be found here:
http://arxiv.org/PS_cache/arxiv/pdf/0902/0902.0878v1.pdf
Glattfelder was quoted as saying: “You start off with these huge national networks that are really big, quite dense. From that you’re able to ... unveil the important structure in this original big network. You then realize most of the network isn’t at all important.”
Their methodology accounted for secondary ownership - owning stock in companies who then own stock in another company - in an attempt to quantify the potential control or influence a given enitity might be able to exert on a market.
They define “backbones” as being whoever own 80% of a country’s market capital and, amazingly (shock, horror, surprise), they consisted of shockingly few big fish shareholders.
And fewest of all were found in (...wait for it) the US, UK and Australia.
They were apparently surprised that their findings ‘unconvered’ that nearly everything is really owned by a few super powerful hedge fund owner types. The biggest they identified was US-based Capital Group Companies – with a trillion dollars under their control they’ve got their fingers in all the major pies in 36 of the 48 countries surveyed. Fidelity Investments is another in the trilllion dollar club. Between them they own sizable chunks of nealry every big UK corporate. Their PR is not existent – the message to enquiring journalists: “I’m sorry, but we do not discuss our holdings, our philosophies or our strategies.” But at least we know who they are now.
The top 10 include:
1. The Capital Group Companies
2. Fidelity Management & Research
3. Barclays PLC
4. Franklin Resources
5. AXA
6. JPMorgan Chase & Co
7. Dimensional Fund Advisors
8. Merrill Lynch & Co
9. Wellington Management Company
10. UBS
The pdf write up of this research can be found here:
http://arxiv.org/PS_cache/arxiv/pdf/0902/0902.0878v1.pdf
From the SchNews desk