Financial markets, stock markets especially, appear able to defy gravity despite the global geopolitical and economic situation. A plethora of institutional and individual explanations have been offered as to why, but most seem to miss the point.

Which is, at least in part, that we have created a kind of monster in the asset management industry, which channels a glut of global savings into a limited number of investment areas and which, by virtue of these captive inflows, is able to maintain...