WHAT ARE THE TIDES THAT MAKE THE MARKET VOLATILE AS NEVER BEFORE?
Allow a very old retired investment banker economist give you his opinion. We’ll sort things out.
First we have record sums in flowing from managed stocks including sinking BlackRock and similar tribes as AI takes over money. 90 % of all market is now AI within 10,000 super money pools managed by AI to humans.
We have year end portfolio adjustments I reported this summer taking place now. The balance of stocks at such peak profits will entice AI to move profits out as they also make money on the down side of the rope as they are fully invested on both up and down sides. For this reason big shifts in volatile trades move prices up and down only to recover quickly. We have seen 1500 day swings in index when markets were closed not long ago in 500 price point swings. Today it is nothing to have 500 up or down in a week or 72 hours. It is the new normal.
Today bonds spiked returns to highest level in years creating borrowing cost rises which move massive funds into higher bond returns and peak out markets in equities as borrowing cost is soaring. The Fed we have reported is raising interest way too fast all on fake news in their greed fest and way to frequently. This has always in shrinking liquidity reached a tipping point into recession and it will again in our opinion but not yet.
We have enormous growth in the HOLIDAY SUPER CYCLE coming. A sound bite on softer hiring in September after Labor Day is off set by sharp hires for Holiday workers coming into play now. The lowest unemployment in American in 50 years is only great and even greater news for all of the world.
The State of the ECONOMY is robust.
Profits are soaring double digits.
The expansion can afford higher interest and the FED is on track in its new frontier testing as she goes. They want it to slow down but not too fast and not yet.
2019 looks like a year of growth. If the Congress remains PROSPERITY versus GRID LOCK we will have INFRASTRUCTURE LEGISLATION PASSED and the prosperity rolls on into 2030. If not a recession in 2020 is a risk on item we’ll have to see.
The PARTY into the Holiday SUPER CYCLE is simply the best of any generations globally’s life time. I suspect China and the USA and India and the EU will create a new world order on trade and move NO NATION LEFT BEHIND into a reality. Never perfect but progress is unfolding. Deals are being finalized.
10,000 very smart people are working on all this seeking a way up and a way forward for all peoples everywhere. Protected fire wall trade and hacking IP globally is simply a no starter for CRIMINAL policies that now are being adjusted by who..by the USA globally. Using so many tools all at once. No more talk its real now.
I have a high confidence working in so many nations that the world is going to get better. I have called for a G 100 Regulatory reframe to work on the great issues of economic prosperity;
- Laws to remove and criminalized speculations from todays global market
- Laws to self correct unwanted wealth consolidations to maximize circulations
- Laws to protect IP for all nations
- Laws to assure NO NATION IS LEFT BEHIND
The new order given digital AI trading requires a G 100 ( all of us ) regulatory re-think not undertaken since the Great Depression. I think we’ll even get that done coming up. The SEC is fighting a global great fight but they need more authority digitally and more funding and more frame works. In my opinion. The recent move on Tesla was appropriate regulatory over sight under the current law. The problem is more real time oversight in digital markets which requires a regulatory re-think.
So you have seen a hit Friday on equity prices uneven and spread due to the spike in bond interest rates. I think the market will adjust and rise to record highs all the way to December within volatility greater than we all wish for and a new normal to profit making as volatility is the new profit driver to maximize profits. The SEC can’t investigate these volatility levels with AI trading without new authority and oversight budget growth.
Again in my opinion.
So the wizard is amok in AI trading and the regulatory frame has yet to catch up in fact. The SEC needs algorithms to catch algorithms. A new AI to regulate AI.
Think on that for a time then watch the Netflix PERSON OF INTEREST as a binge watch this Holiday…holy smokes when you apply it to markets money and regulatory frame works in 2019 and beyond.
Berny Dohrmann..THINKING OF THE FUTURE AND SAFE HARBOR FOR ALL