Warren Buffett

China Arrests Three High Frequency Traders For "Destabilizing The Market And Profiting From Volatility"

As the crackdown against Zexi was taking place, Shanghai police also arrested 3 suspects as they cracked a case of stock futures price manipulation involving over 11.3 billion yuan (US$1.8 billion), police said yesterday in a statement. According to Shanghai Daily, Yishidun, a commercial company registered in Jiangsu Province’s Zhangjiagang City in 2012, was found to use an illegal stock futures trading software to destabilize the market and profit from volatility.

The Debate: GOP Candidates Elevated, CNBC Eviscerated

On Wednesday morning a new national poll revealed that 54% of Americans rate the economy as 'poor', but instead of focusing oin that, Becky Quick quizzed Marco Rubio about his 'lack of bookkeeping skills,' Carl Quintanilla posed questions about homosexuality and fantasy football, and the astonishingly incompetent John Harwood expressed doubt about Donald Trump's 'moral authority.' The interaction between the candidates and the CNBC moderators revealed the yawning gap between the bubble world at the intersection of Washington and Wall Street and the hard scrabble reality of economic stagnation and political alienation on main street America.

Truth Is Being Suppressed By The Tools Of Money

Global Capitalism is trapped in its own Prisoner’s Dilemma; fourty four years after the end of the Bretton Woods System global central banks have manipulated the cost of risk in a competition of devaluation leading to a dangerous build up in debt and leverage, lower risk premiums, income disparity, and greater probability of tail events on both sides of the return distribution. Truth is being suppressed by the tools of money. Market behavior has now fully adapted to the expectation of pre-emptive central bank action to crisis creating a dangerous self-reflexivity and moral hazard. Volatility markets are warped in this new reality routinely exhibiting schizophrenic behavior. The tremendous growth of the short volatility complex across all assets, combined with self-reflexive investment strategies, are creating a dangerous ‘shadow convexity’ that will fuel the next hyper-crash.

4 Warnings And Why You Should Pay Attention

No professional or successful investor every bought and held for the long-term without regard, or respect, for the risks that are undertaken. If the professionals are looking at "risk" and planning on how to protect their capital from losses when things go wrong - then why aren't you?  Exactly how many warnings do you need?

The Devil's Dictionary Of Post-Crisis Finance, Part 1

Austerity: Also known as “sado-fiscalism”. A forlorn attempt to stave off government bankruptcy.

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Keynesians: Economists “who hear voices in the air (and) are distilling their frenzy from some academic scribbler of a few years back” (John Maynard Keynes).

From Bezzle To Bummer - The Mirage Of "Psychic" Wealth

The market is prone to temporary fits of shared enthusiasm – for emerging-market debt, for Internet stocks, for residential mortgage-backed securities, for Greek government debt. Traders need not wait to see when or whether the profits materialize. IBGYBG, they say – I’ll be gone, you’ll be gone. There are numerous routes to bezzle and febezzle...  traders borrowed money from the future. And then the future came, as it always does, turning the bezzle into a bummer.

The Second Bullard Rip Dips - They Do Ring A Bell At The Top

That’s what yesterday’s Bullard Rip was all about - it amounted to the bell at the top. In time it will become evident that the market is unable to break-out of the bubble finance channel it has established between 2075 and 2125 over the past year. When December comes around and the Fed has to explain the growing signs of global and domestic recession, the robo-machines will have grown themselves an altogether new set of programs. Namely, an algorithm that says any day the Eccles Building is open for business is a good day to sell.

"Some People Just Don't Fit In The Economy" Buffett Explains: "We'll Send Them Off To Afghanistan"

Not to be outdone by his partner Charlie Munger (who offended many with his comments that "gold is a great thing to sew onto your garments if you're a Jewish family in Vienna in 1939,"), Berkshire Hathaway's Warren Buffett - having already taken on Europe, comparing Greece to a "dog peeing on the carpet" of Europe, suggesting Germany stop "rewarding behavior you want to get rid of" - takes aim at the military. Speaking on Bloomberg TV, the octagenerian oracle of offense just unfriended every American veteran...

"August Sucks" MIT Quant Warns New Strategies "Are Creating Volatility"

"August Sucks," concludes MIT Quant guru Andrew Lo, reflecting on the systematic-trading strategy effects on markets, and it's not going to get better any time soon. As he explains to Bloomberg, "algorithmic trading is speeding up the reaction times of these participants, so that’s the choppiness of the market. Everybody can move to the left side of the boat and the right side of the boat now within minutes as opposed to hours or days." As we have noted many time, Lo explains how "crowded trades have got to the point of alpha becoming beta," warning that volatility-targeting strategies (such as Risk-Parity) are not only "exaggerating the moves," but he cautions omniously reminiscent of the August 2007 quant crash, "I think they are creating volatility of volatility."