ETFs And a Phantom Market – How The ETF Industry is Changing
Wall Street  While the rest of the world is piling their cash
into ETFs I begin to wonder what kind of effect this might have
on the market just a few years from now. Think back to 1992,
when the housing market was plummeting and the Asian Financial
crisis was reaching its peak. The Asian bust was largely the
result of huge derivatives holdings, and what are ETFs? Nothing
but derivatives.  I have to wonder where the ETF scene will take
the stock market. At present you can buy into hundreds of
sectors, commodities and even indices.  But with many of these
ETFs you never truly own what you think you do. Usually your
money is thrown into a basket, complete with futures and other
complex instruments meant to artificially replicate the returns
of hard assets. But to do so is nearly impossible and no one on
the planet can perfect natural volatility.  Look at the most
popular ETFs on Wall Street right now. They’re precious metal
ETFs, iShares Silver Trust