Mnuchin Blames Volcker Rule, High-Speed Trading for Volatility

Sig · Dec 20, 2018

newwurldmn said:
Managers loved prop trading. it typically had a higher return than their core businesses which required more infrastructure. I was trading an embedded prop book and our combined pnl was 10% of the entire group (but we were 4 people and the group was 50 people and a huge technology infrastructure).

It did add volatility which punished the stocks' PE's (with the exception of Goldman)
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Yeah, I remember it being a PE thing.

remoteControl · Dec 20, 2018

canoe said:
is it just me or does it seem like repealing the Volcker Rule would actually increase volatility?

that's just fine by me but i don't see why Mnuchin thinks repealing it would dampen volatility.
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I see your point, but it would also increase liquidity which could help.

murray t turtle · Dec 20, 2018

sle said:
Actually, banks not providing liquidity is exactly what the rule is all about. It is designed to prevent undue risk-taking by systematically important institutions. There are plenty of liquidity providers that are not systematically important like hedge funds.
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%%
Not to worry. The new FED rule on cheap [computerized] home appraisals allows for overpricing + speed on average Joe's biggest asset.Nothing like a good bear trend.
[Edit With trading profits up @ most major banks, things must be OK.Not sure what is going DB or C..... but some one has to lead the way......]

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Mnuchin Blames Volcker Rule, High-Speed Trading for Volatility

Sig

remoteControl

murray t turtle