Remembering Why Markets Move

Personally feel sorry for those who will suffer as the ‘powers that be’ inject some more volatility…it is not the money managers, whose miserable performance (they now discuss ‘bonus risk’) continues, but the poor ignorant people who let them manage, manipulate, fold, spindle, and mutilate their savings.

Strong view: markets move because of foundational economics, but the amplitude and sometimes the direction is caused by the players in all the markets.  The boys and girls in the trading rooms get little for doing nothing, so any hint at a good rumor will move people’s pensions and all the derivatives wrapped around them like bathrobes after a Turkish massage.[less fee, of course].  And now we add the digital amplification, where the boys and girls have a party every night and instead of exchanging Tupperware or erotic toys they trade bifurcating morphing algorithms all to their own benefit.  We, the general ‘we’ cannot see either because we do not want to, or because two basis points never mattered before.  Now that the transactions are millions, the 2bps adds up to somebody’s holiday in some islands somewhere.