Trading Strategies

Axel Merk's 'Best Bubble Indicator' Is Setting Up For "Major Shock"

"In my experience, complacency, with its cousin low volatility, is the best bubble indicator I am aware of. Perceived safety gets investors to pile into investments that they later regret. When it happens on a massive scale, major market distortions may be created that can lead to financial crises. And as the tech bubble that burst in 2000 shows, even if there is no systemic risk, the unwinding can be most painful to investors."

SEC Halts Issuance Of Wall Street's Latest Mom-And-Pop Doomsday Machine: Quadruple-Levered ETF

Earlier this month we were somewhat surprised when the SEC blatantly ignored numerous complaints and approved a request to trade new quadruple-leveraged exchange-traded funds.  But, as it turns out, this latest digital slot machine may have skated through the regulatory process without catching the attention of SEC Commissioners because of a clever structuring tweak which resulted in it being presented to regulators as a commodity product rather than a traditional mutual fund or ETF product.

There Is Now A Quadruple-Leveraged S&P 500 ETF

On Tuesday, the SEC ignored numerous complaints, and approved a request to trade quadruple-leveraged exchange-traded funds, the first product of its kind, and one which will spawn hundreds of copycat immitators promising even greater possible returns and instead delivering theta that is guaranteed to wipe out virtually anyone who allocates capital to the product.

Financial Market Insurance Is Not Like Hurricane Insurance

"..the hurricane is not more or less likely to hit because more hurricane insurance has been written. In the financial markets this is not true. The more people write financial insurance, the more likely it is that a disaster will happen, because the people who know you have sold the insurance can make it happen. So you have to monitor what other people are doing.”

As Wall Street Tries To Trade On Trump's Tweets, Problems Emerge

A problem has emerged as Wall Street scrambles to trade on Trump tweets: while HFT strategies can quickly identify that a stock was referenced in a tweet, isolating if the actual message is bullish, bearish or indifferent presents a major challenge.

The Coming Bond Market Crash - An Interview With Eric Hadik

"I believe 2017--2021 will represent the end and reversal of that multi-decade trend - as the debt bubble bursts and bond markets begin to crash... Each phase was a desperate battle between centralized, governmental control of currency versus universal, hard-asset based currency. And each phase saw the acceleration and intensification of that battle take hold in the ‘7’ year."

BofA Fined $12.5 Million For Creating At Least 15 Mini "Flash Crashes"

The SEC announced that BofA/Merrill Lynch agreed to pay a $12.5 million penalty for "maintaining ineffective trading controls" that failed to prevent erroneous orders from being sent to the markets and causing at least 15 mini-flash crashes between 2012 and 2014.