Why Losers Stay in Wars and the Stock Market
This explains a lot. Via ScienceDaily:
Within hours this summer, 30 American troops died in a strike in Afghanistan and millions of American investors watched the Dow Jones Average shed an astonishing 634 points in one day. While it might be difficult to find similarities in the two events, social psychologists can detect a common theme: In each case, investments (money and human lives) were made, and those resources were painfully lost.
The ’sunk-cost’ effect: Untold Americans experienced what is called the “sunk-cost” effect: Less a cognitive thought than an emotional one, this effect is the feeling that they are being wasteful if they terminate a prior commitment. Thus, they pondered: Stay the course and “waste not, want not”; or “cut and run.”
Such a piercing event as suffering the greatest loss of American troops in the nearly 10-year-old war might seem to serve as a catalyst for people to denounce the war…
Dylan Ratigan Blasts U.S. Political & Banking Ties and the Partisan Hacks’ Excuses (Video)
Brokers With Hands On Their Faces
In need of a pick-me-up? The Tumblr Brokers With Hands On Their Faces offers an unending stream of more-pleasing-than-lolcats shots of Wall Street brokers smooshing and contorting their faces in their hands as they “find out the latest numbers” or some such. I like to think that they just realized that money is an imaginary social construct and can scarcely believe what fools they’ve been.
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‘Herd-Like’ Financial Reporting Could Predict Stock Market Bubbles
Via ScienceDaily:
When the language used by financial analysts and reporters becomes increasingly similar the stock market may be overheated, say scientists.
After examining 18,000 online articles published by the Financial Times, The New York Times, and the BBC, computer scientists have discovered that the verbs and nouns used by financial commentators converge in a ‘herd-like’ fashion in the lead up to a stock market bubble. Immediately afterwards, the language disperses.
The findings presented at the International Joint Conference on Artificial Intelligence, Barcelona, Spain, on July 19, 2011, show that the trends in the use of words by financial journalists correlate closely with changes in the leading stock indices.
“Our analysis shows that trends in the use of words by financial journalists correlate closely with changes in the leading stock indices — the DJI, the NIKKEI-225, and FTSE-100,” says Professor Mark Keane, Chair of Computer Science in University College Dublin, who was involved in…
Check Out Ron Paul’s Stock Portfolio (and for Other Members of Congress)
From Linette Lopez’s article in Business Insider. Here’s what Ron Paul does and full article here.
Well, this is predictable …Today members of Congress had to reveal their stock holdings. We were curious what anti-Fed, pro-gold Congressman Ron Paul held, and no surprise, he likes gold. Lots of it. Here are the stocks he owns:
Agnico Eagle Mines; Alumina Common; Anglo Gold Ashanti Ltd.; BrigusGold Corp. Com MPV (formerly Apollo Gold Corp); Barrick Gold Corp.; Claude Research Inc; Coeur D’Alene Minds Corp.; Gold Corp Inc; El Dorado Gold Corp.; IAM Gold Corp.; Kinross; Lexam Explorations Inc.; Mag Silver Corp.; Metalline Mining Co.; Mutual Securities Inc.; Newmont Mining Corp.; Pan American Silver; Petrol Oil and Gas; Silver Wheaton Corp; Virginia Mines Inc.; Vista Gold Corp.; Viterra Inc; Wesdome Gold Mines Ltd.; Allied Nevada Gold Corp.; Hecla Mining Co.
Looks like he’s doing well these days.
Click here to see what some of his fellow Representatives are holdings…
‘Ordered Fear’ Plays a Strong Role in Market Chaos
From ScienceDaily:
When the current financial crisis hit, the failure of traditional economic doctrines to provide any sort of early warning shocked not only financial experts worldwide, but also governments and the general public, and we all began to question the effectiveness and validity of those doctrines.A research team based in Israel decided to investigate what went awry, searching for order in an apparently random system. They report their findings in the American Institute of Physics’ journal AIP Advances.
The novelty of their study is the incorporation of time variation of “human factors” into mathematical analysis. The team, led by Dr. Yoash Shapira, former head of the Atomic Energy Commission Research and currently a guest scientist at Tel Aviv University, along with Eshel Ben-Jacob, a professor of physics, Tel Aviv University School of Physics and Astronomy, and his doctoral student Dror Y. Kenett, hypothesized that temporal order (arrangement of events in time)…
7 Ways The Hedge Fund Industry Is Built On Fraud, Lying, And Stealing
Could the entire hedge fund industry rest upon tens of thousands of instances of lying, cheating, and stealing? Well, at least they’re immensely generous (with their political donations). Via Guernica:
1. Insider Trading. If the Feds could tape every hedge fund we’d get an earful of how hedge funds use “expert networks” to transfer bits of illegal information that provide hedge fund managers with knowledge of events that are sure to move markets and make them a bundle.
2. Ponzi Schemes. Madoff isn’t the only one. Hedge funds and Ponzi schemes are made for each other since the funds are designed to evade so many disclosure regulations. It’s virtually a sure thing that every new year will reveal another Ponzi scheme through which a hedge fund steals money from investors and then uses new investor money to pay returns to the old investors.
3. Tax Evasion. No surprise here. Wherever you find billionaire financiers,…
The U.S. Congress Does ‘Abnormally’ Well in the Stock Market
This should be more troubling, but it feels like business as usual in Washington. Dan Foomkin writes on the Huffington Post:
Members of the House of Representatives considerably outperform the stock market in their personal investments, according to a new academic study.
Four university researchers examined 16,000 common stock transactions made by approximately 300 House representatives from 1985 to 2001, and found what they call “significant positive abnormal returns,” with portfolios based on congressional trades beating the market by about 6 percent annually.
What’s their secret? The report speculates, but does not conclude, it could have something to do with the ability members of Congress have to trade on non-public information or to vote their own pocketbooks — or both.
A study of senators by the same team of researchers five years ago found members of the higher chamber even better at beating the market — outperforming it by about 10 percent, an amount the academics…
The Case Against Goldman Sachs
In his usual clear, profane manner, Matt Taibbi lays out why Goldman Sachs’s executives must face criminal charges as soon as possible. Via Rolling Stone:
America has been waiting for a case to bring against Wall Street. Here it is, and the evidence has been gift-wrapped and left at the doorstep of federal prosecutors, evidence that doesn’t leave much doubt: Goldman Sachs should stand trial.
To date, there has been only one successful prosecution of a financial big fish from the mortgage bubble, and that was Lee Farkas, a Florida lender who was just convicted on a smorgasbord of fraud charges and now faces life in prison. But Farkas, sadly, is just an exception proving the rule: Like Bernie Madoff, his comically excessive crime spree (which involved such lunacies as kiting checks to his own bank and selling loans that didn’t exist) was almost completely unconnected to the systematic corruption that led…
The Next Market Bubbles: Food and Farm Land?
Photo: Andrew Magill (CC)
Robert Schiller writes for Al Jazeera:
There have been three colossal stock-market bubbles in the last century: the 1920s, the 1960s, and the 1990s. In contrast, there has been only one such bubble in the United States’ housing market in the last hundred years, that of the 2000s.
We have had a huge rebound from the bottom of the world’s stock markets in 2009. The S&P 500 is up 87 per cent in real terms since March 9 of that year.
But, while the history of stock-market prediction is littered with too much failure to try to decide whether the bounceback will continue much longer, it does not look like a bubble, but more like the end of a depression scare.
The rise in equity prices has not come with a contagious “new era” story, but rather a “sigh of relief” story. Likewise, home prices have been booming over the past year or…
Author Offers Shares Of Himself On Stock Exchange
Photo Dennis Doyle
Alison Flood writing in the Guardian:
Publicity might be the lifeblood of the book trade these days but author Cathal Morrow is going public in more ways than one with plans to float himself on the London Stock Exchange. Having previously wangled sponsorship from a private equity company to fund a year without lying – he’s writing up his exploits as the book Yes We Kant – Morrow is hopeful that patrons looking for a more unusual investment will back this latest project, Me Me Me Plc.
“Rather than one company owning part of the intellectual property of a project, a lot of people will own a smaller part of me,” he says. Morrow is offering a total of 30,000 shares in himself at £10 a piece (he’s retaining 30%, “the vital organs and so forth”). Because he’s not legally allowed to sell shares in himself, what investors are actually buying is a signed photo…
Finance Capitalism is Causing Starvation
We all know Soviet-style communism causes starvation. Looks like American-style capitalism does the same thing in a different way. Johann Hari in the Independent, from this past July:
It starts with an apparent mystery. At the end of 2006, food prices across the world started to rise, suddenly and stratospherically. Within a year, the price of wheat had shot up by 80 per cent, maize by 90 per cent, rice by 320 per cent. In a global jolt of hunger, 200 million people — mostly children — couldn’t afford to get food any more, and sank into malnutrition or starvation. There were riots in more than 30 countries, and at least one government was violently overthrown. Then, in spring 2008, prices just as mysteriously fell back to their previous level. Jean Ziegler, the UN Special Rapporteur on the Right to Food, calls it “a silent mass murder”, entirely due to “man-made…
Who Owns Facebook?
Business Insider charts who will be getting filthy rich when Facebook goes public in a year. Somehow, the answer is just what you most feared/suspected: Mark Zuckerberg, Goldman Sachs, and, somehow, Bono.
2010 Fortune 500: Wal-Mart’s Number One
Fortune 500 has come out with the top ranking stocks of 2010. Wal-Mart’s taken over the top stop, pushing Exxon to number two. Did the lack of employment encourage consumers to shop at Wal-Mart where they “roll back prices”? Read the Top 1000:
Rank Company Revenues Profits
1 Wal-Mart Stores 378,799.0 12,731.0
2 Exxon Mobil 372,824.0 40,610.0
3 Chevron 210,783.0 18,688.0
4 General Motors 182,347.0 -38,732.0
5 ConocoPhillips 178,558.0 11,891.0
6 General Electric 176,656.0 11,891.0
7 Ford Motor 172,468.0 -2,723.0
8 Citigroup 159,229.0 3,617.0
9 Bank of America 119,190.0 14,982.0
10 AT&T 118,928.0 11,951.0
Culture of Bigotry Hindered Australia’s Ability to Integrate With Its Asian Neighbours
The recent reaction by the Australian politicians toward the proposed merger between the Singapore Stock exchange (SGX) and the Australia Stock Exchange (ASX) is a typical example of a bigotry culture in this country.
The very minute the news of SGX’s intention to merge with ASX was leaked to the public arena, our politicians begin to jump up and down against the idea without even trying to find out in detail the rationale of the proposed merger, and the possible benefits to Australia. Their responses are so pathetically predictable in a habitually hysterical manner.
Response from the Australian “Elites” in the absence of any detail information about the Merger
Despite the fact that the Treasury Department has yet to receive any submissions from either the SGX or the ASX of the proposed deal (The Australian, 26 Oct 2010, 1:34PM), the Green Senator Bob Brown begin to “links Singapore Human Rights to the Australia…
Most U.S. Stock Trades Are Made by Computers, Not People: Is “High Frequency Trading” Manipulating the Stock Market?
I came across this topic while working on the Disinformation-published The Crime Of Our Time, written by Plunder filmmaker Danny Schechter. To me, this is one of those topics, the media should be more concerned about, (60 Minutes did report on this last night), but I wonder if the fear of massive manipulation destroying confidence in the entire system is causing many to look the other way. 60 Minutes reports:
It may surprise you to learn that most of the stock trades in the U.S. are no longer being made by human beings, but by robot computers capable of buying and selling thousands of different securities in the time it takes you to blink an eye. These supercomputers — which actually decide which stocks to buy and sell — are operating on highly secret instructions programmed into them by math wizards who may or may not know anything about the value of the companies that are being traded.
It’s known as “high frequency trading,” a phenomenon that’s swept over much of Wall Street in the past few years and played a supporting role in the mini market crash last spring that saw the Dow Jones Industrial Average plunge 600 points in 15 minutes. Most people outside of the industry know very little, if anything, about it. But the Securities and Exchange Commission and members of Congress have begun asking some tough questions about its usefulness, potential dangers, and suspicions that some people may be using computers to manipulate the market.
Computerized ‘Typo’ Causes Largest Stock Market Plunge Ever
This is really insane, really does make it seems like these traders are just playing with Monopoly money. If only actual working people’s pensions and savings were not tied to this grand casino, we could laugh it off. See the line in bold print below, it’s priceless. Tim Paradis writes on the AP via HuffPo:
A computerized selloff possibly caused by a simple typographical error triggered one of the most turbulent days in Wall Street history Thursday and sent the Dow Jones industrials to a loss of almost 1,000 points, nearly a tenth of their value, in less than half an hour. It was the biggest drop ever during a trading day.
No one was sure what happened, other than automated orders were activated by erroneous trades. One possibilility being investigated was that a trader accidentally placed an order to sell $16 billion, instead of $16 million, worth of futures, and that was enough to trigger sell orders across the market.
The Dow recovered two-thirds of the loss before the closing bell, but that was still the biggest point loss since February of last year. The lightning-fast plummet temporarily knocked normally stable stocks such as Procter & Gamble to a tiny fraction of their former value and sent chills down investors’ spines.
“Today … caused me to fall out of my chair at one point. It felt like we lost control,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.
Jon Stewart Explains the Goldman Sachs Fraud Charges Better Than The Rest of the Media (Video)
Once again, The Daily Show does the job the mainstream media should be doing:
Stock Market Slows as Tiger Woods Apologizes
So for thirteen minutes on Friday, the world’s biggest casino came to a crawl while Tiger Woods made his “apology” speech. (One can argue that the apology was more for Nike’s benefit than his wife’s.) As financial blog Zerohedge puts it:
When Tiger’s speech causes a more dramatic volume impact than the FOMC you know this market is all sorts of perfectly efficient. Bloomberg’s chart of the day below shows the total NYSE volume change in-between when Tiger started his convoluted and meandering mea culpa, and when he ended.
FOMC stands for Federal Open Market Committee, a.k.a. “The Fed” that many disinfo.com visitors have plenty to say about. So Tiger had more impact than a Fed Discount Rate hike announcement that day, good to know for the next time I talk to some finance guy who cold calls me about getting into the market…
Seems like just more proof that, as the Onion recently put it (brilliantly), money is a “symbolic, mutually shared illusion.”
