Re: "virtually zero" How are Morgan Stanley counting?
technoise,
Markets are often helped by speculators. Some do need them. This is because you need liquidity in order to make a market. This for example is what killed the banks in the 2008 crash. They had assets that were worth lots of money, those mortgage backed securities, but because nobody had any faith in how they'd been packaged nobody would buy them at any price. The banks had to apply market value to them (which was basically zero), and suddenly the banks were looking insolvent. Now obviously this is an example of how you need proper regulation, but it's also an example of why markets need liquidity to work.
Take for example the futures market. I am Farmer Giles. My wheat will be harvested in 3 months. Do I want to risk there being a bumper crop from everyone, so I don't get a good enough price and go bust? Or do I want to hang on for the reward of a bad harvest, where my wheat is suddenly worth loads and I can afford extra beer and hookers? Or do farmers have groupies? Tractor tarts perhaps?
Anyway that's what the futures market is for. I can sell my wheat now - and get a predictable return which means I don't risk going bankrupt in 3 months. Meanwhile a bread company might want to secure guaranteed prices for the next few months, so they can do a deal to sell to a supermarket on a fixed price contract - thus losing the ability to react to changing wheat prices.
But often the two sides of futures transactions don't balance. So everyone benefits from some speculators coming along. They're risking their (or their clients') money to make a profit. Booo! But actually this is good. Both the baker and the farmer don't care about making huge profits, what they want is steady, predictable ones. So they're willing to give up some potential profit for certainty. But the speculator needs risk in order to grow the investment. So in this case, everyone can be a winner.
This is why markets work. Sure they sometimes fail, but the point here is that everyone is getting some of what they want.
This is (or at least was) a fundamental problem with Bitcoin. I looked a couple of years back, and the Bitcoin daily turnover was laughably small. It was so illiquid, that someone selling a bitcoin ($400-odd at the time) could change the global price by a couple of dollars! That's high volatility in an investment asset. But in something claiming to be an alternative currency, it's laughably pathetic.