Traders Are Throwing Up All Over This Market: “It Feels Like The Algos Are Hooked Up To Tinder”
by Tyler Durden
ZeroHedge.com
02/10/2016
We can’t stop laughing after reading this note from Bloomberg’s Richard Breslow for one simple reason: in under 350 words it summarizes everything we have said since our initial “big” article from April 2009, “The Incredibly Shrinking Market Liquidity, Or The Upcoming Black Swan Of Black Swans” in which we predicted how the onslaught of HFT would make a farce of trading at the micro level, and all our posts since then condemning central bank intervention, making a mockery of fundamental analysis at the macro level.
Good job Richard, and we are certainly happy that slowly but surely, everyone is finally getting it.
From Richard Breslow
Liquid (Dis)Courage
Back in 2008, markets would take a theme and race with it for two to three days before a new piece of news made traders pivot en masse in the other direction. Everyone searching desperately for an answer to the existential question of economic survival. Investors found out that their well-diversified portfolios were merely different expressions of being long global growth. In that context, it made a lot of sense that everything moved together.
Today we have a different dynamic. No one is trading unless they have to or have microwave circuits for brains. Pension funds and endowments have tried to insulate their holdings from demanding tinkering. There aren’t stock-picking debates around the investment committee tables.
Banks are less active, and even fat fingers just can’t keep up. It’s left the field open to computers who have no investment horizon. If that were all there was, it might be sustainable for short periods.
But, wait, there’s more.
The Rest…HERE
