Yes Virginia, ETF's Are Where True Price Discovery Happens, Not in the Underlying (There IS a Santa Claus, there IS)

"DEAR EDITOR: I am 8 years old.
"Some of my little friends say there is no Santa Claus.
"Papa says, 'If you see it in THE SUN it's so.'
"Please tell me the truth; is there a Santa Claus?

"VIRGINIA O'HANLON.
"115 WEST NINETY-FIFTH STREET."

VIRGINIA, your little friends are wrong. They have been affected by the skepticism of a skeptical age. They do not believe except they see. They think that nothing can be which is not comprehensible by their little minds. All minds, Virginia, whether they be men's or children's, are little. In this great universe of ours man is a mere insect, an ant, in his intellect, as compared with the boundless world about him, as measured by the intelligence capable of grasping the whole of truth and knowledge. [i.e. Blackrock, Barclays, State Street]

Yes, VIRGINIA, there is a Santa Claus. He exists as certainly as love and generosity and devotion exist...

From FT Alphaville:

Blackrock: ETFs are the true market

Interesting. Blackrock has issued an open letter in the spirit of investor
reeducation about its products, no doubt in response to the terrible reporting that’s been going on about its err… recent NAV discounts.

You can read the full open letter (complete with lots of bolding emphasis by Blackrock just to make sure you get the point) but a critical extract we think is the following (Blackrock’s emphasis).

The last few weeks have highlighted an underlying trend that merits broader public appreciation. More and more ETFs are becoming the true market, particularly when market sentiment shifts fast. ETFs are increasingly becoming the place where investors of all sizes can see the market price for a given investment exposure, and act on what’s really happening now in the markets....MUCH MORE

I had a three word preface to "FT: "ETF Losses Today Were Far Beyond What The Most Sophisticated Risk Models Could Have Predicated" (BLK)":
What....the....hell?

Which was followed by:
BIS: "Market structures and systemic risks of exchange-traded funds"
There is a potentially big problem here....

That's me, economical with the verbiage.

Here's the New York Sun's Sept. 21, 1897 editorial.