Perry Glasser

Posts Tagged ‘markets’

CONSPIRACY THEORY

In Business, Economics, Economy, Finance, Political Economy, Politics, Wall Street on February 12, 2016 at 1:09 pm
Janet Yellen

Wizard-in-Chief

Dollar$, always eager to explain the inexplicable world of Finance, that realm in which Wall Street Wizards and Corporate Buccaneers run rampant in their never-ending struggle to own, pervert, master, and control Political Weasels, has developed a theory.

 

Why should Plain Money Talk  be any different from every other blog?

 FACTS

2015 saw:

  • unemployment drop to new lows,
  • minimum wage adjusted up,
  • auto sales rise to recent highs,
  • home sales rise to recent highs with no speculative bubble,
  • the cost of gasoline and heating oil sink to new lows,
  • the United States become an oil exporter.

The Fed is so concerned at all this good news that Janet Yellen has begun to tighte credit, a tactic employed to throttle growth and forestall inflation. Yes, the Wizard-in-Chief, Janet Yellen, is worried things are too good.

Some apologist is sure to point out that the second largest economy in the world, China, is hurting. Dollar$ will give that point of view some quick attention.

CHINA

China’s weakening economy should mean the cost of living in the US will drop, meaning you and I will have more money in our pockets to pay off debt or buy more stuff, everything from furniture to T-shirts at Wal-Mart. The US – China trade balance is heavily weighted toward China—the US imports far more goods from China than China imports from the US. If those good become less expensive, the American consumer benefits. This does NOT harm American business.  Maintaining profit margins at lower prices is easy to do. The cost of commodities the world over is dropping because of the slowdown in Chinese demand. Commodities are the stuff that comes out of the ground from tin to lumber and to gold, the stuff from which everything else is made. Everything should be getting cheaper. Every time Wizards predict that Apple will stop selling iPhones in Shanghai, Apple sells another few million units, but at a lesser price. With inexpensive gasoline, Citizens will be driving  to Disneyworld this year, and they will be able to afford the Mouse’s uptick in prices.

This phenomenon confounds the Wizards., who have learned that bad predictions are clickbait, and clicks drive revenues. No one watches CNN until the shit hits the fan and the shelter under the table grows crowded and cramped.

In the face of positive economic news, the US stock market should be soaring. Instead, the Dow-Jones average has stepped off a cliff in 2016, shedding 2,000 points in 8 weeks, more than a trillion dollars worth of value has been erased from the books.

THE CONSPIRACY

Cui bono?

For the past 30 years,  at every presidential election, commentators complained of the choice between Tweedledee and Tweedledum. But this year, it ain’t so.

weasel candidates in days of yore.

US Presidential Candidates Since 1964

 

This year, on the one hand, we have a wealthy, self-funded foul-mouthed injudicious narcissist celebrity never elected to anything anywhere who is much favored by people who have felt disenfranchised for a generation. On the other hand, we have a New York Jew now from Vermont who has never accepted a dime from Buccaneers or Wizards. An older man, his followers are youth because he demands payback from the banks and companies who were too big to fail and in the past 20 years have sucked the economy dry, indenturing students with education debt. On the third hand, we have a woman who is indebted to the old politics, and on the fourth hand, we have a clown car of interchangeable Republicans who lacking economic issues promise to disallow what your neighbors do in their bedrooms while coyly ignoring that for those promises to be fulfilled they will have to rollback several Supreme Court decisions by what by any account has been a conservative court.

Dollar$ sees the common threat. The two leading candidates are not in thrall to Wizard or Buccaneers. Should either get elected, the summer house in the Hamptons, the private jet, and the 10-room Manhattan  condo are all in jeopardy.

How to dissuade Citizens from voting for either?

Scare the piss out of them. Scare the piss out of them by manipulating stock prices downward. It’s only temporary, and it’s not as tricky as it sounds.

  • Claim good news is bad.
  • Threaten us with defunded pensions, evaporating college savings, and the elimination of savings toward the American Dream, a house.
  • Imply that unless Citizens vote the status quo and allow rapacious policies to continue, grass will grow on Main Street as economic activity collapses.

The stock markets should be soaring, but never forget that 90 percent of all trading is electronic and that computer algorithms engage in a global battle to take advantage of a quarter point’s worth of arbitrage. There is no longer any such thing as investor sentiment. As they now say in Wizard country, My algorithm can beat up your algorithm!

Fear is the most potent means of keeping the harridans out of the White House. Without the creation of synthetic Terror, Weasel Business As Usual will come to a halt.

O the horror!

 

TANSTAAFL – PREDICTIONS 2011-2015

In Business on January 3, 2011 at 7:49 pm

The US economy will get worse, and permanently so.

Our kids are the first generation in history to expect worse lives than their parents–this is how the economy retracts.

Fact is, we have funded 10 years of war without paying for it–all on debt obligations–which is how one deceives the public into thinking it is “free.”  Sorry Obama and Bush – TANSTAAFL.

The expense does not appear on the budget–just the loan service fees do. Every man, woman and child in the US owes more than $30,000, and that’s predicted to rise by 50% in 10 years.

It’s not sustainable because  money borrowed for investments is  expected to produce a return greater than the amount borrowed: money spent on warfare brings no capital return at all. Two wars, 10+ years each–the holders of our notes–oil emirates, China, and very large pension plans, are getting nervous about our ability to pay. What if the US, like some South American country restructures debt? What if we simply print the cash we need and pay off with dollars worth far less than the dollars we borrowed?

Neither of these scenarios is terribly likely, but if you were a money manager in China, you’d reduce your exposure to dollars. The only currency worse than the dollar is the euro because a generation of quasi-socialist states have made easy lives fo people in Spain, Greece, Portugal, etc. Instead of warfare, they’ve borrowed for the easy life. When your population retires at age 50, either your youth has to be amazingly productive or you population has to have the good grace to drop dead young. If the world moves to the yuan because the Chinese economy is in growth mode while the rest of the capitalist west is in contraction, we’ll first see economic suffering in the US and then the belligerence and the kind of social unrest that led to WW II.

We are already seeing the earliest signs of fascism, the very worst of Tea Partiers. There’s nothing wrong with demanding elected officials actually govern–even Obama got that message, though his own party immediately accused him of selling them out–what is scary about American populism is that it has always been about social control. In our times, that means same sex marriage, abortion, and mandatory military service.  Couple that withe 10% unemployment rates that persist for the next five years like a bad sinus condition, and expect torchlight marches.

Stock up on shotguns and canned goods.

Greifeld Makes World Safe for Computers!

In Business, Economics, Economy, Finance, Personal Finance, Wall Street on June 5, 2010 at 10:18 am

Chutzpah Award Winner

In today’s Wall Street Journal, Bob Greifeld, CEO of NASDAQ and Wizard Extraordinaire, Oak Leaf Cluster, writes of the new measures to prevent another Flash Crash.

Greifled assures us, “markets work when a willing buyer and a willing seller come together to determine a fair price. Markets only work when they are continuous and performing. Any intervention must be based on the principles of transparency, fairness, objectivity and sound regulation. …  Our shared objective is to help ensure that investors and listed companies feel confident in the integrity of the prices generated by their equity markets.”

Sounds good, don’t it?

But who are these “investors?” If you ever had any doubt that the mission of the markets was to make the world safe for Buccaneers and Big Money, check out the details. Griefled writes:

  • The triggering price for each Nasdaq-listed security is the price of any execution by Nasdaq in that security within the prior 30 seconds.
  • …the Nasdaq Volatility Guard will trigger a 60-second pause in trading on Nasdaq in the affected security. During the trading pause, Nasdaq will maintain all current quotes and orders and will continue to accept quotes and orders in the security, as well as disseminate an electronic Order Imbalance Indicator every five seconds showing the number of shares and the prices of the shares on the buy and sell side as they converge to a price to open a stock. At the conclusion of the 60-second pause, the security will be re-opened with an auction.

Greifeld concludes, “While no market can guard you from uncertainty, Nasdaq is committed to protecting you from excessive volatility.”

To whom, one can only  wonder, does you refer?  Why, all of us who can respond in 30 seconds. Investors means the 66 percent of all trades done computer-to computer-at light speed.

Feel reassured? Instead of your life savings vanishing in a flash, you’ve got 30 seconds! No one to blame but yourself if you are slow to respond.

All rise!

Bob, you Rascal you! For being First Order Apologist and selling Soft Soap, Bunk, and general B.S. ,a Dollars$ Chutzpah Award to Bob Griefeld!!!

An open market means equal access, as Greifeld knows: suggesting 30 and 60 second safeguards is just contemptuous of traders–the kind who breath air.

Wizards at Work

In Business, Economics, Economy, Finance, Personal Finance, Politics, Wall Street on June 4, 2010 at 10:48 am

Wall Street Wizards are twisting in the wind still trying to figure out what the flash correction was about, knowing full well that if they do not come up with some  preventative measures, they will either get their asses regulated off or Citizens will desert the markets.

Worse, large foreign investors will reduce their exposure to American markets, pulling out their dough, which means the Wizards summer home in the Hamptons may be in jeopardy.

Today’s Wall Street Journal kinda, sorta, almost admits that the alleged transparent and open markets are anything but because 66 percent of all volume is being traded between computers at light speed, based on information no  human could possibly process.

Gee, ya think?

You read it here, first.

And here, second.

Market Drops: Buccaneers Retake the Helm

In Business, Economics, Economy, Finance, Personal Finance, Wall Street on May 7, 2010 at 10:13 pm

It’s been more than a year since I’ve been here, Internet, but I am back, if not by popular demand than by compulsion of circumstances.
Yesterday, May 6, the Dow dropped 1,000 points in seconds—literally— and rebounded 70 percent of that drop in a few minutes. Mr. Toad’s Wild Ride, powered by derivatives, was on!
Today’s financial press is filled with the usual crap explanations prepared by nitwits who ought to know better, but they can’t get viewers or advertisers if they try anything like truth, so they delude themselves and try to delude us. Call them the Handmaidens.
My favorite Handmaid’s Tale is that some fool made a fat-fingered typo that precipitated the drop. Gee, you think the world economy will collapse because of a typo?
The pabulum Handmaid Tales “stories” is mostly about sentiment—fear of default in Greece, worries about terrorists in Times Square, panic, woe. They are soothing, nice little myths designed to make children believe the world is rational and the bad, nasty things will go back under the bed.
The idea is for us to visualize thousands of sellers lunging for their telephones shouting “Sell!” This makes us believe the markets respond to people, and since we all know people can be wrong, there is nothing to worry about.
Puhleaze.
In 1929 and 1932, human sentiment moved markets, but the Handmaidens should by now have noticed that markets now are made and operated by mathematical algorithms being run on networks of computers that at the speed of light buy and sell—mostly derivatives. Why screw with stocks and bonds when you can mess with serious leverage at 100:1. If ten cents can buy you $10,00 worth of anything, why would you screw around with the thing itself?
What does a million dollars worth of derivatives buy?
Control of Haiti, Guatemala, and maybe Greece, too.
When the action between machines is so rapid and so huge that a difference of .0001% on a few billion dollars is a very comfortable day’s pay (a half day if you work for Goldman Sachs), then the machines are going to deal. Buy a billion in New York, sell two billion in Tokyo, settle in Berlin. And all in less time than it takes to read the italics.
If you are in the market—and everyone is, unless their kid’s education money or their 401k is buried in a pillowcase in the backyard—then remember:

SENTIMENT HAS NOTHING TO DO WITH IT!
COMPUTERS DO NOT EXPERIENCE PANIC!
ALGORITHMS DO NOT GIVE A RAT’S ASS ABOUT GREECE!

Reread and memorize.
And know this:  No individual can play or time the markets when the “traders” are soulless machines. You can read analysis and blogs until your eyes bleed–ain’t gonna do you a bit of good. You can’t react that fast. And if you are a day-trader–why not bet on horses? At least you get two whole minutes of action.

Transparency & Deregulation

In Economics, Politics, Wall Street on October 10, 2008 at 1:05 pm

Expect the same financial advisors who once sold their expertise and accepted your assets to manage to be smiling like undertakers and shaking their heads that as a buyer of their services, you should have listened.
We bought their expertise, and when markets rise, they claim to be heroes. When markets sink, howver, they point at us for our ignorance.
Let’s be less ignorant.

TRANSPARENCY

Worshippers at the Holy Open Market like to use the word transparency. Finding this word in the mouth of Weasels and Bucanneers is a lot like finding a nail in your breakfast cereal. After initial revulsion, a Citizen asks: How did this get there?
When political Weasels cannot find a reason to educate American children to basic financial concepts, they leave us at the mercy of financial Buccaneers.
Worse, when Weasels, Wizards, and Buccaneers collaborate in designing an arcane vocabulary to cloud transparency, allegedly transparent markets are in fact con games. Blowing smoke is blowing smoke, and doing so deliberately is called “fraud.”
An open market requires buyers and sellers be equal parties. Either has to be able to walk away and say, “No deal.” Captive buyers are not members of a free market economy–they are its victims. When Weasels allow:

  • old age to be a time of terror by allowing what were private pensions to become 401k investment vehicles;
  • when Buccaneers are allowed to restructure and cancel what were solemn covenants between workers and corporations to improve profits;
  • when Buccaneers rake 500 and 1,00 times the compensation of line-workers;
  • when employment is the only means to obtain subsidized health insurance;
  • when healthcare is not a universal right;
  • when 23 percent of every healthcare dollar spent in America goes to non-providers called “insurance companies”;
  • when retirement vehicles that are allegedly conservative are managed by Buccaneers and Wizards who wrap that vehicle in rhetorical gobbledygook deliberately designed to obscure the vehicle’s true nature;
    Such a market is far from open. No amount of transparency will remedy that.

DEREGULATION

Weasels who philosophically embrace deregulation do so as a rhetorcial dodge. Dollar$ No BS translation: deregulation = The strong shall no longer protect the weak.
Proponents of deregulation whine that regulation limits (gasp!) profits: they do so while standing in the ruins of the American economy, an embarrassment to their teachers at Yale, Harvard and other leadership factories where History was taught.
Regulations were created  in response to bitter lessons. While times indeed change, no one has yet repealed the Business Cycle–Boom, Panic, Depression. Regulations were designed to smooth those cycles out–never to eliminate them. Wizards and Buccanners who dismantled the regulatory system to earn an extra buck have pushed the world economy over the brink.
Wizards engaged in inventing new financial vehicles are NOT engaged in financial innovation, but in brinksmanship. Their chief tool is faster than light computing; they are in and out of highly leveraged vehicles in minutes. Markets were created for human interaction, not for a war of algorithms.
Dollar$ No BS translation financial innovation = promoting a financial vehicle that purportedly does one thing but in fact does another. Thus, Citizens may be deceived and fleeced:

  • Citizens who conservatively save in a money market are dismayed to learn that the Buccaneer in charge has used the Citizens’s money for risky investments. The buck gets broke. The Citizen can’t send his kids to college. The Buccaneer retires to the Caymans
  • Citizens naively believing that the insurance industry is sleepy and safe learn after the fact that credit swaps are insurance on debt, but are called anything but “insurance” to avoid insurance regulations. Shepherds are unaffected; the rest of us are in a worlwide conflagration that will lead to political unrest, totalitarianism, fascism, and the abnegation of human rights.
  • Buccaneers who chafe at short selling regulations induce their Weasel colleagues to change the rules, the uptick rule dating from 1932 is banished, and in 2007 what was once a reasonable tool for hedging risk becomes the naked short, a light-speed computerized lever able to grind a company’s stock into the ground.
  • Weasels garnering votes push the American Dream by forcing Freddie and Fannie to make “subprime” loans, only for Citizens to later agree that “subprime” means “uncreditworthy” and that America itself has been mortgaged. Foreign governments holding American paper start to worry about repayment. The dollar plunges in value and worlwide credit dries up as banks horde cash. Even Georgie’s War on Shepherds seem imperiled.

What’s next? Well, the Chinese curse comes to mind: May you live in interesting times.