Andy Peters
Well-known member
Script said:
Yeah, the whole concept is rather post-modern.
-a
Bitcoin
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Yeah, the whole concept is rather post-modern.
-a
Andy Peters
Well-known member
sodderboy said:
An asset is an asset.
-a
As i mentioned the other day several states are clamping down on the absence of regulated currency controls. people will always try to play some angle or the other to get around the rules.
JR
JR
Pip
Well-known member
Anarchy and revolution like patriotism the last bastion of scoundrels. The only revolution in history that resulted in a truly new approach to government was the one that started this country. So far hows it going? Pretty good I think. Is the concept flawed or are the people monitoring the concept hmmmm?!
JohnRoberts said:
Glad to see that 60 minutes has finally gotten on board and discovered high speed trading. But they are just pimping a new book, not doing any real investigative work.
My suspicion is that the HST is mainly a drag on the large institutional traders who make large volume trades so are ripe for front running. This still affects every person with money in a mutual fund or IRA since these are the large institutional traders being front run by the HST. It is interesting to see the economic impact of this. They force large funds to pay too much for stocks, so the price appears elevated, while that sliver of cost difference gets drained away from the markets.
It is interesting to see how this works... they use computers to constantly send out sham buy and sell orders to probe the markets and get up to the mSec price information. They then use this superior price information to arbitrage large trades coming from the big fish.
They could shut this down in a minute by charging a fee for cancelled orders (something like 90-95% are sham trades). Another way to stop this is apply a capital gains tax that inversely related to the holding period. If you flip the trade in fractions of seconds, pay through the nose, If you buy and hold even for a few hours you pay nothing extra.
JR
PS: speaking of current events I had to change the channel when they were airing the congressional hearings on GM. I am not a fan of GM, and even less so since the government bailout, but I am sympathetic to Barra because she is an engineer. One of the congressmen questioning her gave a little speech about how he was a manufacturing engineer before so he "understood" such matters. From his questions he clearly didn't, as they tried to play sound bite gotcha with Barra. GM screwed up before the bankruptcy (is anybody shocked?), it will be interesting to see how this plays out.
Charging a fee for cancelled orders, yep, or even better: tax it.
Yes, 90 to 95% of orders are sham, while 80 to 85% of all trades (or even more by now) are made (decision to buy/sell) by computers, not humans. Sounds scary, but it's good to know that it is humans after all who program the algorythms. And this makes it less scary -- actually, it even makes it kind of predictable (to some degree, at least), although at a completely different level.
I don't believe in a gold standard per se (maybe a mix of assets); anyway, I for my part will hold on to the very few gold mining stocks that I have in the portfolio.
Where's the Bitcoin exchange rate these days? Oh my, I think I couldn't care less right now.
Yes, 90 to 95% of orders are sham, while 80 to 85% of all trades (or even more by now) are made (decision to buy/sell) by computers, not humans. Sounds scary, but it's good to know that it is humans after all who program the algorythms. And this makes it less scary -- actually, it even makes it kind of predictable (to some degree, at least), although at a completely different level.
I don't believe in a gold standard per se (maybe a mix of assets); anyway, I for my part will hold on to the very few gold mining stocks that I have in the portfolio.
Where's the Bitcoin exchange rate these days? Oh my, I think I couldn't care less right now.
This high speed trading is actually an arms race with two sides. The big dog funds trading large blocks of stocks are using their own computers to shop around on the different markets to get best prices buying and selling. So this is a competition between dueling computer algorithms to outsmart each other.
As I already mentioned if they siphon wealth away from the market that can cost all of us (who are long the market). A larger fear is that these high speed computer wars where they make 20 sham trades for every real one, it is no surprise that this could lead to disastrous consequences if one or both sides makes a mistake. There still hasn't been a good explanation for the flash crash, and IIRC at least one high speed firm had a rouge program put them out of business.
I do not have the perspective to know is this is just a few drips on the floor, or a serious hole in the bottom of the ole wealth bucket.
I do not see anything good about this practice, and this seems a direct consequence of the stock market makers changing from non-profit to for-profit corporations. They profit from giving the HST pukes co-located access to the trade flow so they can play their games. I wouldn't mind paying a little more per trade to know there isn't some computer trying to game me.
There is one very new exchange (IEX) that claims to have a solution for this. They slow down the access for HST so everybody gets the same bid/ask information at the same time, negating their speed advantage. In theory this works, and will level the playing field for trading. One of the large consumer brokers just announced that they were adding access to this new trading platform to their options. Time will tell if this gains any traction. I can not imagine the other large exchanges that are in bed with the HST to play nice with this new guy, so liquidity and fill rates may suffer.
I much prefer this free market solution to the government stepping in to save us... I do not like the knee jerk suggestion from the politicians to tax all trades. Yup that sounds typical.
JR
As I already mentioned if they siphon wealth away from the market that can cost all of us (who are long the market). A larger fear is that these high speed computer wars where they make 20 sham trades for every real one, it is no surprise that this could lead to disastrous consequences if one or both sides makes a mistake. There still hasn't been a good explanation for the flash crash, and IIRC at least one high speed firm had a rouge program put them out of business.
I do not have the perspective to know is this is just a few drips on the floor, or a serious hole in the bottom of the ole wealth bucket.
I do not see anything good about this practice, and this seems a direct consequence of the stock market makers changing from non-profit to for-profit corporations. They profit from giving the HST pukes co-located access to the trade flow so they can play their games. I wouldn't mind paying a little more per trade to know there isn't some computer trying to game me.
There is one very new exchange (IEX) that claims to have a solution for this. They slow down the access for HST so everybody gets the same bid/ask information at the same time, negating their speed advantage. In theory this works, and will level the playing field for trading. One of the large consumer brokers just announced that they were adding access to this new trading platform to their options. Time will tell if this gains any traction. I can not imagine the other large exchanges that are in bed with the HST to play nice with this new guy, so liquidity and fill rates may suffer.
I much prefer this free market solution to the government stepping in to save us... I do not like the knee jerk suggestion from the politicians to tax all trades. Yup that sounds typical.
JR
I think this is exactly what happened back in 2009, at least in part, and then again to lesser extent in 2011 (US default). Computers programed to mass-sell if prices drop below a certain level (stop/loss orders) -- and then all operators around the world panicked at the same time, seeing their portfolios thinning out at accellerating speed and unsure whether they should pull the plug (no time to reprogram) or wait and sell even more with increasing losses. Well, at least some parties did not pull the plug and later went shopping for real cheap...
(1) I think Europe tries to "solve" this (haha!) by giving out licenses: the bigger the trader, the more expensive the license. And several stock markets, or rather selected stocks, have repeatedly been suspended from trade for a day or two (at least in Spain) to prevent chain reactions.
(2) I too wouldn't mind paying a little more (like what: 0.1 to 10 cents per trade?), it's better than being beaten by a computer (by what: 0.1 to 10 cents?). Either way, I think I can afford. But I rather pay it to the state as tax [-- states sure are not our saviours(!), but if they positively assure me and then actually do administer the money to the greater good of the people(!!), and if they don't I'll vote for the other neck-tied scarecrows next time --]] well, then I prefer taxation rather than giving it to some caffe-latte art aficionado free-market junkie brokers.
(3) The IEX idea sounds interesting; however, it's a free market and as such it knows many "legal" ways to elegantly get rid of unwanted competition.
But you are absolutely right: high-speed trading is a problem. Ever noticed that sometimes prices drop totally without reason by up to a couple of dollars/euros/pounds/whatever, just to go up again (and even to a few cents higher than before) only a few minutes later? Highly dubious activities that look much like "attacks". It's called a "bear trap": shamming people/computers into selling by tricking/activating programmed stop/loss orders, i.e. placing massive sell orders without execution and then go buy for cheaper. Absolutely great
Sometimes it's caused by "auctions at opening of market" on the other side of the globe, but not always. Anyway, most high-speed trading is about cents and fractions of cents (a game that private investors can't keep up with). But, whenever I see such a curve (sudden, massive dip of up to 10 minutes) I feel assured that the price of that particular stock will continue to rise, cos someone has an interest to massively buy into it.Anyway, my personal decisions are entirely independent of all this. I look at fundamentals and than at charts and trends.
Either way, we are talking fractions of cents here and maybe a few dollars at a time, not hundreds of dollars disappearing as with Bitcoins.
News flash... we are saved now.. Eric Holder is redefining this as "insider trading" so he can pursue criminal charges.
I think this new book is hyperbolic to sell books, and scaring small investors unnecessarily about the market calling it "rigged". IMO it isn't rigged while there are some parasites we need to manage down. If they are allowed to keep siphoning billions of dollars of wealth from the market every year, this is wealth that would be in the real buyers and sellers pockets. I am all in favor of clever people making money because they are smart but this seems contrary to free market principles of a level playing field.
JR
The big lie about HST is that they provide market liquidity. At any sign of weakness they are the first ones out the door. So far circuit breakers are managing to prevent crashes. I wouldn't mind bringing back the up-tick rule.Script said:
I absolutely do not favor a transaction tax. That is the holy grail of the left always searching for more revenue and in classic economics if you tax something you get less of it. We do not want less economic activity. I repeat if there is some way to tax "just" HST, like my "very short term" capital gain tax. If you buy and hold for any duration there should be no tax, If you buy and sell in mSeconds we need to doscourage that. IMO
I expect IEX to get ganged up on by the other exchanges since it is a direct threat to their business model. I do prefer this "self-help" private market solution. In my judgment it is the big traders like mutual funds and huge retirement accounts that trade these big blocks of stock, so they are both motivated and have the resources to respond. The government does have a place in regulating exchanges and have been mysteriously tolerant of HST. Now that this has gained popular attention (finally) they will probably start arm waving, (like Holder is).
Yes the trade flow during the day is probably reflecting dueling computer algorithms. I heard a number reported on a business channel that HST were skimming some $7-8 B a year from frothy markets, now they are down to only $1B a year and hopefully trending down. I think a lot of the dumb money is still out of the market (since 2007-8), and big traders are getting smarter. Another vehicle for these HST that is getting shuttered is advance information. They have gone to great lengths to game government reports a few mSec sooner, and even paid private companies for an advance look at market moving data they publish.But you are absolutely right: high-speed trading is a problem. Ever noticed that sometimes prices drop totally without reason by up to a couple of dollars/euros/pounds/whatever, just to go up again (and even to a few cents higher than before) only a few minutes later? Highly dubious activities that look much like "attacks". It's called a "bear trap": shamming people/computers into selling by tricking/activating programmed stop/loss orders, i.e. placing massive sell orders without execution and then go buy for cheaper. Absolutely great
I think this new book is hyperbolic to sell books, and scaring small investors unnecessarily about the market calling it "rigged". IMO it isn't rigged while there are some parasites we need to manage down. If they are allowed to keep siphoning billions of dollars of wealth from the market every year, this is wealth that would be in the real buyers and sellers pockets. I am all in favor of clever people making money because they are smart but this seems contrary to free market principles of a level playing field.
+1, Use fundamental analysis to decide what to buy or sell, technical analysis to decide when. If there is a huge disconnect between what fundamental and technical analysis is saying something is wrong. If you think about it HST is pure trading on technicals but using high speed computers to gain an edge in recognizing technical trends..
JR
Well, I just saw this... one experience to have in mind.
A video:
https://www.youtube.com/watch?v=vnm4xFC2xNo
And an article about that:
http://www.tested.com/tech/concepts/460601-where-we-went-wrong-buying-bitcoin-atm/
JS
A video:
https://www.youtube.com/watch?v=vnm4xFC2xNo
And an article about that:
http://www.tested.com/tech/concepts/460601-where-we-went-wrong-buying-bitcoin-atm/
JS
Andy Peters
Well-known member
Script said:Pah, who needs Bitcoins? We have Independence Coins now :
http://www.prnewswire.com/news-releases/independence-coin-is-first-digital-currency-backed-by-gold-267422021.html
Hello, Mr. Anthem (that name is a dog-whistle), now that the electronic infrastructure has gone tits up, I need my gold! But ... I can't prove that you have my gold because the electronic infrastructure has gone tits up.
-a
I own some GLD, a stock market equity that mimics buying and holding physical gold. It is down since I bought it, but more liquid than actual gold.
Bitcoin has been promoted as a store of value, because of a promise that quantity would be limited, but I have always been uncomfortable about promises even from people I know, and who is standing behind bitcoin?
The real game at play is to win some of the oligopoly revenue stream enjoyed by master card, visa, american express, where they grab a slice from every transaction made using them. Some of the big venture capital firms have invested in new bitcoin related ventures to try to challenge the old school credit card industry, and grab some of their pie.
I like the concept of a gold backed crypto currency. if they can combine the low cost, low friction electronic transaction, with a more stable valuation and real backing, I'm interested. While I'm a show me guy and the (gold) paint on this is still wet. If some real government would get behind a gold backed crypto currency it could be really big, but then that government could no longer inflate away their debt obligations. :
JR
PS: @ Andy, an old friend of mine has hoarded .22cal ammunition because he believes that will be the only currency holding real value after civilization goes tits-up. You can't eat gold but you can kill small game to eat with 22 longs. I don't know if 22 cal is strong enough to knock down the zombies or latest popular culture prediction of a possible future, but it will keep the neighbors in their own yards.
Bitcoin has been promoted as a store of value, because of a promise that quantity would be limited, but I have always been uncomfortable about promises even from people I know, and who is standing behind bitcoin?
The real game at play is to win some of the oligopoly revenue stream enjoyed by master card, visa, american express, where they grab a slice from every transaction made using them. Some of the big venture capital firms have invested in new bitcoin related ventures to try to challenge the old school credit card industry, and grab some of their pie.
I like the concept of a gold backed crypto currency. if they can combine the low cost, low friction electronic transaction, with a more stable valuation and real backing, I'm interested. While I'm a show me guy and the (gold) paint on this is still wet. If some real government would get behind a gold backed crypto currency it could be really big, but then that government could no longer inflate away their debt obligations. :
JR
PS: @ Andy, an old friend of mine has hoarded .22cal ammunition because he believes that will be the only currency holding real value after civilization goes tits-up. You can't eat gold but you can kill small game to eat with 22 longs. I don't know if 22 cal is strong enough to knock down the zombies or latest popular culture prediction of a possible future, but it will keep the neighbors in their own yards.
The jury is still out on Bitcoin ($426.00) as a currency replacement, but the block chain technology is being experimented with for use by big banks to track large derivative transactions.
Block chain embeds the transaction details and the status of the asset within the block chain digital data. If this gets widely adopted it could improve transparency and reduce banking/regulatory costs for some investment instruments.
JR
PS: My very small gold position is still down 34% since i purchased it so my single worst current holding, even with negative interest rates around the world and everybody trying to create more inflation. I'm still waiting to see how the world's central bankers unwind this prolonged low interest rate experiment, that is mainly ripping off savers. In the US if we subtract (low) inflation from (lower) interest rates we have negative real interest rates too. Interesting times.
Block chain embeds the transaction details and the status of the asset within the block chain digital data. If this gets widely adopted it could improve transparency and reduce banking/regulatory costs for some investment instruments.
JR
PS: My very small gold position is still down 34% since i purchased it so my single worst current holding, even with negative interest rates around the world and everybody trying to create more inflation. I'm still waiting to see how the world's central bankers unwind this prolonged low interest rate experiment, that is mainly ripping off savers. In the US if we subtract (low) inflation from (lower) interest rates we have negative real interest rates too. Interesting times.
Same here. I invested a tiny position into a mining company (I thought it's better than physical gold, either directly or indirectly). Gold and mining companies have seen an upward swing recently, but position is still in the red by 7%. Dividend yield does not sufficy to amortize. But I don't mind.
Gold had been hyped big time for too long, until indexes crashed two or three years ago. Now with state debts soaring (or rather debts being acknowledged as a problem -- either for real or as an imaginary problem), I suspect that big financial players and nations actually "manipulate" the gold price using futures and swaps etc, with the idea to go shopping for real cheap. Many industrialized countries have been observed stocking up their gold reserves. So much for that.
As for Bitcoins, or any other alternative way of electronic payment, I'd welcome it if it was transparent, backed and above all safe! However, I also like my bills and coins. Not any specific bills and coins for that matter, just the feel of filthy metal and crumbled paper. Call me old-fashioned, but if it was all just "hold smartphone to smartphone" for transaction and state administrators keeping count of it, I wouldn't know how to pay my neighbour for his volunteer garden work on my side of the fence -- just kidding
Gold had been hyped big time for too long, until indexes crashed two or three years ago. Now with state debts soaring (or rather debts being acknowledged as a problem -- either for real or as an imaginary problem), I suspect that big financial players and nations actually "manipulate" the gold price using futures and swaps etc, with the idea to go shopping for real cheap. Many industrialized countries have been observed stocking up their gold reserves. So much for that.
As for Bitcoins, or any other alternative way of electronic payment, I'd welcome it if it was transparent, backed and above all safe! However, I also like my bills and coins. Not any specific bills and coins for that matter, just the feel of filthy metal and crumbled paper. Call me old-fashioned, but if it was all just "hold smartphone to smartphone" for transaction and state administrators keeping count of it, I wouldn't know how to pay my neighbour for his volunteer garden work on my side of the fence -- just kidding
yup GDX is the ETF for gold miners to gain some leverage. The miners outperform when gold is rising, but have cost issues when gold's price falls below economic mining cost. I guess this varies from company to company. This morning I read about a gold mine in Africa that is shuttered because it is uneconomic to mine, but individuals illegally work the mines. There have been gun fights between competing groups of illegal miners. One company rep was killed (run over) by these illegal miners. Something like 100 deaths associated with the illegal operations, and 2 deaths in the legal working mines.Script said:
Gold is a bet against currency, but not really an investment. Perhaps miners can pay a dividend in good times, but golds price has been stubbornly low. Silver rising is supposed to confirm an uptrend in gold coming, but silver is conflicted, as they don't aggressively mine silver by itself, but get it as a byproduct of copper mining. Economic contraction world wide that reduces copper consumption, should reduce supply of silver, putting upward pressure on it's price, but this feels a little like gambling so I don't play the precious metals. My small gold position is to remind me of it still depressed price (from when I bought it).
Some central bankers are threatening to pull large denomination paper money from circulation so they can better see and control the money movement in the economy. I trust them about as far as I can throw them, but they don't trust us either.As for Bitcoins, or any other alternative way of electronic payment, I'd welcome it if it was transparent, backed and above all safe! However, I also like my bills and coins. Not any specific bills and coins for that matter, just the feel of filthy metal and crumbled paper. Call me old-fashioned, but if it was all just "hold smartphone to smartphone" for transaction and state administrators keeping count of it, I wouldn't know how to pay my neighbour for his volunteer garden work on my side of the fence -- just kidding
JR
dmp
Well-known member
I joined coinbase and bought some bitcoin a year or so ago thinking it could replace paypal for person-to-person payments where you trust the recipient. Haven't used them once in that capacity, however. It doesn't seem to be taking off other than purchasing illegal drugs off the internet - which I've read is thriving.
Turned out to be a great purchase though since the value of a bitcoin has gone up 65% since I bought it.
Turned out to be a great purchase though since the value of a bitcoin has gone up 65% since I bought it.
M
mattiasNYC
Guest
Script said:
I'm getting the feeling that transparency and privacy are anathema in the case of Bitcoin, but I could be wrong. To me it seems plenty safe so far. The only thing I can think of is someone having someway built into the system some way of profiting from it, meaning the inventor(s) of it.
As for it not being "backed" I'd say 'so what?', the dollar isn't backed by anything any longer either. I think that 'battle' was lost a long time ago. I for one think it's a bit absurd to only have currency that 'floats' in the sense that it isn't backed by anything with intrinsic value, as far as that is possible in principle.
