Quad-witching days are volatile on normal days, so in an environment of virtually zero liquidity, in which the market careens from one extreme to another simply based on whether the Fed utters one single word, in which volatility across asset classes is soaring, and in which it is all about igniting algo momentum, today's quadruple withicng should be memorable, which is good since there is virtually no macro data today to speak of.
The only market year to date that has shown truly impressive gains in both local currency and USD terms, is also the best performing market of 2014 - China, which is now up almost 100% in less than a year! Here, courtesy of UBS, is the complete list of what may be causing China's relentless stock market surge.
A wicked web of deceit, with just a good measure of theft and forgery thrown in for old time’s sake!
We thought private tech company valuations looked ridiculous, but as the VC world will patiently explain to you, things like cash flow and operating costs actually don't matter, and "valuation" doesn't mean what you thought it meant.
Active managers, stinging from the proliferation of passive indexing, are utilizing robots to transform active strategies into "passive" ones, capturing 20% of the US ETF market in the process.
Well that escalated quickly...EURUSD has broken the key 1.05 trendline level; and having rallied yesterday on the worst data since Lehman, today it appears some sense of resignation to the fact that The Fed is boxed in to a rate hike no matter what is setting in... and that the exuberant hockey-stick expectations of earnings growth is spiralling the toilet of near cycle lows oil prices. US equity prices have roundtripped most of yesterday's dead-cat-bounce spike with Nasdaq leading the drop and The Dow and S&P are back in the red year-to-date.
As HFT shops begin to turn on each other, it seems appropriate to reflect on the impact that Michael Lewis' Flash Boys book had on exposing the ugly truth that many have been discussing for years in US (and international) equity (and non-equity) markets. As Lewis concludes, after explaining the attacks he has suffered from the HFT industry, "If I didn't do more to distinguish 'good' H.F.T. from 'bad' H.F.T., it was because I saw, early on, that there was no practical way for me or anyone else... to do it. ... The big banks and the exchanges [have] been paid to compromise investors’ interests while pretending to guard those interests. I was surprised more people weren’t angry with them."
There was a point in 2010 when American capitalism might have had an opportunity to heal itself and commence on a long march toward sustainable growth and real wealth gains. But the monetary politburo would have none of it - keeping the pedal to the metal until this very moment... and the rest is history. The Fed and the other central banks around the world have fomented a new and even more virulent and dangerous financial bubble.
Warren Buffett's “financial weapons of mass destruction” - how are you?