http://www.nytimes.com/2011/02/14/opinion/14Salmon.html?hp
The major role of the stock market is to allocate capital to its most productive uses. It does that when innovative companies raise money selling ownership of its business to the public with an IPO. Most of what happens in the stock market today, according to Salmon, consists of speculation about the potential rise or fall of the prices of the shares of mature companies. This enables investors to own a pieces of the corporate pie but it is a shrinking piece since there are fewer companies listed on the stock exchanges as IPO's decline and public companies go private. According to Salomon the money on Wall Street is being made by designing and selling credit derivatives and betting on the direction that they will take. Small investors don't participate in this market or in the sale of public companies to private investors.
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