From 'Who Needs Wall Street': Brokers recite, endlessly, that trading is vital because, without it, there wouldn’t be a way for shareholders to exit, thus investors would fear to commit capital in the first place. Within limits, this is true. Thus, at modest levels, the willingness of traders to buy and sell from the rest of us gooses confidence. But the value of such “liquidity” has been vastly oversold. The notion that ever more trading makes for successively better markets is one of Wall Street’s great myths. People think liquidity will keep markets stable, but the crisis of 2008 says otherwise. In a crisis, liquidity disappears. Modern markets are more likely afflicted with too much trading. Think of oil and its dizzying fluctuations. As the volume from speculators and momentum traders dwarfs that of long-term investors, prices gyrate further from fundamental value. Raising capital thus becomes, to paraphrase John Maynard Keynes, the byproduct of a casino.