“The behavior of financial markets these days is frankly divorced from reality, with value-investing banished .. Markets have become distorted by Rumsfeld-knowns such as interest rate policy and ‘market guidance’, and Rumsfeld-unknowns such as undeclared market intervention by the authorities. On top of these distortions there is remote investing by computers programmed with algorithms and high-frequency traders, unable to make human value-assessments .. The reality is that there is intervention across a range of markets; but most of the mispricing is in the hands of private, not government investors .. We can fret about who is actually responsible for market distortions, instead we should ask who benefits:
Governments: in the past they have covered their debts through a process dubbed financial repression, when artificially low interest rates and bond yields were the principal mechanism whereby wealth is transferred from savers to the government. This process still goes on today.
Zero interest rate policy: lays the process bare, and turns savers into borrowers.
Investment and hedge funds: invest together with the banks which take our deposits & speculate on our behalf. They think that with a Yellen or Draghi ‘put’ underwriting markets a ten-year government bond with a two per cent yield is an attractive investment. In doing so they are transferring financial resources to governments in a variation on old-fashioned financial repression.”

– Alasdair Macleod