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James Mackintosh writes a generally perceptive column in the Financial Times called Short View. On March 11 he wrote: The releveraging of America is under way. After a brief nod to the idea of cutting debt, US companies increased borrowing last year and reduced their equity. Easy money from the Federal Reserve was followed by …
Lots of you commented on the Descent of Man. Let me note here that the every-man-for-himself mentality is the byproduct of commodity salesmanship and was around long before speculative capital. Remember Michale Milken’s famous utterance: “Who can we make a profit off of, if not our friends?” Change the euphemism of “making profit off” to …
Many in the West have commented on the composure of the Japanese in the face of calamity – office workers who did not leave their seats, supermarkets clerks who held the racks so they would not fall – and contrasted it with how people would have reacted in the West with that every-man-for-himself-and-may-the-devil-take-the-hindmost attitude. A …
This series began six months ago. Let us see what we know so far. Speculative capital, capital engaged in arbitrage, dominates the financial markets. (See Vol. 1 for how and why). Arbitrage is simultaneously buying (low) and selling (high) two different “targets” to lock in a riskless profit. Buying X low and selling Y high …
High Frequency Trading and Flash Crash – 6: The Destruction Has Come (here to stay) Read More »
I will put you in a car in front of 1600 Pennsylvania Avenue and drive for an hour at the direction of your choice. Not particularly fast; about 60 or 65 miles per hour. I will then stop in a small community and ask you to walk out and look around and talk to people. …
It is easier to gain insight into the theoretical principles of a system in its early stages of development. The early stages, whether of a natural, mechanical or social system, include only its defining features, those irreduciably minimum parts which are absolutely necessary for it to become what it is. As such, they are easy …
High Frequency Trading and Flash Crash – 5: “Discretion to Delay Trades” Read More »
Today, I chortled while reading the Financial Times. I want to share the story with you because it is funny. Not shaking-your-head funny but real, ha-ha funny. An outlet by the name of the World Sugar Committee called high frequency traders in the sugar market ‘parasitic’. “Sugar body blames ‘parasitic’ computer traders for volatility” was …
I have a full plate of things I have to do, on top of which stands Vol. 4 of Speculative Capital whose completion is getting more pressing with each passing day. So, I ignore the uninterrupted stream of drivel that passes for economic discourse in the press and media. But when I read the (brilliant) …
The 500 odd page report that the Financial Crisis Inquiry Commission released last week pointed to “widespread failures in financial regulation, dramatic breakdowns in corporate governance, excessive borrowing and risk-taking by households and Wall Street, policy makers who were ill prepared for the crisis and systemic breaches in accountability and ethics in all levels”. It …
The Report of the Financial Crisis Inquiry Commission Read More »
Today, the Financial Times declared the Middle East peace dead. It said it in the heading of its editorial, which read: “Middle East peace hits a dead end”. The lead sentence said: “Any credibility the Middle East peace process retained has been dealt a crippling blow.” One of the main “architects” of the peace process …
The Architect of the Middle East Peace Turns His Attention to Saving the U.S. Economy Read More »