In particular, too much capital is allocated to purely financial speculation such as high frequency trading and derivatives trades with a total notional amount in excess of $500 trillion for OTC alone.
Why does this matter? Because these types of financial trades are largely zero sum trades. They shuffle money around but they don’t expand the technological capability set of humanity. Only investments in basic and applied research and investments in the commercialization of new technologies do that.
Look at any trade, and the odds are that on one side you will find people who know less than their counterparty and yet have not asked themselves the obvious question: "if this is a good price at which to buy, why are these people who know more than I do about the situation selling?"
If you don't start thinking about finance in this way--don't start by classifying those who trade into savers, borrowers, risk-bearers, risk-shedders, principals, agents, gamblers, and marks--you do not, I think, have any chance of conducting a serious analyses of modern finance.