PASSIVE INVESTING BY %
In less than ten years the majority of all investment is now made with passive investing. This means SOFTWARE not people are trading enormous volumes at speeds never before anticipated in design of regulatory frame works. Said another way the laws are all local to nations and the trades are all passive and in the cloud where there is virtually no regulation at all.
The Passive Investing spiral or market place is a market space of VOLUME and VELOCITY human’s could never match pace for. Price in the markets is now manipulated by computer trading volume and velocity in any asset class, made stable with lower volatility than we have known ( ever ) in 2017 due to trading “ranges” pre established by the software in a normal market space.
The Passive investor program is seeking to create risk- less risk. No risk in betting on the side which WAY a future price in every single asset class may go tomorrow. As the future bets are side bets on forward pricing – pure bets – with leverage at 50 to 1 margin – or a dollar down and 50 bucks from borrowing placed on various side bets by the software. The core mind of the new CASINO CAPITALISM where side bets at fantastic leverage are the controlling element of the market price today. Said another way many times the volume and velocity of side bets on future prices are made daily to the actual buying of the asset core class like cotton – oil – US dollars – or sugar. Side bets on which way cotton oil US Dollars or sugar may go tomorrow or next month or next year – all software side bets of enormous money pools – create speculation markets in the casino capitalism that are larger markets than the real markets for goods and services. These side bets or speculations now control market price as side bets on future prices influence those prices by the velocity volume and massive disproportion of the side bet to the real market – say 1000’s to one – such that real market prices in all asset classes are now fully casino manipulated by software. Get that in your mind. Prices are all not real or sustainable driven by casino capitalism we call passive investing which is really many models many formats of software controlled manipulations outside any modern regulatory oversight influence.
When the speculation side bet market for real goods and services is controlling the real market price by distortions – money pool leveraged side bet manipulations of price – all controlled by software we have something new. An entire global market hostage to first generation software programing, increasingly billed as AI and self learning – that becomes an UNCONTROLLED EXPERIMENT in global economic markets we call CASINO CAPITALISM. The profits super money pools fully relying on using AI software to make their ungodly profits by volumes and velocity of leveraged trading accounts have lost their minds in our opinion. They are insane. They don’t think any more.
Just ten years back we used to follow a stock and invest in that stock or that bond as a long term stake holder investor. People thought and made decisions related to ownership. Today its not about ownership its about trading – in the casino – and betting. Legal gambling.
Today all asset classes are for range trading within speculative side bets on shorts longs puts calls and stop loss to afford the casino player advantage ( risk-less risk ) to effect profits shopping for the superior software making small point gains over another software.
The new generation of software monitors all the software itself. Thats right. Listen up. New and next generation passive software monitors all software and moves enormous money pools into higher yield positions for the best software. Now the best outcome bets are rewarded as software superior in the market – within a software arms race taking place in markets that is sucking the life out of any real market place we have remaining. The weaker software is PUNISHED while the more aggressive and highest risk software gets all the money moving into itself- as if it was safe. Now highest risk is good and seen as having no risk at all. The insanity is to fail to ratio the reward to the risk. The larger the profit or reward the greater the risk – and that rule never changes. Those who forget that rule are insane gamblers soon to part with all their money. IT will be such a surprise to the insane person.
The highest profit is not lower risk it is staggeringly high risk at levels the world has never known before. SUPER RISK. System crashing risk. Risk that break the entire global system to impossible to fix or repair levels. The software today does not accommodate liquidity. When liquidity retires from the system and all orders over protracted time periods are only SELL and no BUY orders exist at all or in sufficiency to keep the system afloat – the system itself dies.
The WORLD WAR II Order set up after World War II by the victors, is in historic danger of dying. Who says. Why the IMF the WORLD BANK the UN and of course me. I say. I have said. I’ve been saying. In fact I’ve told YOU what to DO to protect yourself and your loved ones. In a not so distant future there will be moaning and nashing of teeth as what I predict comes about as economic rebalancing of system abuse in this case fatal and a new regulatory frame work gets set in place.
Its coming. All of that.
How long can a spiral of abuse in core economics continue to distort market prices and market spaces? A long time. It can go on till it breaks. Typically the break occurs before the largest ramp up ward that no one believes will ever not ever stop moving upward. Gravity is suspended for the majority of market players.
A long long time. And when the ball stops bouncing no one knows nor can predict.
A contagion event we suspect will begin with debt default in the super debt bubble of today the core cancer of the post World War II order. When that event hits switches will be thrown as if by MAGIC such that all trades will be sell and no trades will be buy. The casino capitalism switch is digital and it is thrown globally all at once in a virtual instant. No programer has allowed for this condition. The software is fatally flawed and without regulatory moderation or human intervention. The result is a liquidity crises in all markets. The outcomes is a spiral of endless deflation in price, as the economics rebalance from the speculation of price. The DOW moves from 50,000 DOW to 6400 DOW. Bloodbath’s in all market classes follow as no one can get out and the price for all asset classes plunges down the rabbit hole. We call this new condition in the digital market space of casino capitalism – CASCADE a new digital outcome from failed buggy not so smart software that failed to provide or produce risk-less risk. In fact risk is rising to levels never seen before – system destroying risks – while the market itself is marching off their own economic cliff singing and dancing to rap music believing there is actually zero risk remaining at all.
GE Investors had a big wake up call as world wide new providers have eaten into GE’s failure to innovate in core industries as its old franchise model is dying. The problem is more systemic than measured quarter to quarter. But hey the economics are tea leaves the smarty pant younger crowd driving todays market choices in their digital super can’t actually understand. As the smarty pants with post graduate degrees KNOW EVERYTHING you can’t really mentor them much on what they may have over looked or forgot. Such deficiencies in economics are fatal.
Always have been. Always will be. Economics 101 there is NO RISK-LESS risk in markets. Markets go up and markets go down. Buy LOW and SELL out HIGH. Forget these box top rules and your capital will perish from the earth.
So today we have a boom. No question there.
How long will the boom continue?
My answer today remains the same. IF CONGRESS passes Tax reform and fast the boom could continue for years. If Congress fails to pass tax reform the boom could end this Spring with a hard landing.
As this is a close time. You must decide what you are doing to do. Are you going to stay in or get out. Sell HIGH.
You have to decide to let it roll or fold em at the cashier window in the casino.
While luck is always a factor timing is everything.
The market is not smart. The market is abused by software. Now the market is distorted. The market will at some time rebalance from the abuse. The market will rebalance. That will be a time when software modeling is swept under new global regulatory frame works that simply do not exist today. The digital up ramp was too fast and the old model of regulating paper was sufficiently complex it lacked adaptability to the digital divide and AI software that today manages trillions in side bet trading to manipulate and influence price in all asset classes seeking a risk-less risk outcome. The smarty pants did not get it right however. As there is no RIGHT to system abuse in core economics. Profit is a mindless driver without social borders for the profit.
Competition – profit is the only thing and profit occurs at any cost to achieve it as a sole outcome. Mindless profits in the casino.
Cooperative – profit is achieves as an outcome of highest benefit to the core customer being served always. Huge difference.
Competitive Capitalism is dying and cooperative capitalism is thriving.
The rip tide is the sea change between mindless software without regulatory restraint casino capitalism, competitive capitalism or the revolution into social and awake COOPERATIVE CAPITALISM with integrity inside the model.
One can see a warfare of two currents of money super pools dividing int he market space as if a giant earth quake was moving plates around the water planet. The earth quake is in the mind and the box top rules for forward economic structure globally.
Eventually a NEW REGULATORY FRAME WORK WILL EMERGE. Will that new frame work be as a consequence of world war with massively reduced populations, or before the world war as a sane way to preclude that awful outcome for human kind? IT is all in the thought center that this outcome is decided.
The immediate life or death forward system issue – is tax reform as stimulus or not so much. Prosperity or poverty for the masses is the outcome of that reality.
So as I reported. The Dice are rolling. How they land no one can predict. I suggest we truly brace ourselves for impact from the software divide in the casino capitalism market. We may roll up against a tsunami powerful enough to derail the software train.
Passive Investment is an uncontrolled new experiment in global economics, with no certain or predictable outcome moving forward where distortions in market spaces are spiraling to instability, until a new regulatory frame work moderates the tendencies of greed itself.
The economics are complex.
The forward outcomes are not all that complex. They are results of system abuse.
Today we have the larger SUPER BUBBLE in all asset classes ever.
We also have the larger Debt in the system the SUPER DEBT BUBBLE.
We predict when the SUPER DEBT BUBBLE BURSTS the post world war ii system dies. The banks fail and the world order moves toward world war. Why? Because the G 100 would not cooperate to develop a new digital regulatory frame work in a timely manner.
This failure of POLICY created abuse to core economics globally.
Software dominated markets distorted the core economic globally at fantastic levels never seen before in time frames never experienced before. As profits where being made by software and AI everyone was blinded by paper profits that Super Crash wiped out.
No one saw it coming.
They never see it coming though.
So we watch the up and up and up as if gravity were a thing of Alzheimer patients – a crazy idea as insane as say religion?
Well there IS a God.
And a day of reckoning for our sins.
When that day comes it is such a surprise.
The Box top rules win every single time.
The economics will rebalance from the system abuse.
You do not need to believe that.
The Flash Flood doesn’t care what YOU Believe as all the materials are just washed away down river.
Economics does not care why lie you believe in.
The truth will always prevail.
You have the truth on passive investing – its a bad bad deal and the seeds of system death for the world are now fully sewn.
Berny Dohrmann – Danger WARNING and WHY it all matters today