Perry Glasser

ROLLERCOASTER APOLOGISTS AT THE SPEED OF LIGHT

In Business, Economics, Economy, EDUCATION, Finance, Personal Finance, Politics, Wall Street on August 11, 2011 at 5:10 pm

Investor

After 4 days of 4-5% swings of the Dow Jones Industrial Average, expect to hear some uber-Wizard on TV or radio explaining why these things happen daily.  Wizards sell common knowledge dressed to appear as wisdom, and when they don’t know WTF is going on, they still feel compelled to excrete advice, no matter how inane.

Citizens with the bad luck to have the car radio tuned to the news station will hear some Wizard identify some economic news as the culprit.  They will point to  a jobs report, an earnings report by a large corporation, a political event, or some other “cause” of stock market perturbations. Sometimes the network news stations will feel compelled to march out  a talking head for a 3-minute segment of free wisdom.

There is no record of any Wizard ever on camera confessing , “Beats the living shit out of me.”

Dollar$ notes that even a moment’s thought by even the financially unsophisticated will reveal that such alleged wisdom smells like the stuff that drops from the rear of barnyard animals.

Poof-Slinky Co.

The suggestion that major swings in the markets are caused by sentiment is by itself idiocy. “By some estimates, computer-aided high-frequency trading now accounts for about 70 percent of total trade volume.”

Algorithms on big honkin’ computers buy and sell securities and security derivatives all day long, drive volume figures sky high, hedge those trades with even more arcane derivatives, and are able to place those transactions on exchanges all over the world.

So much for the open market and level playing field–unless of course you as a Citizen never sleep and have direct access to markets.  Most of us aren’t even allowed to trade “safe” mutual funds until 4 o’clock.

For  super computers, the markets  never close, and differences of an eighth of a point from Dusseldorf to Shanghai will move millions of shares in less time that it takes you to read this sentence. That’s Mr. Machine work at light speed!

Wall Street Prognosticator

There is no market sentiment at work. Wizards just want you to think that the market is inhabited by humans. Ho Ho Ho.

Look, if the fate of French banks was  a concern two days ago, how did that concern vanish over night? If rioting in Greece sent the markets into a tailspin last week, what fundamental change in the Greek economy happened this week?

Wizards have to have  something to say, otherwise Citizens might stop paying outrageous fees for bad advice.

What the apologists won’t talk about is what they think is REALLY true. “My algorithm can beat up your algorithm.”

If they talked about that, the boss might take their bonus, and with it the house in the Hamptons, Junior’s tuition at Yale, and that oh-so-special gold key to the Executive Crapper.

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