Externalities? No, never. It's all fundamentals and technicals. Tell that to herbalife shareholders/traders. That stock's movements have nothing to do with externalities. Or, apple, today. Only the largest company in the world. That didn't move today based on anything external. Like say, a large hedge fund manager using cnbc and twitter to push the stock up a few percent. Externalities in this market? Perish the thought. You're smart enough to figure out how to trade these stocks without letting any market forces get in your way. I wish I could be more like you. Maybe someday. You've got it all figured out.
manipulation doesn't have to be DIRECT. here is why- not only CD,but any other form of income(such as fixed income) money simply have no other place to go. the situation is not normal because of constant and massive FED intervention. if this is not manipulation(QE and so on) then i don't know what is..
The deficit and QE don't count as "manipulation". Therefore, there is no manipulation. We can play these semantical games until the market lays down the law. Which will also happen, at some point.
Deficits don't matter as long as interest rates stay low. When bond buyers (not the Fed) demand much higher rates (many years in the future), then it's game over. That's when the real weeping and gnashing of teeth begins. That's when the real government shut downs occur, not outwardly semantic games that end in closed door hand shaking, laughing, and getting a beer to watch the baseball game. However, for now it's kicking the can far down several elections cycles.
A lot of traders like to use volume as an indicator. So do many retail folks especially. They may say things like "hey, I just saw stock XYZ go up 5% the last 4 days on three times the normal volume. I'm gonna buy." What if they knew that 90% of that volume was just an algo scratching trades against itself to make it appear as if there was real demand so they could catch a dupe. Does that count as manipulation? B/c that's going on all over the place. How about major bank CEOs meeting with the President tomorrow to discuss the Country's fiscal situation? Surely, they won't try to persuade him or get any advanced info of what's going to happen regarding CR and the debt limit and trade in advance of that. Does that count as manipulation? Rigging libor?
You're right on the analysis, wrong on the timing. The Treasury market will implode 2016-2020. Possibly earlier.
Yes, it does. And yes, it counts. But the market doesn't care. Without HFT, volumes would be lower, but stocks would be at similar levels.
I love it how all the manipulation is from the long side only. How come stocks can't be manipulated down? It's far easier for an algo to manipulate the market lower then higher. And 99% of the retail public doesn't give a flying fuck about volume. And I'm not saying their analysis is more sophisticated then that but your theories are way off base.
Didn't intentionally imply long only. I used herbalife as an example because Bill Ackman dropped it 20% in a week or two based on one presentation. Then Carl Icahn and Dan Loeb swung it around 80% the other way using their PR scheme. It's funny how they're throwing this multi-billion dollar company around like it's a paperweight. That's manipulation. So, from my point of view, what is the Fed doing since they're not running 10bln, but rather a few trillion. What I'm most pissed about is that they've intentionally destroyed vol. That's horrible for traders. I could care less if the market goes up or down.
HLF is volatile because over 30% of the float is short. That is true with almost ALL heavily shorted names. It's not manipulation, it's the fact that very few own a large majority of the shares. In this case, they are short. Regarding the Fed, they have NOT destroyed vol. And your HLF example is a case in point. I could show you 1000 stocks that move like HLF. Plenty of Vol in PCLN, FB, the biotechs, YELP, solar stocks, I could go on and on and on. Plenty of vol in bonds, oil, nat gas, copper, and don't even get me started on the metals. Then we've got currencies as well. Vol is all over the place. Where vol no longer exists is in the big caps and they make up a large part of most indices. So if one myopically focuses on just that part of the market, they would think vol is gone. But the stocks I watch...vol is out of control. Hell oil just dropped 10 pts in the last two weeks. And Rbob? Dude, it's come off 50 cents in a month. That's 20k per contract. I'm sorry, I hear this Fed has killed vol argument all the time and there is ZERO data to back that up. Not that I'm any fan of the Fed. I just want to make sure facts get brought to the forefront.