Sponsored Content




Intermarkets' Privacy Policy
Support


Donate to Ace of Spades HQ!



Recent Entries
Absent Friends
Bandersnatch 2024
GnuBreed 2024
Captain Hate 2023
moon_over_vermont 2023
westminsterdogshow 2023
Ann Wilson(Empire1) 2022
Dave In Texas 2022
Jesse in D.C. 2022
OregonMuse 2022
redc1c4 2021
Tami 2021
Chavez the Hugo 2020
Ibguy 2020
Rickl 2019
Joffen 2014
AoSHQ Writers Group
A site for members of the Horde to post their stories seeking beta readers, editing help, brainstorming, and story ideas. Also to share links to potential publishing outlets, writing help sites, and videos posting tips to get published. Contact OrangeEnt for info:
maildrop62 at proton dot me
Cutting The Cord And Email Security
Moron Meet-Ups

NoVaMoMe 2024: 06/08/2024
Arlington, VA
Details to follow


Texas MoMe 2024: 10/18/2024-10/19/2024 Corsicana,TX
Contact Ben Had for info





















« Overnight Open Thread | Main | Top Headline Comments 7-14-10 »
July 14, 2010

Wednesday Financial Briefing

NOTE: NSFW-ish pic at the bottom of full post.1

Stocks had another good day, with both the Dow and the S&P 500 indexes gaining one and a half percent. The S&P 500 closed at 1,095.34, and the Dow closed at 10,363.02. The gains were driven by optimism over corporate earnings, and not a little bit of wishful thinking. I'm happy because my 401(k) is gaining back some of the equity it's been hemorrhaging over the past, oh, two years or so; I'm sad because I know that this is a sucker's rally and it won't last. (DOOM!)

Large-cap firms (and banks) may be doing well, but small companies are still hurting. This is most of the reason I'm still bearish about the rally we're in right now -- I don't think it'll last because it doesn't have any depth or, frankly, any rationale. It's the kind of giddiness a drunk feels right before he gets behind the wheel to drive home -- he never suspects that half an hour later some green-faced Highway Patrolman will be collecting his various pieces and parts off of the highway.

I often joke about DAGGER, a high-frequency trading algorithm, being a sentient (and malevolent) being. Others make jokes about SKYNET. But as the WSJ reports, the trend towards using algos in financial trading is accelerating. Computers are on the verge of taking securities trading entirely out of human hands, and this doesn't sit well with me. Algorithms and AI heuristics are only as good as the people who program them, who are human and thus make mistakes. I also fear that HFT will make value-investing pretty much obsolete, and thus make stocks in general a purely speculator-driven pastime. It's not investing anymore; it's just gambling, because stock-picking and research are dead. The algos drive everything now, at millisecond speed.

Uncle Sugar is "generous to a fault". It's easy to be generous when you're giving away other people's money.

It looks like China is coming down off their sugar-high as well. And more speculation that the Chinese are hiding a mountain of bad debt. They may pretend to be capitalists, but remember that the government is still authoritarian Communist. They'll hide the bad news until it explodes in their faces. If you're going to invest in China, you'd best do it fast, because when the boom is over...it's over.

So the problem with public-sector pensions is this: either they use real-world assumptions for rate-of-return on their investments, and suddenly come face to face with a $2.9 trillion dollar shortfall; or they continue to make unrealistic assumptions about how much return they're going to get over the next twenty or thirty years, when the resulting meltdown may have consequences no one wants to think about. Unions, of course, are against the idea of low-risk/low-rate-of-return accounting. Pull quote:

Brainard said, “Nonetheless, it is a defensible arrangement in a corporate environment, in which a company at any point could go bankrupt or be acquired, and hand its pension liabilities to taxpayers or shareholders. But considering the very long life -- essentially perpetual -- of a public-sector entity, and its ability to stay invested throughout market cycles, requiring their pension plans to value their liabilities as if they’ll earn a return consistent with that provided by a conservative bond portfolio, is nonsensical.”
In other words, states can rely on taxpaying suckers like us to fund their madness for eternity. Eternity!

The rise and fall of the "Shadow Banking" system. Read the linked report if you're into that kind of thing: it is both interesting and scary.

Here's something I don't understand. When Greece's troubles became widely-known, markets the world over immediately pissed themselves. So yesterday Moody's cuts Portugal's debt rating to A1, and....nothing. What the hell, man? Greece gets kicked in the nuts but Portugal gets a pat on the head?

Welcome to the Brotherhood of the Boned, Kentucky! Our support group meets on Wednesday nights at 7pm down at the Loyal Order of Moose hall next to the dry-cleaners. The meetings are usually chaired by California, the founding member of the Brotherhood of the Boned.

Today's krappenfest brought to you by Miss Sally Rand.2


--------------------------------------
1 I'm going to start warning folks if I'm posting a photo of one of my vintage beauties. The stuff is pretty tame and I do try to keep things tasteful, but still, I don't want to get anyone into hot water.
2 Sally Rand actually did not perform in the nude; she wore a body-stocking.

digg this
posted by Monty at 07:05 AM

| Access Comments




Recent Comments
Nova Local: "69 "Local news here quietly discussed that most/al ..."

redridinghood: "Wishing all a blessed Good Friday. ..."

LinusVanPelt : "No. Burr was a POS, certainly. But it was a duel, ..."

Rufus T. Firefly: ">>>Local news here quietly discussed that most/all ..."

Village Idiot's Apprentice: ""Local news here quietly discussed that most/all w ..."

Ben Had: "..., boggles the mind, it does. May Spring bring ..."

Nova Local: " And the names of the two deceased workers who's ..."

... : "We MUST defend Ukraine. And we MUST stop Israel ..."

Dem Propagandists: "Republicans made Obamacare expensive and unafforda ..."

Ben Had: "JT, Good morning. Hope all is well with you ..."

JT: "Hiya BenHad ! ..."

m: "Where's our SFGoth? ..."

Recent Entries
Search


Polls! Polls! Polls!
Frequently Asked Questions
The (Almost) Complete Paul Anka Integrity Kick
Top Top Tens
Greatest Hitjobs

The Ace of Spades HQ Sex-for-Money Skankathon
A D&D Guide to the Democratic Candidates
Margaret Cho: Just Not Funny
More Margaret Cho Abuse
Margaret Cho: Still Not Funny
Iraqi Prisoner Claims He Was Raped... By Woman
Wonkette Announces "Morning Zoo" Format
John Kerry's "Plan" Causes Surrender of Moqtada al-Sadr's Militia
World Muslim Leaders Apologize for Nick Berg's Beheading
Michael Moore Goes on Lunchtime Manhattan Death-Spree
Milestone: Oliver Willis Posts 400th "Fake News Article" Referencing Britney Spears
Liberal Economists Rue a "New Decade of Greed"
Artificial Insouciance: Maureen Dowd's Word Processor Revolts Against Her Numbing Imbecility
Intelligence Officials Eye Blogs for Tips
They Done Found Us Out, Cletus: Intrepid Internet Detective Figures Out Our Master Plan
Shock: Josh Marshall Almost Mentions Sarin Discovery in Iraq
Leather-Clad Biker Freaks Terrorize Australian Town
When Clinton Was President, Torture Was Cool
What Wonkette Means When She Explains What Tina Brown Means
Wonkette's Stand-Up Act
Wankette HQ Gay-Rumors Du Jour
Here's What's Bugging Me: Goose and Slider
My Own Micah Wright Style Confession of Dishonesty
Outraged "Conservatives" React to the FMA
An On-Line Impression of Dennis Miller Having Sex with a Kodiak Bear
The Story the Rightwing Media Refuses to Report!
Our Lunch with David "Glengarry Glen Ross" Mamet
The House of Love: Paul Krugman
A Michael Moore Mystery (TM)
The Dowd-O-Matic!
Liberal Consistency and Other Myths
Kepler's Laws of Liberal Media Bias
John Kerry-- The Splunge! Candidate
"Divisive" Politics & "Attacks on Patriotism" (very long)
The Donkey ("The Raven" parody)
Powered by
Movable Type 2.64