You don’t need to show a correlation. See Bouleau and Girsanov. Many financial markets are examples of positive martingales where the underlying signal is destroyed by the volatility (because the volatility is too large relative to the underlying signal). By permitting hedge funds to provide ‘liquidity’, in fact they merely increase the volatility above the threshold, thereby guaranteeing the failure of the fund. And the financial system. And everyone with a pension.

Said another way – has Mr. Martin shown a direct correlation between stock total return under performance and stock lending over the 20-40 year time horizon?

I was part of the “opposition” team of a dissertation provided by Jan-Pausl van Staalduinen at Technical University of Delft,The Netherlands. I would suggest to take his ideas into consideration for future game construction. The author will certainly send you a copy of his work, or you may address me:
guenter.koch@chello.at

Taking the occasion of this conversation: If we would not meet personally at the Peter Drucker Society Forum in Vienna in this coming week, I would like to inforam you a) that the Society via its President Richard Straub maintains intensive contacts with the http://www.new-club-of-paris.org . This organsation runs a prototype project the goal of which is to create a platform for intellectual interchangees between seniors. Some related events take place in the very near future on Tenerife, Canary Islands, between Nov. 20th and 30th – see
http://www.humboldt-kosmos-multversity.org