[vox_mundi]

When companies in the same industry have common owners, consumers pay
http://phys.org/news/2014-10-companies- ... umers.html

If you owned two companies in the same industry, would you make them compete? Probably not, knowing the firms make higher profits if they don't.

Institutional investors such as BlackRock, Fidelity and Vanguard hold nearly 80 percent of the shares of public companies in the U.S. as they put 401(k)s and other private investments to work.

That's good for investors, but it might be bad for consumers and the economy as a whole, according to Martin Schmalz, assistant professor of finance at U-M's Ross School of Business. Natural competitors in many industries have nearly identical top shareholders, including Apple and Microsoft, CVS and Walgreens, and the largest three U.S. banks.

To determine if such common ownership has an effect on consumer prices, Schmalz and José Azar and Isabel Tecu of Charles River Associates, a Boston-based consulting firm, analyzed how airline ticket prices depend on who owns the airlines.

They found that prices on routes that become dominated by airlines with common shareholders are higher than when airlines are owned by different shareholders. On the average U.S. route, consumers pay 5 percent higher prices, and passenger volume is 6 percent lower than would be the case without common ownership.

"Antitrust law is focused on whether company A or company B merge," Schmalz said. "But when they have the same shareholders, it might not matter much because they're almost the same company anyway, just with a different name."

They're playing the consumer like a drum.

Anti-Competitive Effects of Common Ownership Report Download: http://papers.ssrn.com/sol3/papers.cfm? ... id=2427345

[basil_hayden]

Guess who benefits greatly from a lack of Keystone pipeline through Nebraska?

The Oracle of Omaha himself, Warren Buffet. His railroads make money coming and going, along with all the other entities his company owns with their hands in consumer's pockets. Exactly how much does this clown need from every man woman and child each year? Profitable - sure you are when you overcharge to "competitive market rates".

[ROCKMAN]

Basil - A very valid point IMHO. But a correction: "Guess who benefits greatly from a lack of Keystone pipeline through Nebraska?" Actually the Keystone Pipeline, with a 600,000 bopd capacity, has been moving Canadian oil sands production cross Nebraska since last January. The Keystone Pipeline has been moving oil across the border since Oct 2010. It's the Keystone XL Pipeline that's been waiting for the border crossing permit. Not entirely sure but I think most of the oil that Warren's cho cho's are moving don't have pipelines in direct competition with him.

But you are certainly correct: the big funds have huge leverage on the boards of the companies in which they control stock.