The FT's Martin Wolf Shoots the 'Naturally Efficient Markets' Hypothesis in the Head

In the absence of effective regulatory oversight and objective restraint, the financial insiders rigged the market, not incidentally, but systemically and flagrantly over a long period of time.Market manipulation is no obscure theory, not some secular transgression committed on the periphery by rogue traders, but a pervasive feature of the Anglo-American banking system that stubbornly resists reform through the accumulated power of a credibility trap.... 

A credibilty trap is a situation where the regulatory, political and informational functions of a society have been thoroughly taken in by a corrupting influence and a fraud so that one cannot even begin to discuss the situation honestly without implicating, at least incidentally, a broad swath of the power structure and the status quo who at least tolerated it, if not profited directly from it. Who will reform the reformers?....

...change is hard to do. And we have several decades of the free-market follies running at a higher tide then normal now, with the utopian notion that we must knock down or cripple all the laws regulating the markets in order to be free. Free of the government, but naked and defenseless against private rapaciousness and the organized plunder of increasingly powerful supra-national corporations...

Martin Wolf: "My interpretation of the Libor scandal is the obvious one: banks, as presently constituted and managed, cannot be trusted to perform any publicly important function, against the perceived interests of their staff. Today’s banks represent the incarnation of profit-seeking behaviour taken to its logical limits, in which the only question asked by senior staff is not what is their duty or their responsibility, but what can they get away with....It is difficult to know how to restore not just the reality, but the perception, of trustworthiness, to this industry. But part of the answer must be a separation of the self-interested trading culture of today’s investment banking from the service-oriented culture of old-fashioned commercial banking.... "
                                      ............................ JessesCrossRoadsCafe