New York Stock Exchange
Before the current turmoil began, Ben Bernanke's hope was that rising asset prices would lead to a "wealth effect" that would encourage the American consumer to start spending again, and thus help the American economy finally leave the "Great Recession" behind. However, the empirical data does not support this notion and equally the economy isn't booming sufficiently to make the reverse case that the economy drives the stock market. So what is causing the markets to boom right now? Steve Keen notes that during the period from 1890 to 1950, there was no sustained divergence between stock prices and CPI, and that almost all of the growth of share prices relative to consumer prices appeared to have occurred since 1980; and then, boom! - what must certainly be the biggest bubble in stock prices in human history took off - and it went hyper-exponential in 1995. So are stocks in a bubble? Yes - and they have been in it since 1982. It has grown so big that - without a long term perspective - it isn't even visible to us. It has almost burst on two occasions - in 2000 and 2008 - but even these declines, as precipitous as they felt at the time, reached apogees that exceeded the previous perigees in1929 and 1968.
“The Year of the Glitch” - The Dark (Pool) Truth About What Really Goes On In The Stock Market: Part 4Submitted by Tyler Durden on 07/07/2013 11:31 -0400
There was more. BATS, Facebook, and Knight were just the three most prominent computer glitches of the year. Outsiders were realizing what the insiders had known for years: The U.S. stock market was plagued with glitches that happened on a daily basis, and not just in stocks. Markets for commodities, bonds, and currencies all had their fair share of computer-driven mishaps. Increasingly, investors were wondering not only if the market was rigged, but whether it was completely broken. Indeed, the trade publication Traders Magazine called 2012 “The Year of the Glitch.”
History shows that buying assets down 60% or more has usually delivered fantastic results. On this basis, gold miners, coffee, Vietnam and the Indian Rupee may be tomorrow's winners.
The late 20th century was a jam-packed time for stock-market crashes that would change, shape and alter our lives in so many ways.
Murder, Death and Mobsters on Wall St....Who Knew?
NSA Grasps at Straws
To think it only took the world's most (in)famous whistleblower to get the NSA to disclose that it had heroically managed to prevent terrorist attacks involving the New York Stock Exchange (we supposed they refer to the Manhattan-based TV studio and not the actual exchange where the servers are now housed in Mahwah, NJ) and the NY Subway. Because whereas there was a time in the past when the various US secret services would scurry at the opportunity to disclose their expertise to the general public, now it is a false negative that is supposed to disprove a positive (pervasive spying on the US population is good for you because...). Of course it takes one non-false positive to disprove a false negative, namely the Boston Bombers, who as far as we recall, used cell phones to communicate. But so much for details: now please praise the NSA, and also comply with the Administration's push to rescind the second amendment. Or is Obama no longer pushing for "arms control"?
On December 1, 2001, Argentina’s economy was in trouble. Unemployment was high, debt was high, and recession had taken hold. But life was somewhat ‘normal’. Basic services still functioned. And no one had to really worry about... food. Or water. Then it all changed. Literally within a day...
Goldman Sachs has suggested that there may be up to 349 Initial Public Offerings (IPOs) taking place in China this year. But, it’s not the Chinese capital markets that those companies will be wanting. Chinese firms are still hell-bent on getting floated on the world’s biggest and best stock exchange, and rightly so.
Here are the worst IPO fails of all time in the world. The ones that we thought would be unfailingly good. The ones that we thought we could bet our bottom dollar on and still strike it rich.
This is no time to be complacent. Massive economic problems are erupting all over the globe, but most people seem to believe that everything is going to be just fine. In fact, a whole bunch of recent polls and surveys show that the American people are starting to feel much better about how the U.S. economy is performing. Unfortunately, the false prosperity that we are currently enjoying is not going to last much longer. Unfortunately, the majority appear to be purposely ignoring the economic horror that is breaking out all over the globe.
A cruel twist for an already threatened industry.
History never changes. Or, at least it changes very slowly indeed. So here we are, like those before us, warning of our own Great Depression, of our own World War, or of even larger cycles like the fall of the English, Spanish, or Roman empires. And so far as we can tell, few listen and nothing changes. Why? Because it isn’t time. Understanding long-term cycles, and how they shape our spectrum of responses in periods of crisis and transformation is key to comprehending what is to come (and how we will allow it to affect us). Do you really think your ancestors didn’t see the Depression coming in 1921 or in 1929? Of course they did. The Balloon Option-ARM mortgage had just been invented, creating a housing boom larger and even more groundless as our own, immortalized by the Marx Brothers in The Cocoanuts. They warned the world then just as we do now, and no one listened then, just as they don’t now. Why? It wasn’t time.
Capitalism may have bested communism a few decades ago, but exactly how our economic system allocates society’s scarce resources is now undergoing its first serious transformation since the NYSE’s founding fathers met under the buttonwood tree in 1792. Technology, complexity and speed have already transformed how stocks trade; but As ConvergEx's Nick Colas notes, the real question now is what role these forces will play in long-term capital formation and allocation. Rookie mistakes like the Twitter hack flash crash might be easy to deride, but make no mistake, Colas reminds us: the changes that started with high frequency and algorithmic trading are just the first step to an entirely different process of determining stock prices. The only serious challenge this metamorphosis will likely face is a notable crash of the still-developing system and resultant regulation back to more strictly human-based processes.
- Police Searching for 19-Year-Old Boston Bombing Suspect (BBG)
- Mayhem Erupts in Boston After MIT Campus Officer Slain (BBG)
- Elvis Impersonator Accused of Ricin Letters Sowing Fear (BBG)
- Blackstone Pulls Out of Dell Bid on Rapidly Falling PC Sales (BBG)
- Before Texas plant exploded: What did regulators know? (Reuters)
- Aso Says Japan Policy Unopposed at G-20 Meeting as Yen Falls (BBG)
- Bipartisan pair target $2.5tn US savings (FT)
- Plan for new Cyprus vote casts uncertainty on bailout (Cyprus Mail)
- Ireland picks through debtors’ lifestyles (FT)