For centuries business evolved looking to standardize itself. From the creation of currency trading in Northern Europe to Holland's stock markets in the 1600s to the birth of farm future contracts in Chicago.
Non-standard contracts make news when they are profitable like selling mortgages to the Amish or micro-finance.
And nowadays, the powerful machine of marketing and branding seems to override general accepted Truths built over centuries.
Customized contracts that have left clients and whole municipalities bankrupt have been the norm. The word liquidity was deleted as consideration when packaging the sale for special clients who deserved one on one undivided attention but end up buying sure losses.
It is like a plague of unlearning has hit the world in the last 10 years. All the sudden automated trading has been a middle man in the transactions even on the trading platforms that advertised it differently.
And now, even traders are blindsided because every party believes they are the other. They believe they are outside the system. This is a belief that has been built on the moment of sale. A believe that every buyer or seller is part of the inner circle; therefore, standardization doesn't apply to them.
And...the system is believing their own pitch by allowing this sense of insider grouping. Regulation can't rewire the system.
We are again on a cycle propelled by the networks. And no government or agency can track these "specialties."
The one-hour walk out of traders in Chicago is a sign that the system is contradictory. A customized large trade bypassed the trading floor without even posting prices. Either traders and real capitalism are a sign of the past, or the system is completely forgetting why it was built.
