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Michael Hudson: Average Stock Held for 22 Seconds and Average Foreign Currency Position Held for 30 Seconds

George Washington's picture




 

Washington’s Blog

Michael Hudson is a highly-regarded economist. He is a Distinguished
Research Professor at the University of Missouri, Kansas City, who has
advised the U.S., Canadian, Mexican and Latvian governments as well as
the United Nations Institute for Training and Research. He is a
former Wall Street economist at Chase Manhattan Bank who also helped
establish the world’s first sovereign debt fund.

Yesterday, Hudson said:

Take any stock in the United States. The average time in which you hold a stock is--it's gone up from 20 seconds to 22 seconds
in the last year. Most trades are computerized. Most trades are
short-term. The average foreign currency investment lasts--it's up now
to 30 seconds, up from 28 seconds last month.

See also this and this.

 

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Mon, 01/03/2011 - 17:06 | 845090 the rookie cynic
the rookie cynic's picture

The robot traders suffer from premature speculation I guess.

Mon, 01/03/2011 - 16:22 | 844944 mark mchugh
mark mchugh's picture

That Hudson clip is great!  Thanks GW.

Mon, 01/03/2011 - 15:07 | 844731 bull-market_3.0
bull-market_3.0's picture

I think what might be more interesting would be a measure of the average duration of trades for non-computerized investments. At least that way, we can see the average duration of human trades

Mon, 01/03/2011 - 14:54 | 844697 Stuck on Zero
Stuck on Zero's picture

Wow!  At that rate a Tobin tax on stock transactions would eliminate the national debt in about a day!

Mon, 01/03/2011 - 16:13 | 844913 mark mchugh
mark mchugh's picture

Right on!  Think they'll do it?

Mon, 01/03/2011 - 14:36 | 844665 Salinger
Salinger's picture

but the hedgies live large, there's no denying that, among other things they're scooping up prime real estate at bargain prices from the timid who lost big in the past couple of years - I wonder if Rosie ever bought or if he still rents in Toronto, if  he gets the pink slip later this year his house would have appreciated by some 20% but my guess is he has been renting

Mon, 01/03/2011 - 14:16 | 844624 Dr. Gonzo
Dr. Gonzo's picture

"I live for my dreams...and a pocket full of gold."

Led Zeplin (1973)

Mon, 01/03/2011 - 14:16 | 844621 Dr. Gonzo
Dr. Gonzo's picture

I sold my IRA rollover. Paid the taxes. Paid off my mortgage. I sold my Roth IRA contributions to buy silver. Left all the chedder in from my Roth IRA big copper minning plays before the 08 blow-up and last year moved most to PSLV. All the free money I have now i buy coins. I just don't care. Paper money is fake. The stock market is rigged and manipulated. I don't want any part of it. I did well but for me it's not about winning. It's about living your life and protesting the machine. Remember. You can die with 10 million in a bank account or you can die with 10 thousand oz of silver/gold. Either way we all die. 

Mon, 01/03/2011 - 14:12 | 844610 Drag Racer
Drag Racer's picture

At least they don't charge you to make a bet in Vegas...

Mon, 01/03/2011 - 14:58 | 844711 johnnynaps
johnnynaps's picture

+100000! I am more profitable in Atlantic City then in Wall Street due to fees and taxes! What a joke!

Mon, 01/03/2011 - 13:28 | 844498 Apostate
Apostate's picture

What would the market look like if we had a free choice in which exchanges to use?

The markets are no more free than the airline industry.

Mon, 01/03/2011 - 14:06 | 844595 Temporalist
Temporalist's picture

I disagree; the markets are free to be manipulated.

Mon, 01/03/2011 - 13:26 | 844492 What_Me_Worry
What_Me_Worry's picture

22 seconds?  I'll take the under for 2011.

Mon, 01/03/2011 - 13:37 | 844482 TruthInSunshine
TruthInSunshine's picture

Time is on my side, yes, it is.
Time is on my side, yes, it is.
Now you were saying that you want to be free
but you'll come runnin' back, you'll come runnin' back,
you'll come runnin' back to me.

- Lyrics & Song by the HFTbots & The Algos.

Mon, 01/03/2011 - 13:18 | 844477 Bearster
Bearster's picture

Dumb question: how does one make such an "unfree" market "freer"?  By forcing people to hold positions for longer?

How about:

 - end the Fed

 - allow people to choose gold or whatever they want for money

 - end bailouts / TBTF / FDIC / etc.

 - end Donk, Sarbox, SEC, CFTC, OTC, OTS, etc.

 - no more stimulus

 - end FLA, minimum wage, and other price controls

And see where the chips end up.

 

Mon, 01/03/2011 - 14:48 | 844690 Spaceman Spiff
Spaceman Spiff's picture

Good list...    

I'd also scale down some regulatory laws (osha, epa, etc).  

On the state/local levels, we need some sanity to the permitting process and local bureaucracies.    

tort reforms

Make sure the process for licensing professions is 1)  reasonable  (do we need cosmetology licenses in some states...  are the tests an appropriate reflection of what is needed to practice) 2) transparent and appealable (make sure they release questions and they are fair)  3)  fight against protectionism by those already licensed  (i've heard that some cpa tests have 50% pass rates.   california's bar passage is the same.)  

Mon, 01/03/2011 - 17:09 | 845097 FatFingered
FatFingered's picture

Florida State General Contractor's test has an admitted targeted 70% failure rate. 

Mon, 01/03/2011 - 14:42 | 844677 NotApplicable
NotApplicable's picture

Dumb question: how does one make such an "unfree" market "freer"?

Paint it black!

Mon, 01/03/2011 - 13:33 | 844507 Tell me lies
Tell me lies's picture

I guess I shoud have asked is pension money being churned this way?

Mon, 01/03/2011 - 14:01 | 844571 kaiserhoff
kaiserhoff's picture

Probably not.  You have to be a broker/dealer with zero commissions or better yet, getting paid for order flow, for this to work.  On the other hand, pension money is funneling into cotton, crude oil, and Chinese solars.  Why does that not fill my heart with everlasting joy?

Mon, 01/03/2011 - 13:11 | 844456 Tell me lies
Tell me lies's picture

Dumb question, how does that work with pension funds?

Mon, 01/03/2011 - 13:02 | 844430 Racer
Racer's picture

If the average holding is for not even half a minute then it really proves without doubt that this is not a 'stock' market... it is purely a casino that is totally rigged in favour of the banksters.

All I can say is well done to those people who are pulling their money out of this scam.

Mon, 01/03/2011 - 12:58 | 844416 Don Birnam
Don Birnam's picture

Ah, too funny indeed -- and in the left margin of this article, as of this writing, "Trade like a pro. Get Jim Cramer's Action Alerts Plus !"

Mon, 01/03/2011 - 12:58 | 844415 NotApplicable
NotApplicable's picture

Wow, 22 seconds is forever to an HFTbot. I'm shocked that the number is even in double-digits, let alone over twice that.

Must be all of those widow and orphan funds raising the average.

Mon, 01/03/2011 - 15:22 | 844765 FinancialAnon
FinancialAnon's picture

skewness bitchez

Mon, 01/03/2011 - 13:03 | 844429 Azannoth
Azannoth's picture

I think this number includes human traders

Mon, 01/03/2011 - 14:40 | 844673 NotApplicable
NotApplicable's picture

And all of my leftover tech-wreck stocks sitting in a dead IRA. They may be only worth a few pennies, but at least they add value to the averages.

Mon, 01/03/2011 - 12:52 | 844402 topcallingtroll
topcallingtroll's picture

I guess being a swing trader qualifies as buy and hold now. I am holding my positions too long!

Mon, 01/03/2011 - 16:09 | 844902 midtowng
midtowng's picture

Buy and Hold, bitchez!

Mon, 01/03/2011 - 12:51 | 844396 AchtungAffen
AchtungAffen's picture

The freedom in free market is quite Sartrian...

Mon, 01/03/2011 - 16:27 | 844956 covert
covert's picture

I wish that I would have been a broker. all this churning. have a drink at the new bar in town with the movie stars.

http://covert2.wordpress.com

 

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