An Upside-Down World

Earlier this week the market flashed-crashed on a fake tweet from a hacked AP account.  When the word got out that the tweet was a fake, the market bounced back to its pre-tweet level.  During the round-trip the market moved a total of $400 billion.  A couple of things…

·          When did we start trading on tweets?  I must have missed that meeting.

·          Why do we continue to allow the high frequency traders to remove all liquidity from the market in a matter of seconds? (Check out for a great pictorial.)

·          How did it come to pass in such a short period of time that social media is actually being relied upon for ANYTHING?  Do the words “Manti Te’o” ring a bell?  Or how about that girl in NJ who faked her own kidnapping causing 34, 000 people to retweet her “tweet for help?”

Earlier today it was released that numerous central banks around the world are stepping up their purchases of equities using their reserves.  This was generally received as a good idea.   The Fed is prohibited from buying stocks, but Japan’s central bank isn’t.  So…  a wink and a nod to Abe about the JPY devaluation and voila’ – the JCB is down for doubling its ETF exposure to 3.5 trillion yen.  Israel has been in the game since last fall.

·         This is a good thing?  Banks diversifying their reserves into a stock market that is now up more than 100% since March 2009?  That seems as crazy as yelling “Movie!” in a crowded Firehouse.

It was reported this morning that Spain’s youth unemployment has risen to 57%.  The European Stoxx 600 closed the day up 0.76%

And now for the clincher.

I received an email today from a marketer who was trying to sell me on his firm’s option trading acumen.  Yesterday, I rejected the idea.  He is now requesting that I send him $500/hour for each of the four hours he spent trying to get our business. As one of my partners said, “we should charge them for wasting the last month of our lives with them and receiving no value.”

You just can’t make this stuff up.  – LL