by LV If it were run-of-the-mill criminal prosecutions, a couple of investment banks would not be so nervous. At stake is their bread-and-butter; i.e., profits from high frequency trading. Two former traders, Sergey Aleynikov and Samarth Agrawal, were accused of stealing proprietary software codes when they left Goldman Sachs and Societe Generale, respectively. Mr. Agrawal … Read more
by LV The market and public sentiment are stacked against those who take short positions in the stock market. The reason for this, of course, is that most market participants, such as mutual funds and retail investors, buy and hold stocks for the intermediate or long term. Some of these investors hedge their long positions … Read more
By definition, a plutocracy is government by the wealthy. The only thing worse than an outright plutocracy is a stealth plutocracy. The anger and hopelessness so many Americans feel stems from the fact that we are effectively being ruled by a plutocracy in the form of the Federal Reserve. The Federal Reserve Board of Governors … Read more
Shortly before the joint report of the SEC/CFTC was released to the public on September 30th, a meeting was held in the Oval Office of the White House. In attendance were the President, the Vice-President, the Secretary of the U.S. Treasury, and the Chief Economic Advisor. The President had been advised that the issue at … Read more
In the wake of the May 6th flash crash, senior managers gathered in the war room at the Securities and Exchange Commission. The mood was tense. A few days earlier, the Dow dropped almost a thousand points in a few minutes and scared the pants off the financial world. The SEC was completely blindsided. The … Read more
Everybody knows that retail and institutional investors are usually late to a trade. When they decide to buy, the wise guys are distributing or selling their shares to them and locking in their gains. When they sell, the wise guys are accumulating or buying their shares from them, again locking in their gains. How do … Read more
by LV Several Wall Street investment bank traders munched on their lunch, which was hand-delivered from Delmonico’s directly to their desks. The topic of discussion du jour was the SEC/CFTC’s report concerning the May 6th flash crash. Their mood was unsettled, even after pulling down several million dollars earlier in the day through high frequency … Read more
Heidi is the proprietor of a bar in Detroit . She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem, she comes up with new marketing plan that allows her customers to drink now, but pay later. She keeps … Read more