Showing posts from May, 2011

High Frequency Trading and Flash Crash - Part 9: Concluding Remarks

Since this series began last October, we have established that:
HFT is the latest mode, i.e., the form of movement, of speculative capital in markets. Like the previous forms such as derivatives and day trading, this form first appears in the most developed markets and then, having grazed the profit opportunities there, simultaneously creates, and migrates into, new, “emerging” markets. That is signature form of the expansion of speculative capital which I described in Vol. 1:After arbitrage opportunities in the home market have been grazed, speculative capital sets out to find virgin markets outside the original national boundaries. This excursion begins with more developed markets. That is partly because they can more easily accommodate the large size of speculative capital. Also, the primary tools of speculative capital–derivatives–are more likely to be found in these markets. Gradually, even in these markets, the profit opportunities are arbitraged away. So speculative capital set…

The Fundamentals of Forex Fundamental Analysis

Without any doubt, technical analysis is very important for forex trading – it is inevitable when it comes to identifying the entry and exit points in the trading process. However, trading forex doesn’t come to finding the entries and exits only. Technical indicators are not enough for creating an all-inclusive picture of the forex market.

In this respect Forex fundamental analysis turns out to be of great use for the forex market. It is so because such factor as the forex market sentiment can’t be discarded. And the market sentiment is influenced by political and economic news at the first rate. The crucial market makers in forex such as central and investment banks, hedge funds and multinational corporations analyze the economic and political news for making forex trading decisions on a daily basis.
The best thing about using Forex fundamental analysis indicators, such as economic news, for the forex market is that they are equally available to all the participants of the market. The …

When Greenberg Does a Zuckerberg and Both Do (well in) America – or the Values That Stanford Business School Imbues

You must have heard of Charlie Wilson’s comment that what is good for GM is good for America. Wilson was the CEO of GM in the mid 1950s and there is some question as to what he actually said. But regardless, the statement caught on because it summed up a relation that defined a system. It was a goose-gander type relation with a bit of dark undertone. It implied that the U.S. government had to adopt policies favoring GM – which it did.

Dark undertone or not, the fact remained that you could go to work for GM after high school, like your father and uncle had done before you, and retire after 30 years with a decent pension and medical insurance. In the intervening years, you bought a house, several cars and supported your stay-at-home wife and three kids through high school and at times, college.

And it was not only the jobs. The modern American management system that conquered the world was a GM creation. MIT’s Sloan School of Management is named after Alfred Sloan, a long time GM chairma…

Make Your Life Credit Debt Free

Everyone wants to get their life financially good. So, they can fulfill all the requirements of their life. But if you are in debt then surely you can't enjoy the life and your life would be pathetic due to your debt.

Its sure that a person can't live without a credit card. Because credit card is a one kind of tool by which person can do many things like shopping, ticket booking etc. But you have to pay your all the credits as this is not the free of cost voucher.

If you are in multiple debts then you should go for credit card debt consolidation. Debt consolidation involves taking out a loan to pay off all your burden debts at once. In debt consolidation process you have to make a single monthly payment to the lending agency. So, in this way, your headache about multiple payments on your debts will gone. But make sure that do not fail to pay your monthly payment. Debt consolidation loan will help you in may ways, like helps prevent your credit score, helps to prevent late payme…

How To Shop For Health Insurance

Health insurance is very much important to keep your family happy forever. If you buy health insurance then you don't need to struggle to pay your medical bills. Here are some points which you should read before buy any health insurance.

In firstly you should determine what type of coverage you need i.e, individual or family health insurance. After that decide, which type of health insurance you want to buy. For example, if you travel a lot then you should go for travel insurance.

Take as much as information about the insurance which you are going to buy. You should clear about all details on the insurance so ask yourself many questions and then find the answers. For example, will doctors in your area accept the plan ? Will doctor accept insurance from the provider ? Will you be able to select your own doctor ? It means, the doctor whom you know a little bit and with whom you are comfortable. You should also check the health insurance plan (s) you are interested, is it cover a spec…

High Frequency Trading and Flash Crash - Part 8: How Does Flash Crash Come About?

Consider this game. You are given $20 to take part in a game of 3 consecutive coin tosses. In each toss, you win $5 if you guess right and lose $5 if you do not. You must leave the game with at least $10.

Here is the lattice of the game’s possible outcomes:

If your first call is right, starting with $20 at S, you will win $5 and end up with $25 at A. In the second toss, if you win, you will have $30 (B); else your money will be reduced to $20 (E). After the third and last toss, depending on whether you start from B or E, you will end the game with $35, $25 or $15. In all cases, the condition of having at least $10 would be satisfied.

If your first call is wrong, you will end up with $15 (point D). If your second call is also wrong, you will be at X with only $10. That is the end of the line for you. Technically, the game is not over yet. One more toss is left. And if you guess right, you might end up with $15 at point G. But you cannot take that chance, because if you lose, you would vio…

How To Earn Extra Money

If you would like to earn extra money for an upcoming expense or want cash to pay off your credit card debt then you should know how can you earn extra money. Your income may not fulfill your monthly budget and you may need some extra money to make up for a shortfall. You can make your pocket big by earn extra money. There are many options by which you can earn extra money.

These are the following way by which you can earn extra money :
Firstly, find out if your company has overtime or more part-time place within the company that you can pick up after hours. You can also find that kind of work which you can do from your home. If you are working in shifts, as a waiter, nurse or other profession then let your coworkers know that you are interested in picking up extra shifts.

Find out such kind of job or small business which you would enjoy doing. For example, if you are very much interested in teaching then you can work as a educator either through a tutorial center or individually.
You …

The Supreme Court Rules Out Class Actions

Last November I wrote how some unscrupulous companies – many of them quite large – had expropriated Apple's business model in a perverse way.

Apple charges a small amount, say $2, for an app but sells it to millions of users. Both the company and the app developer benefit.

In the perverse version of this business model, a company, say, a telecom or a bank, defrauds millions of customers out of a small sum, say, 99 cents. Even if you, as an individual customer, notice the fraud, what are your options – sue a telecom for 99 cents?

The only remedy for such fraud in the U.S. was a class action suit, a legal mechanism that dealt with cases when a company had set out to “deliberately cheat large numbers of consumers out of individually small amounts of money,” in the words of the California State Supreme Court.

This past Wednesday, in a 5-4 ruling, the Supreme Court banned consumers from coming together in a class action suit to fight such fraud. According to Brian T. Fitzpartick, a law pro…

Epilogue: Lost in Conversation

Why would you stay up all night to see the sunrise? Every day, sun rises at an exact moment. You only have to get up a minute before the designated time to see it; no need for staying up all night.

Why would you then strain yourself to analyze the utterances of a central banker for clues to his future actions? Those, too, have an almost mechanical predictability. The old joker of the economics officialdom, Milton Friedman, gave away the game when he suggested replacing the Fed with a computer.

Yet, the “Fed watchers” – Fed watchers! What asses they must be! – come running whenever a Fed chairman opens his mouth. Alan Greenspan played them, constantly casting fake pearls before the real swines in market, media and academia and letting them munch on the drivel he had just delivered.

All this is by way of saying that Bernanke’s comments require no analysis. What he would/could say is scripted. All the time. Let me take you to the highlights of his Wednesday news conference to show what I …