Disgraced Trader’s Struggle for Redemption

“It’s not necessarily about money, it’s about winning,” he told a visiting group of American college students. He told them that to understand trading, they needed to forget everything they learned in economics class and envision the amoral, take-no-prisoners world of “The Hunger Games.”

“The only time when people cooperate is to prolong their own lives,” he said. When rivals are no longer useful, “you stab them in the back.”

He told students he had accepted the fact that he was a rogue trader—but in his telling, it didn’t sound all that sinister.

A rogue trader, he said, “is a risk taker. It’s not a crime. It’s violating the mores established by the institution that you work for. It’s a rebellion against institutional controls that deny individuals opportunities for self-actualization.”

→ The Wall Street Journal

America : The Sticky Superpower

One of the oddities of globalisation is that although America’s trade footprint has shrunk, its monetary footprint has not. The Federal Reserve is the reluctant master of this system, its position cemented by the policies put in place to fight the 2007-08 financial crisis. When the Fed changes course, trillions of dollars follow it around the world. America’s indifference towards the IMF and World Bank, institutions it created to govern the system and over which it has vetoes, reflects power through neglect.

→ The Economist

Black Monday, Kinda

Monday, August 24th brought you one of the weirdest trading day ever seen in the past several years.  

So to sum up what happened today, here are a few charts, courtesy of Bloomberg, ZeroHedge and NANEX — time of the events may vary :

  • It all started sometimes in China, when it’s business as usual these days :

 

  • S&P Futures followed, kissing the dirt :

 

  • Which then started a major liquidity squeeze on the US market, as seen on the following charts by NANEX :

 

  • Causing buy-sell orders to never quiet match — courtesy of ZeroHedge :

 

  • Shortly after the opening bell, something like this on the Dow Jones : 

 

  • And an impressive rise on the VIX :

 

  • In the meantime, major (mini) crashes : 

 

  • To prevent further deterioration, just press the “HALT” button across major indices, including 3 consecutive press on the NASDAQ and 1’200 times during that day :

  

  • Then the master of markets, Tim Cook, dropped an email to Jim Cramer stating the following :

I get updates on our performance in China every day, including this morning, and I can tell you that we have continued to experience strong growth for our business in China through July and August. Growth in iPhone activations has actually accelerated over the past few weeks, and we have had the best performance of the year for the App Store in China during the last 2 weeks.

  • Which caused this :

 

  • Then, all of a sudden, while unrelated from the previous event — well, who knows : 

IMG_3010

  • Oups…

 

  • …While European markets will stay stucked for a little longer :

 
There’s more to it for sure, but here are some events, mostly correlated, to show the newcomer what’s up for today on the trading side. 

Finally here’s a fun tweet from Josh  Brown :

@ReformedBroker: Look, it doesn’t matter what you bought or what you sold. The important thing is that you panicked.

The Bitcoin Bubble and the Future of Currency

Volatility is a serious problem, if you’re trying to put together a currency, rather than a vehicle for financial speculation. If the currency of a country ever fluctuated as much as bitcoins did, it would never be taken seriously as a medium of exchange: how are you meant to do business in a place where an item costing one unit of currency is worth $10 one day and $20 the next? Currencies need a modicum of stability; indeed, one of the main selling points of bitcoin was that it couldn’t be destabilized by government institutions. But that comes as scant comfort to people watching the value of a bitcoin behave like some kind of demented internet stock during the dot-com bubble.

In reality, then, bitcoin doesn’t really behave like a currency at all. In terms of its market value, it looks much more like a highly-volatile commodity. That’s by design: bitcoins were created to be the most fungible commodity the world had ever seen – to the point at which they would effectively erase the distinction between a commodity and a currency.

→ Medium