Post by jeffolie on Dec 22, 2012 18:16:16 GMT -6
Today's gold market has changed significantly. Future changes most likely will be from more concentrated risk in derivatives for metals, stocks, bonds.
Over the many decades, the markets have changed. Human emotions remain a useful tool but less so as computer trading became obviously more important in the "Program Trading" 1989 crash and more so as time progressed to essentially push human traders into a tiny fraction of the markets.
Market tactics, strategies from the prior markets often fail in today's markets.
I focus on what works for my family with a constant surveilance for the so far timeless remark attributed to Mark Twain: " History never repeats, but sometimes it rhymes". Much like Bart's point of view, I agree that investors should go with what works for them as individuals. Personality traits remain very important as to how an investor decides to invest. "Know thy themself" remains important to happiness as well as investing.
Today's market rules and larger macro forces remain political such as Obama's re-election allowing the FED to promote QE infinity propping up the selected winners from this approach.
Swaps March 2013 Rule, Risk Concentrates
my jeffolie view: what could go wrong? maybe nothing, maybe down the road towards 2015-2016
===================================
Swaps ‘Armageddon’ Lingers as New Rules Concentrate Risk
On a good day, 27-year-old Bobby Timberlake at CME Group Inc. in Chicago rounds up $2.5 billion from the world’s biggest traders and banks such as JPMorgan Chase & Co. to cover their losses in the $639 trillion derivatives markets.
What happens on a bad day will test new rules in the Dodd-Frank Act designed to prevent a repeat of 2008’s credit crisis. Starting in March, as much as 79 percent of derivatives trades known as swaps must be backed by collateral and go through clearinghouses such as CME Group. Traders may have to post $927 billion with Timberlake and his peers at LCH.Clearnet Group Ltd. and IntercontinentalExchange Inc., whose role as middlemen is to ensure participants get paid.
This arrangement can withstand almost any shock, including defaults by four of the biggest lenders, according to the clearinghouses. Some bankers and researchers aren’t convinced. They warn unprecedented amounts of risk will be concentrated in a handful of clearinghouses -- some newly eligible for emergency Federal Reserve loans. If they fail, taxpayers who financed $1.2 trillion of bailouts last time could be on the hook again.
www.bloomberg.com/news/2012-12-21/swaps-armageddon-lingers-as-new-rules-concentrate-risk.html
Over the many decades, the markets have changed. Human emotions remain a useful tool but less so as computer trading became obviously more important in the "Program Trading" 1989 crash and more so as time progressed to essentially push human traders into a tiny fraction of the markets.
Market tactics, strategies from the prior markets often fail in today's markets.
I focus on what works for my family with a constant surveilance for the so far timeless remark attributed to Mark Twain: " History never repeats, but sometimes it rhymes". Much like Bart's point of view, I agree that investors should go with what works for them as individuals. Personality traits remain very important as to how an investor decides to invest. "Know thy themself" remains important to happiness as well as investing.
Today's market rules and larger macro forces remain political such as Obama's re-election allowing the FED to promote QE infinity propping up the selected winners from this approach.
Swaps March 2013 Rule, Risk Concentrates
my jeffolie view: what could go wrong? maybe nothing, maybe down the road towards 2015-2016
===================================
Swaps ‘Armageddon’ Lingers as New Rules Concentrate Risk
On a good day, 27-year-old Bobby Timberlake at CME Group Inc. in Chicago rounds up $2.5 billion from the world’s biggest traders and banks such as JPMorgan Chase & Co. to cover their losses in the $639 trillion derivatives markets.
What happens on a bad day will test new rules in the Dodd-Frank Act designed to prevent a repeat of 2008’s credit crisis. Starting in March, as much as 79 percent of derivatives trades known as swaps must be backed by collateral and go through clearinghouses such as CME Group. Traders may have to post $927 billion with Timberlake and his peers at LCH.Clearnet Group Ltd. and IntercontinentalExchange Inc., whose role as middlemen is to ensure participants get paid.
This arrangement can withstand almost any shock, including defaults by four of the biggest lenders, according to the clearinghouses. Some bankers and researchers aren’t convinced. They warn unprecedented amounts of risk will be concentrated in a handful of clearinghouses -- some newly eligible for emergency Federal Reserve loans. If they fail, taxpayers who financed $1.2 trillion of bailouts last time could be on the hook again.
www.bloomberg.com/news/2012-12-21/swaps-armageddon-lingers-as-new-rules-concentrate-risk.html