high frequency trading


The Martenson Report - Don't Worry; They'll Just Change the Rules

Wednesday, January 12, 2011

Executive Summary

  • Why the inevitable market correction will be triggered by a forcing event, and which one is most likely
  • Why the US has too much debt
  • Why state bailouts are inevitable despite the Fed's denials
  • Why there's "not enough oil to repay the debt"
  • Why the cost of debt service will drown us, even if interest rates remain low
  • Why the bond market will be the canary in the coal mine
  • The key signs to watch for that will signal the endgame is playing out
  • Recommended investment classes for preserving wealth 
JAG's picture

Where's The Beef: Liquidity

There is a common belief in the financial blogosphere that the year long rally in the stock, bond, and commodity markets is a product of Fed created liquidity. Dr. Martenson himself has frequently made the observation that a "wall of liquidity" has apparently hit the markets. A core belief for many gold investors is that the price of gold appreciates in unison with this Fed-induced liquidity.

In light of the brief stock market plunge that occurred on May 6th, 2010, I have to question the validity of this belief as it pertains to the stock market, and here is why:

xraymike79's picture

MORON Capitalism

Moron capitalism
By Julian Delasantellis 9-2-2009


Three Reasons This Stock Market Rally Is False

Executive Summary

  • Data is either good, murky, or unreliable.  The good data says we are not yet at the bottom.
  • Stock trading volumes are way, way down.
  • High frequency trading (HFT) harmfully obscures true market activity.
  • S&P 500 earnings indicate that stocks are still expensive.
  • The recent stock market advance is lacking a solid fundamental story to base itself on, it is running on hopes and fumes.

On a recent leg of a flight heading between Denver and Detroit, a kindly, middle-aged woman took the seat next to me and made small talk. As she hailed from Detroit, I had all sorts of questions for her. Did she know anybody who is out of work? How did the city 'feel' these days?  What had she noticed lately?

When she inquired as to my interest and I told her a little bit about my work, she asked for my prognosis. I said, "Not good, not yet; the base data is very weak." She immediately replied, "But the stock market has been going up. How do you explain that?"

She said this as if she had just played an undetected trump card; as though I was missing out some incredible secret. Given the power of the stock market to communicate to the masses (as exemplified by this exchange on the plane), and given how easily large, self-interested parties are able to manipulate and influence people, I consider the stock market to be among the least reliable of indicators.

So, understanding that all bull markets climb a wall of worry and that I could well be wrong, here are my three main reasons for discounting the messages implied by the recently rising stock market: