Institutional Investors

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The incredibly strong demand for physical precious metals around the world continues to be obscured by institutional selling of futures contracts on the COMEX. The paper or electronic market continues to dominate the spot price for now. But rising premiums and delays for popular bullion products suggests that proper price discovery reflecting real world supply and demand may be at hand.

Why The Fed's Credibility Is Crashing: The Market's Three Biggest Worries

The first is that by keeping rates lower for even longer, the EM imbalances the Fed is worrying about will grow even larger, making it harder to exit stimulus; The second is a question on the value of forward guidance, after the Fed has repeatedly called for a hike and then backed out; The third is that the Fed may have limited, or no ammunition to react to the next potential shock, and that financial booms and busts may grow even larger over time.

Japanese Stocks/USDJPY Plunge As China Cracks Down On Aggressive-Buying By "Sinister Stock Squads"

Despite the approval of various Asian nation officials (e.g. Japan's Amari: "Fed decision appropriate"), it appears non-hawkishness is not enough to keep the dream alive. Japan's Nikkei 225 is down over 600 points from its post-FOMC spike highs, and USDJPY has tumbled over 1 handle - back below 120.00. Chinese stocks are extending losses after last night's late tumble, as ironically, China's securities regulator has uncovered a number of market manipulators who boosted prices of some stocks to sky-high levels during the peak of the bull market, attracting numerous followers who have suffered heavy losses in the recent market crash. The PBOC strengthened the Yuan fix for the 2nd day in a row (by the most in 2 weeks).

The Fed Shouldn't Worry About Losing Credibility: It Already Lost It

It appears that the Fed no longer cares about doing the right thing for a very simple reason - the Fed no longer is worried about losing credibility. As the following chart showing the results of a survey of 150 institutional RBS clients and investors confirms, two -thirds already believe the Fed has lost credibility.

Why Apple’s Launch Event Was "Creepy As Hell"

The Apple Launch is a closed circle of fawning sycophants, thrilled with gimmicks, adapted to computers, programmed, a throng of identical authentic individuals chained to their machines and congratulating themselves on being ‘connected,’ led by a human that resembles a robot. Two hours of watching the Apple Launch actually made the Manson Family seem homey.

Frontrunning: September 9

  • Global stocks rally as investors scent fresh stimulus (Reuters)
  • Japan's Nikkei 225 Rises 7.7% for Biggest Gain Since October 2008 (BBG)
  • China's Stocks Advance for Second Day Amid Stimulus Speculation (BBG)
  • Abe Pledges Corporate Tax Cut as Investments Slump (BBG)
  • U.S. to shift 50 staff to boost office handling Clinton emails (Reuters)
  • Chinese Premier Li Keqiang Says China Doesn't Want a Currency War (BBG)
  • One Thing China Got Right (BBG)

Frontrunning: September 8

  • Sure, why not: China Rebounds as Trade Data Disappoints (BBG)
  • Oh, that's why: China's Stock-Rescue Tab Surges to $236 Billion, Goldman Says (BBG)
  • Can't make this up: German finmin says must avoid reliance on debt, cenbank stimulus (Reuters)
  • Stocks rise after contrasting China, Germany trade data (Reuters)
  • Euro zone second-quarter GDP revised up as Italy grows faster (Reuters)
  • Brent oil rises on European, Chinese data; oversupply weighs (Reuters)
  • Corporate Prosecution Deals Headed for a Legal Test (WSJ)

Frontrunning: August 31

  • Hilsenrath: Fed Appears to Hold Line on Rate Plan (WSJ)
  • Europe, Asia stocks set for worst monthly drop in three years on China, Fed (Reuters)
  • Beijing abandons large-scale share purchases (FT), if only for a few hours
  • China’s Next Problem: Paying for Its Stock-Market Bailout (WSJ)
  • Crises Put First Dents in Xi Jinping’s Power (WSJ)
  • Man Group’s China Chief Said to Assist Police in Probe (BBG)

How Investors Respond To A Market Crash

In the midst of turmoil among asset classes, investors tend to make irrational decisions, such as panicking and liquidating at inopportune times. Nobel Prize-winning Psychologist Daniel Kahneman helps explain ill-conceived reactions to the market with his concept of loss aversion. That’s the fear and feelings of loss surpass the joy one may receive from a similarly sized potential gain.  In order to frame this discussion of volatility, we dug up old surveys of institutional and individual investors that recorded their responses to the 1987 market crash

Morning Has Broken: A Deep Dive Into The Trading Patterns Of The American Retail Invetor

Americans associate the morning with “Time to trade equities”. They hear news – in the case of the last few days, bad news from overseas – first thing in the morning. By the time the market opens, they have made their decisions and entered their orders. About half as many will check in around the close to see how things turned out, but for many the next piece of market news won’t hit their mental “Screen” until 20 hours or so later.