Stock market controlled by a visible hand Outside the Box. By Michael Sincere and Pascal Willain BOCA RATON, Fla.
(MarketWatch) — Many investors are confused because the stock market nowadays doesn’t appear to reflect the real economy. It makes you wonder who, if anyone, is controlling this market. The answer: The Fed is in control — at least for now. The market is reacting to the Fed’s monetary easing, keeping interest rates to near zero (since December 2008) and organizing the outright purchase of securities, commonly referred to as quantitative easing .
Fed's bond buying won't help Whatever the Federal Reserve does to lower interest rates further won't help the U.S. economy, according to First Pacific Advisors fund manager Tom Atteberry, who says that'll just weaken the dollar and hurt savers. As a result, the U.S. dollar has fallen in anticipation of the monetary easing. Gold has also soared. Inflation or deflation Meanwhile, many people are wondering if inflation or deflation is more likely. /quotes/zigman/3870025/realtime US : S&P Base CME. The Internalizers and The Flash Crash; Let’s Talk Real Villains. Sal Arnuk Themis Trading LLC 10 Town Square, Suite 100 Chatham, NJ 07928 973-665-9600 www.ThemisTrading.com By now every world citizen who has ever owned any stock knows “Waddell” as a household word.
The regulators do not name them specifically in their October 1st SEC/CFTC Flash Crash Report (available here), yet the firm’s identity might just top the world’s worst-kept-secret list. If there were not enough references to Waddell and Reed over the weekend on Twitter and thousands of blogs, Dave Cummings, owner the HFT powerhouse Tradebot may have rectified that with his letter to the street, titled “Waddell Stupidity Caused The Crash” (available here). Waddell is blamed for unleashing an algorithmic percentage-of-volume order to sell 75,000 E-Minis that everyone seems to be crediting for the Flash Crash.
Don’t take the bait. . - 35,000 contracts were sold on the ways down; 40,000 were sold on the rebound after the CME’s 5 second trading pause. Even more disturbing was this: Sal L. Earnings Guidance Calendar. Historical Recessions vs S&P, 1870-2010. A Note On Currency Wars. I’ve seen a number of people — most recently, Yglesias — suggesting that mutual attempts by major economies to depreciate their currencies could be really helpful right now.
The intuition seems clear: it gets countries printing money; and there’s also the historical argument by Eichengreen that competitive devaluation in the 1930s was actually quite helpful. But I don’t think this argument really works — at least not as phrased. The hypothesized currency war in which the Fed buys euros and the ECB buys dollars might not do any harm, but it probably wouldn’t help, either. Why? In the 1930s, competitive devaluation mattered largely because a number of countries were still on the gold standard, and were keeping interest rates well above the zero lower bound in an attempt to preserve their gold reserves.
Today there’s nothing like that, and rates are pretty much at zero. So a wave of mutual currency purchases would be harmless but also pointless. Waddell & Reed Trades Said to Help Spur May 6 Crash. Flash Crash. By Barry Ritholtz - September 27th, 2010, 5:48pm Nanex, via Marketbeat, gives us this graphical look at the Flash Crash: click for ginormous charts Category: Markets, Trading.
Fiscal. Yahoo! Finance - Business Finance, Stock Market, Quotes, News. National Australia Bank Drops Forecast Aussie to Reach Parity -
Euro Falls for 2nd Day on Concern Europe Debt Crisis Spreading - Understand How Products Impact Stock Prices. Trading. Investment Content / Resources. Dark Pool.