Markets Crash and a Chap In Hounslow is to Blame?

According the the Federal Bureau of Investigation and other regulatory authorities in the USA  a chap working from his computer in his three bedroomed semi detached home in Hounslow five years ago managed to wipe trillions of dollars off share values five years ago. As a result they have issued a warrant for the arrest of  Mr Navinder Singh Sarao on charges of wire fraud, commodities fraud and market manipulation and the UK authorities, subservient as usual to US demands, has geared its legal system to suit the requirements of the USA without getting anything back in reciprocation. Continue reading

Saving and Gambling

The buying and selling of investments has always been dominated by two different activities with opposing motivations.  Continue reading

In the End No One Was There to Come

Someone commented on my recent post about the IPCC and linked the way in which climate change has become a movement claiming that it is without scientific foundation with the way in which economies are built upon a fiction of worthless money. It set me thinking.  Continue reading

The Only Game in Town

High frequency trading is not real trading at all; it is a question of who can invent the best algorithm and pitch it against other algorithms and any sucker who joins in the market. These so called trades are carried out hundreds of times a second, and the fractional profits or losses that are created as a result can quickly mount up. So far high frequency trading is not illegal unless there is an element of market manipulation involved, although it is hard to see how high frequency trades can do anything other than create an artificial market. The market, whether in shares, bonds, commodities or esoteric derivatives is enough of a casino, but high frequency trading tries to play the odds, just like a skilled poker player. Continue reading

High Frequency Trading: astonishing but not surprising

I have always failed to understand why stock market authorities around the world, whose job it is to regulate markets for the protection of investors, permit parties to conduct high frequency trading. High frequency trading, or HFT, is not really trading at all. Companies design algorithms which enable computers to spot market discrepancies that arise in a millisecond or less on the market, and then take advantage of tiny differences by putting in very large buy orders and then very large sell orders all within a millisecond or less. It is not really trading at all, but simply a competition as to who can figure out the most complex effective formula to take advantage of what is no more than a fractional dealing between something happening and something being recorded. Continue reading

The Global Casino

Learning from experience, my late partner Mark Braier use to tell me, was the definition of intelligence. If you bang your head against the wall experience should teach you that banging your head against the wall is never a good idea and you do not bang your head against the wall again. Most people have sufficient intelligence to learn from experience in most walks of life but when it comes to investment and buying and selling shares and stocks and commodities they show a naive faith in systems. Continue reading

The Artificial Nature of Markets

Stock Markets throughout the world are marking down prices. This has been partly due to computer stop loss programmes and partly due to panic; are the stocks and shares worth in a recession as much as they were worth in good times? We are told that we cannot buck the markets and that the markets will find any weakness and exploit it. For ten years of my life I lived above a market; not a stock market but Chrisp Street Market in Poplar, which was then full of fruit, vegetable, food and stalls selling the kind of things that you would today buy in a modern supermarket. What struck me was that there was then almost no price differential from one market stall to another. My Mother did not “shop around” on what were her daily visits to the market which the back of our maisonette overlooked, but went to but from the stallholders that she liked and trusted. Continue reading