Stop Trading

Tyler Durden's picture

Market Tranquility Is Sowing The Seeds Of Its Own Demise





The mainstream media is latching on to the idea that all is not well in the world of 'markets'. The FT's Gillian Tett notes that, as we have vociferously explained, almost every measure of volatility has tumbled to unusual low levels, "this is bizarre," she notes, "financial history suggests that at this point in an economic cycle, volatility normally jumps." But investors are acting as if they were living in a calm and predictable universe, "[Investors in] the options markets are not pricing in any big macro risks. This is very unusual." In reality, as Hyman Minsky notes, market tranquility tends to sow the seeds of its own demise and the longer the period of calm, the worse the eventual whiplash. Tett concludes, that pattern played out back in 2007... and there are good reasons to suspect it will recur.

 
EconMatters's picture

The Party Is Over In The Treasury Market





It is very apparent the Fed literally are making policy up as they go along and Wall Street doesn`t realize that the Fed has no exit strategy.  The learning curve is going to be painful as always for Bond Holders.

 
GoldCore's picture

“Geopolitical Earthquake” That Is Historic China Russia Agreement Not Appreciated





China and Russia signed an historic agreement in Shanghai this week - the ramifications of which have yet to be appreciated ... Reserve currency status does not last forever. Empires rise and fall. The world is constantly changing and evolving. Nothing lasts forever …

 
Tyler Durden's picture

"Timestamp Fraud": A Rigged Market Explained In One Simple Animation





The topic of High-Frequency-Trading quickly dissolves into a smorgasbord of mnemonics and 'inside-baseball' technical terms - just complicated enough to lose everyone that matters or should care about its implications. Despite the fair-and-balanced defense from the mainstream media business channels (sponsored by the belief in the status quo fair markets that 'America the free' is known for), the fact is that HFT does front-run (perfectly legal under the umbrella protection of Reg NMS) order flow, but there may be one more wrinkle - one which would cement the Michael Lewis (accurate) allegation that the market is rigged.

 
Tyler Durden's picture

Here Come The Feds: FBI Probing HFT





It is perhaps little wonder that Virtu was in such a hurry to use the cover of the JOBS Act to IPO itself before the whole HFT 'game' was exposed. Just 5 years after we first drew the world's attention to the potential damage that HFT could do; and mere minutes after we posted our article on how HFT is being set up to be the scapegoat for all that is broken with the market and conveniently distracting from the Fed, and god, or perhaps his agent on earth Goldman Sachs, 'completely unexpectedly' sends in the FBI:

  • *FBI SAID TO PROBE HIGH-SPEED TRADERS OVER ABUSE OF INFORMATION
  • *FBI Working With SEC, CFTC in High-Speed Investigation
  • *FBI Investigating Whether High-Speed Firms Trade on Nonpublic Information

Now, the question is: how many HFTs will stop trading for fear that any further trading on 'non-public information' will be deemed criminal from this point... or keep trading and lobby/hope that "a reasonable man" will believe their liquidity-providing lies.

 
Tyler Durden's picture

Jim Rogers: "America Is Shooting Itself In The Foot" Over Russia





There is no reason for Russia to worry about the western sanctions it is facing now over the Ukrainian issue since "Moscow has too many other trade partners to work with," Jim Rogers explains in this interview, adding that "America is shooting itself in a foot getting the most of our world to pushing China and Russia closer together." Simply put, he warns, "I don’t see any sanctions strategy that they can use that will hurt Russia worse than it will hurt the people imposing those sanctions... I think Mr. Obama is making the fool of himself yet again."

 
Tyler Durden's picture

China Faces "Vicious Circle" As Commodity Collateral Collapses





As we warned last week, stockpiles of iron-ore have reached record levels in China as end-demand slumps but, as Bloomberg notes, this is potentially creating massive dislocations in other markets. Record imports of iron ore and copper, driven by traders who use them as loan collateral, risk repeating the vicious cycle of repayment difficulties and falling prices already seen in the steel-trading market. A stunning 40 percent of the iron ore at China’s ports are part of finance deals (having replaced copper after China's last shadow-banking crackdown) and with the glut, prices drop (driving down the value of collateral on loans) and "borrowers, forced by their bankers to repay loans or to top up collateral, will have to sell the metals, sinking market prices even further and begetting a vicious cycle."

 
GoldCore's picture

BoE Survey Shows Growing Fears Of House Price Crash





“This is different" and "this location is different" is the mantra of every property bubble. We will soon see if the London property bubble is truly different or will suffer the fate of the bubbles throughout history. Of the four charts in our market update today, which ones do you think show characteristics of a bubble? Those diversifying and buying gold in the UK will be rewarded in the coming years. The smart money is reducing exposure to overvalued London property and increasing exposure to undervalued gold. 

 
Pivotfarm's picture

Global Growth and Trade Barriers





Subsistence farming never worked because being self-sufficient was firstly nigh-on impossible and secondly limited as well as being dependent on the climate. 

 
Tyler Durden's picture

Two Former JPMorgan "London Whale" Traders To Be Arrested





   "Mr. Martin-Artajo thought that the market was irrational."   

  -  Permanent Subcommittee on Investigations, US Senate, Report on JPM Whale Trades: A Case History of Derivatives Risks and Abuses, p. 104  

Just like Breaking Bad, the most exciting trading drama of 2012 is coming to an end.

 
Tyler Durden's picture

Regulators Eye Dark Pool Secrecy And Hi-Freaks' "Algos Gone Wild"





It has been almost 2 years since FINRA started to get 'serious' about thinking about looking into an investigation of (get our point) high-frequency trading and dark pools but it seems, as the WSJ reports, this time they are more specific. In Sept 2011 FINRA noted "there's something that's troubling us in the marketplace," and it seems now that FINRA has spent the time since understanding the jargon they have some questions,  "who is responsible for the automatic shut off or kill switch," asking firms how they avoid "quote bursts and stuffing" that create confusion for other investors and potentially distort the market, and approving a plan to force dark pools (15% of all stock trading)  to disclose and detail trading activity on their platforms.  Of course, we've seen this kind of bluster before and they did nothing then but hope springs eternal.

 
govttrader's picture

A Primer For Interpreting Random Market Profiles And Reactions To Economic Data in US Treasuries





This a fairly broad topic, and any "rules" would be vague at best, so i'll use recent trading activity as an example.  Often markets (and traders) are described as schizophrenic...and perhaps that should even be part of the job description....here's an example why...

 
testosteronepit's picture

Retail Investor Nightmare: The Bond Fund Rout





“We’re just building a bigger and bigger time bomb.”

 
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