Quote Blast Loops May Have Caused Nasdaq Freeze

Nanex did some digging into market data before the Nasdaq blackout at 12:20 EDT on August 22, 2013. They discovered several significant periods of extremely high quote volume. By plotting the number of messages for each of the 6 multicast lines used by the Tape C SIP (Securities Information Processor), we discovered the quote blasts map […]

The Soaring Stock Market

Broad market indicators like the S&P500 have been making all-time nominal highs. What’s the significance of that for investors and the economy? S&P500. Source: Google Finance. Rather than just look at nominal stock prices, it makes more sense to compare the price relative to earnings. Yale Professor Robert Shiller has suggested relating the current inflation-adjusted S&P500 to the […]

Dow 20K – Halfway There

Three years ago I wrote one of my most controversial posts: Dow 20K. The Dow had been toying with the 10,000 mark, after a 10% correction. The news from Europe seemed to be terrible, and everyone was on board with the domino theory. We were in the midst of the worst May since 1940. The most bullish […]

KRUGMAN DOES MMT AGAIN: GOLDBUGS AND BITBUGS

In a very nice piece, Paul Krugman blasts the anti-social orientation of those who tout gold or bitcoins as an alternative to state money (see here). You see, Uncle Sam is hell-bent on generating hyperinflation through President Obama’s run-away deficits and Chairman Bernanke’s money-dumping helicopters. To protect yourself, you need to buy gold and bitcoins—like […]

Nine Trust-Based Problems With Bitcoin

Bitcoin seeks to be an electronic cash (currency) system that doesn’t rely on trust. Paradoxically, Bitcoin requires a trust-based ecosystem. As a brief summary: The Bitcoin system was developed as an electronic currency by Satoshi Nakamoto (apparently, a pseudonym). Bitcoins exist only in the online world (they have no physical form). Each Bitcoin is uniquely […]

The World Has Changed, the International Monetary System Needs Some Serious Re-Thinking

The international monetary system (IMS) is neither preventing currency volatility … On paper, the IMS has to guarantee – with its institutions, policies and conventions – the orderly functioning of transnational financial flows and exchange-rate regimes. Over the past few years, however, most currencies’ exchange-rates fluctuated at an unprecedented pace, hampering capital transfers and commercial […]

Is This Time Different? … No!

There is a growing view that investment returns in financial markets are increasingly driven by central bank policy action rather than fundamentals (such as the macroeconomic outlook, business cycles  and corporate earnings) prompting questions to be raised about the very nature of free market investing. We have already seen the impact of government policy play […]

Mandatory Clearing Looms Large: Will You be Compliant?

Beginning on 11 March 2013, mandatory clearing will be introduced on a phased basis under the Dodd-Frank Act in relation to “Category 1 Entities” executing “Covered Swaps”.  From that day, subject to certain exemptions, it will become unlawful[1]for any Category 1 Entity to engage in any Covered Swap unless the swap in question is submitted […]

Thoughts on the Great Rotation

Reports indicating that Americans have invested more in equity funds here in 2013 than they did all last year have given rise to talk of the “Great Rotation”.  The idea is that Americans are selling fixed income investments bought during the financial crisis and now buying shares. We are less sanguine.  There is a third […]

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