The Stock Room page 7
(Continued from page 6)
things actually ‘CREATED’ the underpinnings for the disaster. Those were the beliefs, assumptions, etc. we had all come to accept and live by. BUT, it was the intense abuse of ‘mark to market’ (M2M) by short funds, extensive and uncontrolled rumormongering, no uptick rule, & relentless naked short selling that actually ‘CAUSED’ the disaster. If the short funds hadn't been allowed and promoted by the media to bring everything down so quickly and violently by destroying our confidence, we could have worked things out in a timely manner and prevented all this pain. However, the shorties had already decided that Armageddon was required IMMEDIATELY, and all the future plans to fix the financial system was just a waste of time.
While some still are trying to fix a few of the inadequacies of our investing market system, the above has been lost in our desire to place blame on the CEO’s of the nation and to hail the doomsayers and destroyers as heroes.
apppro’s take for 09/03/2013 09:00 am EST
“The Russians are coming! The Russians are coming!” Syria Peace Plan
Would it be so horrible if we worked WITH Russia and others?
1. Form a 50/50 alliance with Russia (depending on who else joins) to form a Peace Keeping Task Force. Forces would be used to END the fighting ONLY.
2. Current Assad government remains BUT RUSSIA makes them understand there will be NO more fighting or reprisals.
3. Forces remain for 10 years to make sure ALL fighting stops on ALL sides.
4. ALL chemical weapons are exposed and destroyed.
5. ALL rebels are dis-armed with guarantees of NO reprisals.
6. ALL refugees are allowed to return with NO reprisals.
7. ALL TIES BETWEEN SYRIA AND IRAN ARE TERMINATED.
8. ALL TIES BETWEEN SYRIA AND HEZBOLLAH ARE TERMINATED.
9. Arab League brokers FUTURE of Syria with present government and “Free Syrian Army”. NO guarantee of anything except peace.
apppro’s take for 08/16/2013 11:00 am EST
Treasury Interest Rate Basis
New plan: To promote stability and certainty and to actually tie rates directly to actual growth here’s my new plan.
Base ALL rates on calculated Monthly Moving Averages (MMP) of actual final monthly GDP.
30 year Treasury rate would be the LAST 30 year’s average of the confirmed MONTHLY GDP’s. That would mean a 30 year rate would be based on 360 CONFIRMED KNOWN values. 20 year on 240. 10 year on 120… and so on. I’m sure the EXACT figures are available and an exact ratio can then be determined and APPLIED. For example:
GDP * LONG-term Monthly ratio of 10 year rate to GDP = 10 year % Rate
2% * 1.25 = 2.5% 10 year.
Talk about transparency and consistency!
No major fluctuations or major uncertainty. Just a LONG-term valuation based on LONG-term growth (or lack of it). NO SUBJECTIVE HFT ETF INTERPRETATIONS.
Only thing that the Fed would adjust as needed is the ‘Daily Rate”, or Rates based UNDER 1 Year.
apppro’s take for 08/03/2013 08:00 am EST
Dear Loyal Readers,
I’ve received many emails asking why I’ve had no recent rants & ramblings. To all those I must admit I have NO excuse… except for just being lazy. I have been way too involved in TwitLand, and well… 140 characters are just far easier than 2 to 4 hours of writing.
Again, I apologize; but if you need some apppro fix you can always check A Twit’s Thread – it says it all in a “Cliff Notes” format!
apppro’s take for 06/23/2013 08:00 am EST
“I told you so?”
After last Wednesday & Thursday, just how RIGHT was I with my Schrödinger's Cat thesis?
apppro’s take for 06/03/2013 03:00 pm EST
As I said on 05/11/2013 01:30 pm EST, it is OUR actions OUTSIDE of the Fed’s box that will kill the economy LONG before we even think about checking inside. The last week of insanity HFT VIX vs. SPY trading is proof. Even today it’s ridiculous:
Enough with this! As I said before “It’s a Benilock’s economy! ENJOY!”
apppro’s take for 06/03/2013 07:30 am EST
Our “Benilock’s Economy”
Stop fighting it! ENJOY!
Not too hot!
Not too cold!
But just right for 2% growth and to keep the Fed totally committed.
Side note: Boy do I hate to admit it, but the “Evil One’s” prediction of a “New Normal” economy really did pan out. UGH!
apppro’s take for 06/01/2013 07:30 am EST
Just a Disgrace!
Nothing else to say! This chart on what HFT algo’s, weekly options, and a so-called rebalancing (Rebalancing? BS! Gaming by SkyNet of the rebalancing is more like it!) did Friday starting at 2:15 pm says it all. Also, pay close attention at what occurred in last 15 minutes. DISGRACEFUL!
How many people got hurt from this crapolla?
How many businesses decided to put on hold more hiring and spending because of this crapolla?
Implement The 6 Golden Rules NOW!
IF we allow 20 minutes of machine and trader’s/traitor’s insanity to destroy what economic good has been accomplished over the past 5 years… well, if we allow that than we all should be ashamed.
apppro’s take for 05/25/2013 09:30 am EST
The ETFing of our markets & economy!
Investopedia: Definition of 'Exchange-Traded Fund - ETF'
“A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.”
Wikipedia: Investment uses
“ETFs generally provide the easy diversification, low expense ratios, and tax efficiency of index funds, while still maintaining all the features of ordinary stock, such as limit orders, short selling, and options. Because ETFs can be economically acquired, held, and disposed of, some investors invest in ETF shares as a long-term investment for asset allocation purposes, while other investors trade ETF shares frequently to implement market timing investment strategies.
Buying and selling flexibility – ETFs can be bought and sold at current market prices at any time during the trading day, unlike mutual funds and unit investment trusts, which can only be traded at the end of the trading day. As publicly traded securities, their shares can be purchased on margin and sold short, enabling the use of hedging strategies, and traded using stop orders and limit orders, which allow investors to specify the price points at which they are willing to trade.”
But the 2 main points that seems to be lost above is that:
· ETF’s were supposed to be easy ways for the small “INDIVIDUAL” investor to buy and sell a MUTUAL Fund type financial instrument during regular market hours. ETF’s haven’t been around very long and most of you should remember that the SEC allowed these WMD’s because they were told it was supposed to HELP the small investor! Well, in the macro sense… BULLSHIT!
· ETF’s were supposed to TRACK the underlying equities that the ETF value is based on—NOT VICE VERSA. The price of the stocks that comprise the ETF were supposed to determine the ETF’s value – NOT the price (NAV) of the ETF determining the value of the UNDERLYING securities. “If there is strong investor demand for an ETF, its share price will (temporarily) rise above its net asset value per share, giving arbitrageurs an incentive to purchase additional creation units from the ETF and sell the component ETF shares in the open market. The additional supply of ETF shares reduces the market price per share, generally eliminating the premium over net asset value. A similar process applies when there is weak demand for an ETF and its shares trade at a discount from net asset value.”
Since their mainstream introduction in 1993 with the ETF that followed the S&P 500 the Spyders (SPY), ETF’s have multiplied like the recent invasion of . We now have ETF’s that track housing & materials & retailers & airlines and now I think we even have one that tracks how many times Warren Buffet takes a crap! OUT OF CONTROL.
Some say that these ETF’s benefit the small investor by giving them a way of investing across broad spectrums easily and cheaply. I agree – I buy these all the time and find their ease and benefits enormous. HOWEVER, what ETF’s have really become are play toys of HFT machines and their algo’s that they use. Please look at this chart from Friday comparing the $SPX & the $VIX. The 1st is the S&P 500 and the 2nd is the Volatility Index >>> mirror images!
What you really have is 1 machine trading volatility (Volatility is NOT an asset! “Soup is NOT a meal!”), while a second machine is reacting to the 1st machine’s algo’s and is trading the S&P 500. These nano second trades are done over and over and over, and all probably based on some “Heat Seeker” algo that found a keyword somewhere about something or another. Meanwhile, the rest of us humans sit there with our mouths wide open wondering what the heck is going on as “vacuuming” algo’s suck the bids and life out of the market. Which was controlling which? Was the S&P going up and down because it’s underlying stocks were going up & down; OR was the S&P going up and down because a machine was forcing the VIX up and down and another machine was forcing the S&P up and down in response? I say the later and IT’S NOT SUPPOSED TO BE THIS WAY!
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