HFT rules the broken market. If you still disbelief, please review what has happened over the past years. The exchanges will tell you HFT is providing liquidity, enhancing trading, but unfortunately, this is a great fallacy. Volumes have been diminishing over the past years, liquidity is drying up, and the broken market is becoming even more broken. Wonder if Eugene Fama has seen this chart? Perfect information, rational investors, yeah right. Must see action, continue. Courtesy Nanex via Zero Hedge.
While Greece is receiving all the attention, Sarkozy is desperately trying to improve his chances of winning the elections. Merkel too, also in France. The question is, what would a non Sarkozy France mean for Germany? Merkel is doing everything it takes to obtain the merkozy relationship. From Spiegel.
It looked almost as if it could have been a wedding when German Chancellor Angela Merkel and French President Nicolas Sarkozy walked into the conference hall of the European Council building in Brussels last Monday. They nodded at each other and exchanged pecks on the cheek, the other heads of state and government moved aside.
The two, of course, were not in Brussels to be betrothed. Rather, they were the main characters at yet another European Union summit. This time, they were seeking support for their fiscal pact, which together they had hammered out in the hopes that it could contribute to saving the EU and its common currency.
The Greek drama continues. We are still surprised people think the country will be saved. Beside the economic problems, the debt, no growth etc, there is a much bigger problem. The mentality of the Southern Europeans is the biggest enemy of reaching The agreement. People can not agree on sharing a parabolic antena, how do you expect to reach a deal on the future of the country. The blame game is on, and soon, the biggest enemy will be the creditors. Now, the country is blackmailed into war. Video with Eva Kaili, a Greek member of parliament below.
Guest Post by Macro Story.
To say the past two months have been surreal is an understatement. While some will simply say we are in a new bull market and the economy is expanding I would argue something else. Earnings alone simply do not support this stair step climb in equity. Some say the central banks are behind this move and will not let the markets drop until the election.
Sorry but that is too tin foil hat for me. If the central banks were so powerful how could they not hold the markets up in 2008? What finally brought down the global financial system were stock prices for those institutions trading at near zero in some cases. The banks were in essence shut out of the capital markets and therefore a “semi nationalization” was needed to replenish capital levels depleted by falling asset prices.
Must read things that make you go hmmm. Courtesy W Grant.
Interestingly enough, the Fed’s very own Groundhog Bailabankout Ben testified before the House Committee on the Budget on February 2nd and, having been dragged from his burrow into the daylight, Ben saw all kinds of shadows:
While conditions have certainly improved over [the last two and a half years], the pace of the recovery has been frustratingly slow, particularly from the perspective of the millions of workers who remain unemployed or underemployed. Moreover, the sluggish expansion has left the economy vulnerable to shocks…
The outlook remains uncertain, however, and close monitoring of economic developments will remain necessary…
Although real consumer spending rose moderately last quarter, households continue to face significant headwinds. Notably, real household income and wealth stagnated in 2011, and access to credit remained tight for many potential borrowers…
…we still have a long way to go before the labor market can be said to be operating normally. Particularly troubling is the unusually high level of long-term unemployment: More than 40 percent of the unemployed have been jobless for more than six months, roughly double the fraction during the economic expansion of the previous decade…
The French government and two state-controlled entities are in the home stretch to create a new municipal lender from the remains of troubled Franco-Belgian bank Dexia, but they have yet to agree on the price of a key asset, http://ftalphaville.ft.com/thecut/2012/02/06/868871/resolution-on-dexia-nears/
The European Banking Authority is to challenge a significant proportion of the capital restructuring plans put forward by the continent’s leading banks to meet tough new capital requirements, the FT reports http://ftalphaville.ft.com/thecut/2012/02/06/868711/eba-to-challenge-banks-capital-plans/
Carlyle Group has installed a leadership pairing at its Middle East and north African arm as the private equity group reframes its investment strategy, focusing on the region’s main growth markets in Turkey and the Gulf, http://ftalphaville.ft.com/thecut/2012/02/06/868721/carlyle-to-focus-on-turkey-and-saudi-arabia/
Banco Sabadell, the Spanish lender, has begun sounding out investors about a rights issue worth up to €1.2bn and has met investors in London ahead of finalising the rights issue launch, reports the FT, http://ftalphaville.ft.com/thecut/2012/02/06/868671/sabadell-poised-for-e1-2bn-rights-issue/