This page has been archived and commenting is disabled.
One-In-A-Billion "Hiccups" Are Happening All The Time, Citi Warns Something Is Wrong
Earlier this year JP Morgan’s letter to shareholders, Jamie Dimon let it slip that there are some very disturbing things going on in today’s capital markets. Prices can gap in illiquid markets, Dimon explained, and that has the very real potential to spark a panic, causing illiquidity to spread to previously liquid markets. Dimon warned that one should not be fooled by relatively tight bid-asks; it’s market depth tells the true story, and as JP Morgan’s Nikolaos Panigirtzoglou will tell you, some markets (the Treasury market for instance) are getting quite thin indeed.
The dangers associated with a widespread lack of market depth are of course exacerbated by the presence of HFTs. This was on full display during last October’s Treasury flash crash. Here’s what Dimon had to say on the subject: "..then on one day, October 15, 2014, Treasury securities moved 40 basis points, statistically 7 to 8 standard deviations– an unprecedented move – an event that is supposed to happen only once in every 3 billion years or so." "Some currencies recently have had similar large moves," Dimon added, referencing the carnage that accompanied the SNB’s abandonment of the euro peg in January (as well as countless other flash crashes and rips) and presaging precisely what we’ve seen this week on the heels of China’s move to devalue the yuan.
The takeaway from all of this is not, as Dimon concluded, that statistics can’t be trusted, but rather that when things that are supposed to happen once every 3 billion years start happening once every three months, or every three weeks, then something is definitively broken.
Here, courtesy of Citi’s Matt King, is a look at some of the major one in a billion year events that have taken place over the last four years:
As King notes, either there’s a "widespread case of the hiccups", or something else is very, very wrong.
»
- 158837 reads
- Printer-friendly version
- Send to friend
- advertisements -
Just a 'normal market'...what could possibly happen?!?
There is a world outside the stock markets. More horrible news from the Middle East. As President For Life Obama was ordering the military to "accidentally" drop weapons to ISIS, the ISIS leader, al-Baghdadi, was using his U.S. hostage Kayla Mueller as a sex slave, repeatedly raping her until she somehow died, probably murdered by al-Baghdadi. The FBI knew about her treatment but they had their orders, from one of Obama's NWO flunkies, to keep silent as Obama pushed to supply "moderate" terrorists with U.S. weaponry to take over Syria. At pressent, none dare call Obama's actions in Syria treason.
--- Washington Post (15Aug2015)The leader of the Islamic State personally kept a 26-year-old American woman as a hostage and raped her repeatedly, according to U.S. officials and her family. The family of Kayla Mueller said in an interview Friday that the FBI had informed them that the emir of the self-proclaimed Islamic State, Abu Bakr al-Baghdadi, had sexually abused their daughter, a humanitarian worker. Mueller’s parents said the FBI first spoke to the family about the sexual assault in June and provided more details approximately two weeks ago. The bureau pieced together what happened to the American from interviews with other hostages and the captured wife of a senior Islamic State figure. The FBI also told the Muellers that their daughter was tortured. “June was hard for me,” said Marsha Mueller, Kayla’s mother. “I was really upset with what I heard.” News of Baghdadi’s involvement with Mueller, who is from Prescott, Ariz., was first reported Friday by the Independent, a London newspaper.
Yeah,yeah, yeah.But all we wan't to know is how many lampshades did her skin make ?
Are you really that dumb you believe that crap ?
It comes from the same genre as boiling Belgian nuns to make soap.The lies are designed to
get an emotional response bypassing logic.Seems to have worked in your case.
You mean like when the Iraqi monsters tore the Kuwaiti babies from their incubators? https://en.wikipedia.org/wiki/Nayirah_(testimony)
ABC News said it wasn't true? Now I'm on the fence (sarc). I'm withholding judgment on this issue until I hear from Becky Quick.
People here in Prescott are damn interested.
gee, is something wrong?
Hmmmm...let me ask my shiny precious if anything is wrong...
Shiny stack says, "Nope...nothing wrong here."...
must be some other bitchez with problems.
We're all good with our stack.
Tickmill's head of China said that we could expect a rate cut from PBOC this weekend or the next one. Japan will most likely introduce a new QE program next Thursday as the BOJ meets to devalue Yen. Big moves ahead guys and don't go against the trend!
When GHW Bush was having cold feet about acting against Iraq, the British sent the Archbishop of Cantebury to persuade him to get the United States to oppose the annexation of Kuwait.
Bush was mostly undecided, and conflicted, about using U.S. force. So the Archbishop handed Bush photos of Iraqi soldiers with Kuwaiti babies on their bayonets.
Iraqi soldiers with Kuwaiti babies on their bayonets.
Just like the Belgian babies on German bayonets, huh?
I'm sure GHW Bush would be a very hard sell for going to war in the Middle East. Such a moral, upright man. OK, the odd slip up, like running drug and arms smuggling rings and being involved in the assasination of a president, but a real Mercan boy.
What a bunch of bullshit.
No kidding. Some of the comments here lately at ZH are out of the Twilight Zone when it comes to truthfulness or accuracy.
Thanks Amish Hacker
Now I have learned Merica learned Makirovka much earlier than I realized. Kind of like the Ukies crucifying a young boy at a street-square that doesn't exist.
Also posted way below:
In Islam captured infidels are property. Property can not be raped. The story is a lie.
Stupid bleeding heart idealist got to learn the hard way that the world is a very cruel place.
I don't blame her because she was a victim.
The blame falls on those who filled her head with these stupid ideas.
Her parents are likely part of that influence.
I think we can all agree that the world is a very cruel place. I disagree that it is a "stupid liberal idea" to try to change that and help people. I also suspect that many here who consider themselves conservative (especially those who are also religious) would disagree that humanitarian efforts are stupid and that those who put themselves in harm's way to help others only get what's coming to them if they meet harm.
And of course the whole story is probably bullshit anyway.
Really. Even the FBI would not tell a grieving family that, unless it was a lie for
a bigger(evil) purpose.
Just think of what an evil MF'r you need to be to tell a mother that her daughter was raped and tortured so that the news will hit the interwebs and help convince the public that we need moar war.
Shame we don't have his name.We could lock him up with Bubba so he could receive the
same supposed treatment.
Maybe the market indexes reflect, not so much the relative value of a sovereigns industrial worth, but, instead, the inverse indexing of the relative strength of the the globes most available commodity, sovereign currencies?
Calm the fuck down, this kinda shit happens all the time.....
Faceplant.
RIPS
Herein lies a problem with the whole thing (While acknowledging point above of Rips and others:
Even when the evil doer is brought to justice one way or another, (Retribution from the universe can be a brutal bitch); the victim still has to live with what happened to them.
And, quite often, much like with roaches, there is usually not just one victim.
Here's a little insight into the rape story...http://www.raymondibrahim.com/islam/why-muslim-rapists-prefer-blondes-a-...
(My hyperlinker blewup, paste it)
and their parents.
I hope you get the opportunity to learn next. Soulless fuck.
http://www.hangthebankers.com/israeli-jailed-6-months-for-burning-baby-a...
Israeli jailed 6 months for burning baby and father to death, Palestinians jailed 20 years for throwing stones!
True justice, the wisdom of Solomon shown there.
Why do people get more upset about a raped woman who put herself in harms way than a father and his baby burned to death? Wouldn't be because Mercan lives matter, would it?
We've noticed a massive spike in silver sales this week... https://www.eurgold.eu
Nothing wrong... it's just the New Normal.
Sigma -> SICKMA
They're just, whatchamacallit? Yeah, Fukushima moments.
They wil be forgotten soon.
Odd coming out of Jamie since he's one of the ones who broke the system.
Jimmy Carter will be going to hell any day now, perhaps a lot of these fuckers couild quickly join him.
It would be boring without the snfus
" One-In-A-Billion "Hiccups" Are Happening All The Time, Citi Warns Something Is Wrong "
Yeah, your models are broken, that is what is wrong. Your staff of thousands of highly paid, utterly incompetent, fuck bunnies are incapable of formulating any other models than the broken ones you still use to screw your clients. And now the raw, hard data are casting a horrific light on your lies. You can't stand it, so you say "Something is Wrong".
MmmmHmmmm
sure
Bottom line is their models are just plain wrong. I don't disagree that these are statistically improbable events in a marketplace, but its obvious that the models aren't able to compensate for a centrally planned (rigged) market. acknowledge models don't work and call for an end to central planning. That is all.
Just another thought, but maybe the "irrational" markets aren't as irrational as they appear. I mean, if you think about it, perhaps these are just simply the animal spirits one should expect before hyper-inflationary event. I mean why is it so hard to believe that a stock can go up 500%, drop 70-90% in a 5 year period, if ultimately this stock is gonnna be up 5,000% and the currency is gonna lose 99+% over a 10-20 year period? I mean, to me this shit is starting to seem normal and expected.
Right. The markets only appear irrational with these huge moves, because the fundamental measurements are so off. The weird existence defined by fiat currency is jacked up. Physics, chemistry, math, and logic can't be applied to a fiat world, like it can with a gold world. It's no wonder that statistics can't be applied either. Expect more.
Why, it's the Ivy League exceptional education.
the treasury market is thin lulz
Goldman watch, Dimon ring,
I ain't missin' not a single thing.
White House cuff links, stick pin,
When I step out I'm gonna do you in.
They come runnin' just as fast as they can
'Cause algoz go crazy 'bout a sharp dressed man.
Top coat, top hat,
I don't worry 'cause my wallet's phat.
Black shades, white gloves,
Lookin' sharp and lookin' for love.
They come runnin' just as fast as they can
'Cause algoz crazy 'bout a sharp dressed man.
This is what happens when natural mean reversion is defied.
It works until it doesn't for one reason or another and fractal mathmatics reasserts itself.
Taleb et.al. would laugh at this shit -and place an 'outlier' bet.
Taleb et. al.'s lives won't be 'millions of years'; but some of their bets pay off -which simple means that their math is more realistic in practice due to their accounting for the insistence of interventionism specifically and the unaccounted fractal geometric instabilites in market behaviors in general...
wow, I gotta stop smoking so much of this shit....I almost understand what you are saying...
Maybe if you smoked more???
Just a thought.
Just push it moar! Let's see, 10+ standard deviations becomes normal, so now we need 50+ standard deviations. Nothing to see here, just normal chart building.
Oh, yeah, sure...Dimon has no idea where these 6,7,8 sigma events are coming from.
I think it's not too much of a conspiracy stretch to speculate that he's one of the FED flunkies causing these events, and all of it - just to make the dollar look good.
I'll keep asking the trillion dollar question - "Who dumps billions in notional gold at illiquid times in the market when they would be trying (ya think) to get the best price for their assets/property/security?" SEC? FED? CFTC? Anyone?
… calm down, EVERYONE !
China promises they’ll bail us ALL out !
Their models are wrong. These are the same guys who said property values could not decrease and intrest rates couldnt go negative. Subprime is contained. 125% mortgages are a good thing. Student debt is managable and you need to spend more money to keep from going broke.
garbage in, garbage out. There is something wrong but citi has zero credibility for predicting it.
It's kind of like saying that Joe's odds of being hit by lightning are very low, and then creating a lightning machine and turning it on Joe. Then writing an article about how unlikely it was that Joe was hit by lightning, and that it must mean something (while not mentioning that you built a lightning machine and hit Joe with it).
Great analogy. Made me laugh too.
Lol...
Models only work for a while, when things are most predictable anyway. When you truly understand ALL paper financial transactions are nothing but promises, you realize the models are never going to work over the long haul. The point is: how do you program a computer to know who is NOT going to keep their promises. I know all about odds, but even the Nobel winners at LTCM failed. No one knows when someone decides NOT to keep their promises. Booms are when promises are kept and more promises thus made. Depressions are when promises are not kept, and fewer promises get made. It really is that simple.
Statistics about occurances are based on probability distributions.
We don't know of a distribution that covers manipulation....
Sure we do: pr(littl_guy<-by TPTB)=1.000
The variables are assigned by smart people who really can't account for every variable. Its only a rare statistical event if it happens if your assumptions are correct....if your assumptions are wrong then the statistical event that has transpired is meaningless. With all the brains, quants and sophisitcated models out there, who was able to see the meltdown coming in 08'? Theses guys are all just bullsitters using fancy math for their own ends. DImon wants to lower reserve levels for TBTF banks so he screams about liquidity and scary events and swears the best way to reduce risk is to lower capital reserves. Its all bullshit. He wants to lower reserves so he can leverage even more, take on more risk and make bigger fucking bonuses. These guys no nothing except how to drive with their foot on the gas pedal to the floor until it crashes or blows up...in the meanwhile they make big bucks which are stored away and protected from any big crash. When the crash finally happens they will be masters of the universe.
Give me 2 simultaneous equations with 2 variables - I'm good.
Give me 3 simultaneous equations with 3 variables - I'm OK
Give me 4 simultaneous equations with 4 variables - I can do it but it's seriously tedious.
5 & 5 - sod that.
It soon becomes intractable.
Economists just bullshit their way through the complexity by making 'assumptions' and, to use a cliche I don't really like, but here it fits, - Assume - makes an ass out of u and me.
Money backed by something tangible would sort out all kinds of human problems.
What We Can Learn From The Stock Market Genius That Wall Street Loves to Ignore
http://moneymorning.com/2010/10/20/stock-market-genius/
Mandelbrot went to the trouble of actually measuring the behavior of market prices (with no data services and primitive computers, this was much more work than it would be today). His study covered cotton prices, for which a century-long data series already existed.
He discovered that price movements did follow a normal ("bell curve") distribution – and noted that big jumps were far more common than the Gaussian theory dictated. In technical terms, cotton prices obeyed a Pareto-Levy distribution with "alpha" of 1.7 – instead of the bell-curve alpha of 2.0.
Mandelbrot got no thanks from the Modern Finance guys. While seven of them went on to win Nobel prizes, Mandelbrot's job offer from the University of Chicago was rescinded. The poor chap had to go and work for an industrial research operation … at button-down International Business Machines Corp. (NYSE: IBM), no less. He was actually 75 before he got his first tenured academic position – at Yale in 1999.
Mandelbrot's 1982 magnum opus – "The Fractal Geometry of Nature" – contained a defiant chapter on how stock markets failed to behave as the theorists claimed.
In theory, for instance, big market crashes should never happen. That's because the "tails" in a bell-curve distribution are so thin, meaning the probability of such a market collapse should be infinitesimal.
As we all know, however, that's just not the case. In fact, according to Mandelbrot, a market crash should occur about once a decade.
Given the fact that we've had major crashes in 1987, 1998 and 2008 – roughly once a decade – it's clear that Mandelbrot made a pretty good prediction.
Meanwhile, the Nobel Prize-winning Modern Finance theorists want on invent stuff that Mandelbrot had already proved to be completely wrong.
Thanks for the information!
Right guys always labor in obscurity.
And we are not even talking about cuff links yet.
one guy who called it: verbewarp.blogspot.com
Global Economic Collapse, 7/29/2006
Special cause variation caused by some very special people...
What could go wrong when all central banks connect market software to infinite fiat?
With fiat currency and computer bits in the hands of human predators who can create and distribute them at whim, at zero cost, with zero effort, with zero production, with zero savings...
... no reason once in a billion events can't happen every day.
-----
However, there have been consequences... massive consequences. And those consequences are starting to get outta hand.
Get ready for:
#1: Collapse (happening).
#2: Deflation (very short term).
#3: Hysterical response (hyper-printing).
#4: Currency crises and huge inflation (2016~2020).
#5: Other consequences you really don't want to think about.
You should expand on #5, since everyone here has orgasms just thinking how much their gold will be worth.
Wait, allow me: HYPERINFLATION: no food, no EBT card that buys food= riots=looting. What happens when the food from the stores are gone? A:They'll go door to door. Depending on the time frame of the currency crises the PTB want, I'm thinking canabalism, especially up north where it gets mightly cold in the winter.
Burning barrels with people using news papers and garbage bags to keep warm. Watch Escape From New York to get a taste of the inevitability.
Long pork barbq.
I'm well 'up north' but that might turn out to be a good thing.
Spend as much time as possible out and about, hiking & biking.
Cycle every day - 365 - in Canada. Not unusual for me to be out hiking/biking in -35ºC
Snow shoes are seriously handy things.
I make bows, my own arrows & strings - decent shot too.
Hope it never gets so bad these things are required.
If it does, gold will just be dead weight, but anything short of that and it will definitely be better than paper.
Probably won't get so bad in Canada as in the US, mainly because you guys are more civilized.
That and you have less EBT jungle bunnies runting every 5 days.
"Probably won't get so bad in Canada as in the US, mainly because you guys are more civilized. "
.
You're kidding, right?
No I'm not asshole.
That was uncalled for. I didn't see anyone calling you a "knot asshole," though the visual imagery is interesting.
'Civilised' is just a word meaning: derivatives of ruthlessness.
if it comes to canabalism, I just want everyone here to know, I prefer white meat.
!!!!????####
would white meat be the arms and the dark meat be the legs like chicken.
If you have been watching Bill Holter lately, he quipped that if, and a big if; Fort Knox has the reported and/or assumed +8000 metric tonnes, then the real price of gold would be ~50k per oz. So logical extrapolation would then suggest that KY has no gold in the vaults. No one, not even China and Russia could afford to horde gold, and we probably would not be discussing this, because we would have market stability, and there would be jobs a plenty for everyone that wanted a [good] job, with good pay and other compensation(s).
Now to expand on #5, either watch "The Road" with Viggo Mortensen, or play Fallout 3 and Fallout: New Vegas .. (I do wonder if Fallout 4 will actually make it to the publisher in Nov.)
A solution and/or "fix" (post collapse of course), one was presented before Sept. 2006, and again in 2010, to the very highest levels of govt, and ignored to date ..
http://wantarevelations.com/2014/01/wanta-plan-macro-financial-economic-...
No need to worry. You can go live in a FEMA camp where they'll have a never-ending supply of solyent green. So you won't starve.
So... no need to knowingly adopt cannibalism.
And Whale Oil.
gold ring = kilo red potatos?
But Bernanke said that the chance of hyperinflation is 0%.
Ann, thanks for the list, but I need more info on the "happening" collapse, how you define "very short term" deflation and especially, #5 the other consequences.
I'll play along with the collapse happening in real time, especially in places like Greece and Brazil. Certainly, everyone should concur that the US is probably going to be last on a long list of collapse scenarios.
As far as the deflation is concerned, I'm actually loving every minute of it, since it is happening very gradually and in select areas (see: commodities). I believe you don't have dollar stores where you are, but you should see what $10 can buy in these places. Inflation and deflation, from an individual perspective, can be effectively countered by being aware and buying and/or selling at inflection points, or, at least near them.
If, by very short term deflation you mean the three year slide in the price of silver (in US$, per Dennis Gartman, of course), then longer term would be decades, so I'll live with very short term deflation if that is 3-5 years. It's manageable.
Now, the issue I have with #3, hyper-printing, is that the central banksters have had the pedal to the metal for nearly 8 years and they can't seem to get the "ultra-rational" inflationary response, which is really pissing them off. But, there's a simple explanation for that, called "normal human behavior," or, what I like to call, the Ward Cleaver effect.
Ward Cleaver was the dad on the show, Leave It to Beaver, and, I gotta tell you, ward was a serious financial planner in his day. Ward was constantly frugal and thrifty, and, if Ward were to be presented with low interest or 0% interest credit cards, he would use them, but, he would also - since in this 0% interest and semi-static deflationary environment goods are as cheap or cheaper than the money - have some extra to pay back the principal and being no vig, or interest, he'd be smart and right and liquid. Ward probably owned some gold.
Fast forward to the 21st century and we find that Ward's behavior and that of millions of frugal middle-class folks who lived through the depression has not been lost, but rather, embraced. The Fed and other CBs create debt, people use the money, but - and here is what is pissing off the CBs - people are extinguishing the debt just as quickly.
Now, maybe this won't last forever, and surely there are plenty of morons (see: student loans, car loans, high housing prices) who will get caught up in the debt traps, but, overall, the hyper-printing has been a non-or-sero-sum event.
As for #4, currency crisescome and go, and people manage, albeit some better than others.
Overall, I believe that the world is going to hell in a handbasket, but, those of us who have been good Boy Scouts (be prepared) will survive better than others.
Bottom line, #1 is sporadic, and geographic; the timeline for #2 is longer than you think; #3 has been a failure; and I'm not buying into #4 and #5, because I don't see them happening, at least not where I live.
But, I will still respect you when it's all over, when the economy - to use Fedspeak - is "normalized."
By "short term deflation" I mean something like what happened in 2008/2009 to the housing market and stock market in terms of time (how long it lasts), but in far more than those two markets this time. Anything with significant debt involved will be clobbered worse, because margin calls will wipe most folks out (who have them), and millions will walk away from their under-water homes.
The federal reserve will respond by printing trillions and handing it to the huge banks who are in fact some of the owners of the federal reserve itself. The one and only job of the federal reserve is to serve their owners... PERIOD.
But the collapse will be so much worse, the federal reserve will have to print even more egregiously this time. And as the tens of trillions of dollars lying around the globe realize the value of the dollar is collapsing, they'll send them back to the USSA, which will begin the hyperinflationary spiral.
Though it is possible... for a while... that it won't quite reach literal hyperinflation, but at least very high inflation.
The apparent "deflation" in the price of precious metals is manipulation, not "deflation". Once physical cannot be delivered (coming soon, probably this year), the precious metals will take off like a rocket. I expect this to begin while the deflation I mentioned is happening.
As for debt that causes problems, worry more about government debt. At some point, interest rates will rise while government spending explodes "to prevent the collapse and depression". This will cause enormous dislocations in credit markets, and require the federal reserve essentially finance the entire federal government.
Of course the longer term is more difficult to characterize precisely (and guess the timing right), because it depends on exactly what insane measures the central banks and federal government take.
But the predators-that-be are outright predators, they've purchased and distributed billions of bullets to government agencies, militarized the police, are training the troops to sweep up citizens now in Jade Helm, and getting ready to utterly destroy the population of the USSA.
And when the bank accounts of everyone vanish... well... just try to imagine what happens next.
Glad I'm nowhere near the evil empire any more.
#5 - some may have spent a great deal of time thinking about it, training for it.
Hi! Ho! The Derry! O, a-hunting we will go!
'Something is incredibly wrong'.
But we all know what is wrong.
If things get any cheerier around here I'm gonna have to cut back on the confetti and curly horns.
Fuck, now we need another GDP revision.
There are still groceries on the shelves.
What will I do when they come for my food?
From Braveheart: Your f*****.
I don't know how it's going to go down. But if it goes down the way it could...
I bought a baseball bat today, and am probably going to get a knife tomorrow.
I am making sure I can get the kind of knife that can pierce flesh. There is definitely a small one in a local store that could do that, however, I may need a longer one.
I am not muscular so I plan that when the 'jerk' tries to pull the baseball bat out of my hands, I will grapple and seem to pull closer to his body in the wrestle for the baseball bat but in fact will be using the opportunity to stab a concealed knife in his gut.
I reccommend a sword stick.
I have to use a cane anyway,so its always with me.I just ordered a shoulder holster as well.
A gunnery instructor once told me never to let them close enough to need either a knife, or a
pistol to defend yourself.Several hundred yards out is much safer.
Lol, thanks but I'll do fine. I used to study martial arts and have some sort of natural viciousness that will come in handy. (Strong survival instinct.)
Baseball bats are something else. When I first looked at it I can't believe how hard they are. They're HEAVY too. I wonder if the ones they give cinema characters to use are properly weighted. It doesn't feel like you can swing them around like they do in the films.
If you hit someone even lightly with that it will hurt. A good swing will break something. They are much more painful than I subconsciously thought.
Also, another reason I have thought a knife is 'enclosed space.' The front door of where I live is a square cornery sort of thing. The hallway is not large enough to swing a bat unimpinged.
Cricket bats have a nice edge.I don't want to be hit by either, but if I had to choose,
"i'd probably prefer, and survive, the baseball bat.The edge of a cicket bat will crush your skull
on the first swing.
A can of WD-40 and good lighter makes a good B.O.B.
"back off buddy"
Suggest getting real, and thinking about what has really worked over time. Meaning, in battle. Short stabbing sword (Roman-style) and short spear (Zulu-style). Both available on Amazon, decent quality/low price from Cold Steel. If you want to swing (always a dangerous manoever, it's far easier to get inside a swing than it is to avoid a thrust) then a cutlass, also available as above.
There's a reason Roman soldiers weren't armed with clubs, and it's not that they hadn't invented baseball bats.
And knives, think about cutting, not stabbing. Razor-sharp carbon steel. A single slash most anywhere puts someone out of action. Not so with stabbing.
Don't bring a bat to a gun fight.
Gunny was correct.
Handguns are good for two things: gas station stickups and blowing your own brains out when your red hot rifle is out of ammunition and they've managed to surround you.
Dont forget the pepper spray.
Aaaah, "hand to hand" comment threads....
It's been a looong time zerohedge.....
"It'll knock stuff out really quick."
https://www.youtube.com/watch?v=OVxQR1j0yQs
It's called manipulation.
Fug it! throw on some Les Claypool and remember its Friday night....four foot shack, and all is right with the world.....at least for a while.
The Gaussian aka Normal Distribution is meaningless unless the changes observed are all the result of random, but even more importantly, uncorrelated events.
But everyone knows that buying triggers buying, and selling creates selling.
Not only are price changes non-random, but they're highly correlated!
So this is all utter nonsense because calculating these sigmas is based on the assumption that price changes are random events.
Price changes are not the result of "random walks"!
Just so.
Statistical analysis is rarely useful for study of markets, particle physics, medicine, or astronomy, although it is constantly abused in all of those areas. The problems are legion, interaction of variables, lack of random selection, observer bias, ex post facto studies (the result is known already) and above all - models that drive the process.
We should use stat responsibly, not for headlines or shock value.
There is large amounts of money to be made finding vilolations to those assumptions in a world built on models which assume those models to be true. They need to be smarter than me, but hats off to those that can.
BLEEP BLOOP BLEEP! TRADERBOT_V2.67 JUST PURCHASED 5000 SHARES OF AAPL. BUY BUY BUY! BLEEP BLEEP BLOOP!
Yup, and maybe 1 person in 10,000 understands that.
That's why Dimon and others can keep blabbering bullshit about standard deviations.
But likely David Viniar will never be topped, when he stated "We were seeing things that were 25 standard deviation moves, several days in a row"
If that doesn't tell you your models are garbage, I don't know what will.
The question for us is when the market (DOW) does gap down to say, 381.17… will we be able to buy or will we be locked out….
Jesus, some of y'all need to go out and get a beer.. Chill the fuck out and get back at it Monday.
The best hookers aren’t out until after darkness falls.
Boots and Pants (10 Hours)
https://www.youtube.com/watch?v=CF9Z_wnmnc4
Wrong, the best hookers work during the day out of their home.
Wrong, the best hookers work during the day out of their home.
damn I erfed again
Its just the cat.
I’m smart investing this time. I put all my ducats into managed index funds. They said leveraged was the best.
Hell, yea! Sky’in, baby!
Road Runner Show TV Theme Original Opening
https://www.youtube.com/watch?v=OwYQsZuh2CM
Only market I care about is the one where I buy my groceries.
This fucker can blow up and take Wall Street down to Skid Row...that actually would be nice.
That's still a 'market' though. Not a 'financial system'.
This is something I (and Tyler, who mentioned large STDDEV moves years ago, its one of the things that kept me interested in ZH) picked up on when it first started happening.
While Citi is all wet with the late warning, the key to understanding this is recognizing it applies to natual distributions. The stats for truly free markets usually have this distribution, but the stronger the level of control an external influence has, the less random the "noise" of market variations. High standard-deviation moves are just a gigantic flashing sign that the markets are being manipulated.
I'm sure TPTB find it frustrating that they have to game so many variables at once that it's impossible to hide, but they rely on friends in the media, industry and especially central banks to wave their hands and pretend it all away.
Thanks for posting this Tyler.
Just to give some frame of reference: A 5 sigma move is equivalent to a probability of 5.733x10-7, or 1 in 5.7 million.
A 9 sigma move (as seen in gold above) is outside the realm of anything realistic because the erf function starts misbehaving below 8.
But, if we choose an 8 sigma event just for kicks, the odds of that happening are equivalent to a probability of 1.22x10-15, or 1 in 1.22 quadrillion. To put it another way in percent, the chance of an 8 sigma event occuring is 0.000000000000122%. And I haven't even looked at a 9 sigma event !!!!!
For ANYONE to say markets are not manipulated means they are in deep denial over the natural laws of both physics and math.
as a Guestimate maybe 1 standard deviation for 10 Year might be .5%, so 7 Time .5 would be 3.5% Move in 10 Year in a Day??
Yeah stock market has big ups and downs, but depending on the population survey for S&P 500, hm... well this year has been low volatility... still we didn't see many circuit breakers except for flash crash or single transaction error... or whatever the official narrative was.
So with circuit breakers, little closing of the S&P 500, maybe 3% market move would be 1 standard deviation? 3% time 7 would be 21%... but I didn't see any 21% moves.
I'm not a finance guy as you can tell.
I'm just not sure what the author is looking at as STDV.
Q: Maybe this is all about HFT and algo trading?
damn, I just erfed in the toilet. got to drink more.
It's all very well to talk of 7-sigma or 8-sigma events, but here's the thing: if a guy walked up to the craps table in a casino and rolled "7" twenty-five times in a row, and if he repeated this performance several nights a week for a month, you wouldn't say, "Gee, these once-in-a-billion-years events seem to be happening rather frequently." You would say, "Those dice are loaded."
And when the market dice are loaded, an event that should be extremely unlikely (e.g. gold falls $50 in 30 seconds) becomes an absolute certainty.
Destiny plays with trick dice...
Nice Nope
To use x-sigma to describe what is happening in this world is a poor application of statistics. A standard deviation is used to describe a displacement of a metric that is normally distributed ... the market metrics that are quoted here are definitely not normally distributed and to bring a standard deviation into the discussion is misleading. The market metrics display random walk characteristics in the short term and trend or directed metrics in the long term.
All this being said ... It is a certainty that the markets are manipulated.
Agree, but historically markets have never had these types of moves. I do admit, however, that I was not alive in 1929.
Remember that these moves are not historically anomalies, they are only violent aberrations since we are looking at historically low levels of volatility.
If you can fake it, you can make it... THIS will take you only so far.....
What the hell is he talking about 7 Standard Deviations on 10 Year Bond and S&P 500?
Someone else here probably understands this.
I just saw charts from Jeff Gundlach that looked like 2% - 3% on the 10 Year had been going on for like 2 years (data 8 months old).
http://www.businessinsider.com/jeffrey-gundlach-webcast-december-9-2014-12
http://www.treasury.gov/resource-center/data-chart-center/interest-rates...
Statistical theories have become theories blindly followed by morons who think when something is 99.9999 percent sure, it actually means that. Or something that is once in three billion years, actually means that.
They run around thinking it can't happen, it won't happen.... and then it happens.
Guess they didn't tithe enough at the temple of statistics.
Another waste of college $$$ teaching this crap to students and dumbing them down. That's basically what it has become. Use statistics to give you an answer, and blindly follow it.
It's one thing to see if it shows you something you didn't think of, or missed. It's another to take it as gospel and apply it anywhere and everywhere as such. So many flawed processes built around bs. It's sad... and if you try to question it in front of these morons, they really get mad like you just cut off the head of a rabbit, stabbed Jesus, and shoved it down his throat. True believers.
Real life however, is 0 or 1.
Memo to the developers of superfast quantum computers: give up on the familiar 1s-and-0s binary system used in conventional computers. By switching to a novel five-state system, you will find it easier to build the staggeringly powerful machines.
So claim Matthew Neeley and colleagues at the University of California, Santa Barbara (UCSB).
So far, the development of quantum computers has followed the traditional binary computing model. This encodes all information using components that can be in two states, either 1 or 0.
But other possibilities exist, Neeley explains. “We could use a ‘trinary’ system with three digits – 0, 1 and 2 – and then the fundamental units would be trinary digits, or trits, that would essentially be three-position switches.” A single “trit” would contain more information a conventional “bit”.
Neeley’s team have now built a quantum computer whose building blocks have five basic states.
Five-state systemUntil now, quantum computers’ basic components have been binary quantum bits – qubits – which encode two states in the quantum spin of atoms, electrons or photons. The ability of such particles to defy everyday logic, and exist in multiple quantum states at once, should one day enable quantum computers to perform vast numbers of calculations simultaneously.
Neeley’s group used a superconducting aluminium and silicon circuit on a sapphire wafer to make five-state qubits, or “qudits”, that operate at 0.025 kelvin.
“There’s more information stored in a qudit than a qubit, so a given computation can be done with fewer qudits,” Neeley told New Scientist.
By firing microwave photons of five different frequencies into the circuit, they were able to encourage it to jump between five discrete energy levels. “We also developed a quantum measuring technique that can distinguish between all of these levels,” says Neeley.
Simultaneous existenceBecause, in probabilistic terms, the qudit’s five quantum states are able to exist simultaneously, the team had a working qudit on their hands.
One qudit alone is of little use, however.
Jonathan Home at the US National Institute of Standards and Technology in Boulder, Colorado, says Neeley’s team needs to extend its basic system in such a way that two or more qudits can transport information between them, which would allow more complex computational operations to be undertaken.
“Designing the sort of system where two qudits interact, but still retain the interesting properties of a five-level system, will be a major challenge,” Home says.
Quantum spiesThe potential power of quantum computers means has attracted the interest of the US Intelligence Advanced Research Projects Agency (IARPA), which hopes to use them to break codes.
Home’s team has received funding from the agency to work on a room-temperature quantum computer that allows binary qubits to interact and swap information.
Their latest results show that magnesium ions can be used to stop the qubits destabilising one another by transferring heat as well as their quantum states.
The trick, reported in this week’s Science (DOI: 10.1126/science.1177077) is to use serried ranks of trapped beryllium ions as the qubits, while using neighbouring magnesium ions to absorb any heat. The heat would normally destroy quantum information as it is transported between them.
“This will pave the way to large-scale quantum computing, because it addresses the major task: information transport,” says Home.
[New Scientist, 2009]
"Real life however, is 0 or 1."
Despite trader1' s excellent quantum synopsis, popular culture demands at least 50 shades of gray.
Experience tells me that there are many more; none of us is impeccable in our manner or judgement and since , for the time being, our mathematics and its derivatives are man created, we can expect less than perfection from them as well.
Then you have exploitative ass holes, using mathematical models to justify a predetermined outcome. Garbage in, Garbage out.....
There is no practical way to judge the result of alot of the statistical mess that is thrown against the wall as a trend or fact. There isn't enough time or the ambition to look at its origin or methodology.
It is much easier to use the result and incorporate the information into my personal , intuitive modeling , or deny it and call bullshit.
any formal system will produce true statements which are not provable within the confines of the formal system itself.
They are telegraphing the next implosion which will be the final implosion.
unless humans go extinct, it will not be the final implosion. They will repeat ad infinitum.
When the banks topple there is no more bail in money to prop them up. No payments for goods & services equals supply chain management shutdown and government intervention with FEMA camps for the starving masses to get gruel and a piece of bread before they get their dirt nap via the state. Business cannot function without a well oiled banking system and what we have now is by no means well oiled. Hyperinflation will force a reset that will lead to mass chaos and the ultimate breakdown of society as we know it today. It not a matter of if it will happen when we all know it is happening before our very eyes right now.
you are so ____ N E G A T I V E !!!
The World Bank said coal was no cure for global poverty on Wednesday, rejecting a main industry argument for building new fossil fuel projects in developing countries.
In a rebuff to coal, oil and gas companies, Rachel Kyte, the World Bank climate change envoy, said continued use of coal was exacting a heavy cost on some of the world’s poorest countries, in local health impacts as well as climate change, which is imposing even graver consequences on the developing world.
...
The World Bank sees climate change as a driver of poverty, threatening decades of development.
The international lender has strongly backed efforts to reach a deal in Paris at the end of the year that would limit warming to a rise of 2C (3.6F).
However, even that deal would not do enough to avoid severe consequences for some of the world’s poorest countries, Kyte said.
“Two degrees is not benign,” she said. “It is where we put the line in the sand.”
Fossil fuel companies have pushed back against the notion that climate change is a driver of poverty, arguing instead that the low global prices for coal and oil are a benefit for poor countries.
http://www.theguardian.com/environment/2015/jul/29/world-bank-coal-cure-...
Central planning of the earths climate up next.
Why worry??
Thanks for the Video. Nice and how true.
As far as always thinking positive, I have a huge problem with those who believe we should always think positive and everything will be fine.
So I/O/W I should stand in front of a loaded bazooka and think, this is great! Soon a bazooka round will come out of that thing and hit me square in the chest. Great! Wonderful! Nothing wrong!
Everyone thinking positive all the time will have everyone walking around wearing gas mask with tumors popping out all over our bodies and thinking all is just peachy because, although we can barely walk, we still have our car to get us around.
you could ride a bicycle though...
Please!
The Federal Reserve System is the visible hand of the Invisible Empire picking the pockets of the producers of real wealth. It is the most leviathan parasite engrafted upon—and grafting on—production in the world's history. It is an industrial vampire sucking industry's life blood down its bottomless maw. Its greed is fathomless, its rule is ruthless and its lust for power is insatiate.
It is openly and avowedly run and managed in the interest of a so-called "superior class." It has a cynical contempt for the public—whom it ruthlessly plunders. It believes—and practices the belief—that it was instituted for the promotion and protection of superior privileges; that wealth is produced for its exploitation; that production of values exists for its parasitical plunder; that Shylockery is a virtue and that the fruits of industry belong not to its producers but to its despoilers.
Property-owners, property-earners and property-producers are but its puppets whom it plunders at will.
By monopolizing and juggling money—the mere symbol of wealth—it destroys the value of real wealth.
It has but one interest in the public - whom it queries: "How much will the people stand?"
There is nothing with which to compare it for it stands alone in the world's history as the most gigantic plunderbund ever conceived in predacity's womb. Czardom at its height and Kaiserdom at its zenith never held a tithe of the real power held by the Federal Reserve System.
It is the perfected fruit and flower of financial highbindery, industrial plunderbund and applied Shylockery. Under the cloak and mantle of the law it reaches forth its paws of predacity and pouches filcheries which are simply stupendous.
That is briefly what the much touted and saccharinely adulated Federal Reserve System really is.
Abraham Lincoln, the greatest human intellect which ever functioned on this planet, prophetically drew its portrait in these words: "It (the Civil War) has been indeed a trying hour for the Republic; but I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow and the money power of the country will endeavor to prolong its reign by / working upon the prejudices of the people until all wealth is aggregated in a few hands, and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before even in the midst of the war. God grant that my suspicions may prove groundless."
That is the true portrait, drawn by a master hand, of the Federal Reserve System.
In subsequent years you will see further growth of the monster, its ruthless methods of plunder, its machinery of despoilment, its monopoly of money and credit, its pawnbrokery and Shylockery and its huge mounds of pillage.
And in looking it over don't overlook the fact that you, you yourself—whatever may be your part in American industry—are laying tribute on the Federal Reserve altar of Mammon.
You can't escape its net of pillage. Amid its mounds of gold, currency and securities—the hugest ever massed together on this planet—your contribution is there.
Your brain or your brawn, or both, have added to its lootage.
If you live and toil in the U. S. A.—in whatever capacity—your "mickle" adds to the "muckle"—of its stored pillage.
I think I covered all that in the comment 'but we know why'.
I couldn't be bothered to spell it out... Props!
very well stated.
Arrrgh
Take money creation away from bankers.
“The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his boots and the bankers went anew to grab the riches. I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America and use it to systematically corrupt civilization.” Otto von Bismark (1815-1898), German Chancellor, after the Lincoln assassination
Wise and prophetic words.
Why was Lincoln so important?
“The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.” - Abraham Lincoln
Lincoln was assassinated like Kennedy who had the same idea.
Why is it important to take money creation away from bankers?
“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes… Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.” – Napoleon Bonaparte, Emperor of France, 1815
Visit the positive money web site for a sensible alternative to a monetary system where all new money is created from debt at banks.
“Money is a new form of slavery, and distinguishable from the old simply by the fact that it is impersonal – that there is no human relation between master and slave.” Leo Tolstoy, Russian writer.
I think the Greek nation is beginning to get this idea.
We have given bankers the power they now wield so recklessly.
Banks, the banking industry and the monetary system have become a joke.
Banks have become strange hybrid (private/state) institutions where the profits remain in private hands and the losses are socialised.
They need “too big to fail” status because they know they can’t stand on their own two feet in the marketplace and need the crutch of a Government backstop.
It is the nation’s responsibility to recapitalise its banks when bankers have run them into the ground.
The nation has to borrow money from banks and pay interest on those loans.
Banks can only create money from new debt and the world is drowning in debt.
The Central Banks can print money by the trillion to bail out banks but can never contribute a single penny to help the nation’s population.
This is madness.
Governments can create money instead of banks.
The money saved on interest can cut taxes for everyone.
Money can be created to directly help the nation’s population.
Money can be created without increasing debt (positive money).
It is time to end the madness, visit the Positive Money web-site for more details.
"I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America and use it to systematically corrupt civilization.”
and they named this corruption "neo-Liberalism"
(or Neo-Con is there a difference?)
Lincoln was one of the first to assault the Constitution. He was a mixed bag at best. Besides, you want to give credit for ideas of proper money handling to someone, give it to Alexander Hamilton.
Watch the closing scenes of Zeitgeist Moving Forward.
Then go piss on the Lincoln Memorial.
You'll feel revitalized.
The solution is D E B T ___ F O R G I V E N E S S,
both public and private.
what type of person would disapprove of liquidating home mortgage debt?
The Lincoln quote is, unfortunately, bogus.
Sounds good, though he never said that.