News 3D network diagram representing distribution of entire U.S. stock market

[SolidGold]

Hello,

I read an article about a year or two ago and I cannot remember in what magazine I read it, so I was hoping to generate some leads by reaching out. I want to find it because my professor wants to see it as well.

The article was about a team or group of physicists, at a certain university, that tracked the entire U.S. stock market money flow as it exchanged hands. The article said that in the end, after it goes through all these other hands, eventually about 70 percent or 73 percent or more of the money eventually was distributed between about 120 bank accounts across the world. It may have been 175 bank accounts, or maybe less, I don't know the exact details but it was certainly less than 200 bank accounts.

It showed various pictures of a 3D model that looked like a network diagram, and it showed the direction of the money and how it eventually all converged to be distributed among these few. Has anyone else read this article? I tried searching discover magazine and scientific american and google, and I can't get the right keywords to find anything close.

The funny thing is, about a year ago I ran into the article on the internet by accident. Now I cannot find it.

 

[talk2glenn]

It is true that between 80 and 90% of investment capital is owned, directly or indirectly, by the top 10% of US households. However, I'm not sure that this is what you're talking about. "Money" doesn't flow into individual bank accounts. Depositor accounts represent a claim on some financial institution for some amount of money; there's no box in a vault holding the balance of your checking account in trust. You just have the right to claim up to that much at will from your bank.

Money flows between banks to meet daily demand. It is plausible, then, that 70% of the worlds mobile dollars would end the day at between 175 institutions. Frankly, I'd be surprised if it wasn't smaller. How many major players are there in global finance? This does not mean, though, that these banks hold or control 70% of the worlds wealth.

For perspective, the largest stock exchange in the United States and the world is the NYSE. It has a market capitalization of $13.4T and a daily volume of approximately $150B. Shares of stocks traded on the NYSE are owned by approximatly 57M households in the United States alone. There is no possible way 70% of this wealth is in just 175 accounts, worldwide. There are approximately 115 million households in the US alone, so the top 10% would be approximately 11.5 million, and each of these households likely holds wealth in numerous individual accounts with several institutions.

On the other hand, the dollar monetary base is just $2T, while M1 (the money in circulation) is only about $1.3T.

 

[mugaliens]

Interesting...