Czy GPW będzie potrzebna?

"Zacznijmy od banalnej konstatacji, iż zabicie OFE zmienia radykalnie atrakcyjność polskiego rynku z punktu widzenia emitentów. Faktyczne zgaszenie II filara systemu emerytalnego, mizeria III filara oraz ciągle daleki od siły znanej z innych giełd rynek TFI powodują, iż GPW straci ważną przewagę, jaką miała na innymi rynkami w regionie. Zwyczajnie to, co przyciągało zagraniczne spółki na GPW przestaje istnieć. W praktyce oznacza to, iż GPW właśnie przestaje być rynkiem regionalnym a staje się znów rynkiem lokalnym, którego przyszłość w największym stopniu zależy od oferty rodzimej gospodarki. Inaczej rzecz ujmując to, czy pula spółek będzie na GPW rosła zależy teraz głównie od liczby przyszłych debiutów kreowanych przez polską gospodarkę."


Millionaires survey: Go ahead, tax us more!

O tym, jak to (być może paradoksalnie) większość milionerów popiera większe opodatkowanie zamożnych oraz zwiększenie płacy minimalnej.

"CNBC's first-ever Millionaire Survey reveals that 51 percent of American millionaires believe inequality is a "major problem" for the U.S., and nearly two-thirds support higher taxes on the wealthy and a higher minimum wage as ways to narrow the wealth gap."


It's Not Just Banks That Are Too Big To Fail

"Following the financial crisis, worries about failures in over-the-counter (OTC) derivatives trading causing destabilizing runs and market crashes have led regulators to force most OTC trades to be cleared through central counterparties (CCPs). CCPs act like clearing banks, taking on their own books the risk of the seller defaulting. Sellers clearing OTC trades through a CCP can (in theory) default on payment without risking the entire system unravelling.

But this creates a problem. What happens if a CCP fails? Of course, the way CCP-cleared OTC trades are structured should minimize this risk. CCPs require sellers to post initial margin in the form of cash or government bonds to cover expected volatility during the lifetime of the trade, and they also require posting of variation margin in cash to cover daily price movements. As everything is fully margined in liquid safe assets, there should in theory be no shortfalls and no defaults.

But…..cash margin requirements don’t necessarily make the system safer. Firms with largely illiquid balance sheets, such as large insurance companies, can have difficulty raising the cash to meet large increases in variation margin. The principal cause of the failure of AIG in 2008 was cash margin calls on OTC credit default swaps that it was unable to meet. And this brings me back to the question – what happens if a CCP fails?"

Premia braku płynności

"Problem płynności był poruszany w badaniach ilościowych nad zachowaniem rynku akcyjnego. Na przykład jedną z hipotez wyjaśniających premię małych spółek jest sugestia, że wynika ona z ich niskiej płynności. Jak jednak podkreślają ICKH większość tego typu badań nie uwzględnia płynności jako czynnika kontrolnego.
Zauważmy trzy rzeczy: po pierwsze, inwestowanie czynnikowe opiera się na historycznej przewadze pewnego typu spółek (mniejszych, z niższymi wskaźnikami fundamentalnymi, z większym momentum), która może ale nie musi być trwałą tendencją. Po drugie, historyczna przewaga stóp zwrotu nie oznacza przewagi w każdym okresie – występują lata i serie lat, w których tendencje się odwracają. Po trzecie, z powyższych powodów każde inwestowanie czynnikowe jest inwestowaniem aktywnym – opiera się na założeniu, że jakiś typ spółek zachowa się lepiej niż cały rynek.
Warto także zwrócić uwagę, że turnover jest jednym z wielu sposobów mierzenia płynności. Można ją mierzyć spreadem pomiędzy ofertami kupna i sprzedaży, ilością kapitału potrzebnego do zmiany ceny i innymi miarami. ICKH zdecydowali się na turnover tak jak większość badaczy mierzy wartość albo przez wskaźnik cena/zysk albo przez wskaźnik cena/wartość księgowa."


Do retail traders suffer from high frequency traders?

"Using a change in regulatory fees in Canada in April 2012 that affected algorithmic quoting activities, we analyze the impact of high frequency quoting and trading on market quality, trader behavior, and trading costs and profits. Following the change, algorithmic message traffic, i.e. the number of orders, trades, and order cancellations, dropped by 30% and the bid-ask spread rose by 9%. Using trader-level data, we attribute this change to message-intensive algorithmic traders reducing their activity, and we show that their reduced activity had a negative impact on retail traders’ intraday returns, in particular on their returns from limit orders. We further find that institutional traders’ intraday returns from market orders increased."


“There Will Be Growth in the Spring”: How Well do Economists Predict Turning Points?

"Since the onset of the Great Recession, much of the world has been in a state of economic winter: nearly 50 countries were in recession in 2009 and 15 countries slipped into recession in 2012. After weak global growth in 2013, economic forecasters are predicting a rosier outlook this year and next. Can these forecasts be trusted?"

"As shown above, none of the 62 recessions in 2008–09 was predicted as the previous year was drawing to a close. However, once the full realisation of the magnitude and breadth of the Great Recession became known, forecasters did predict by September 2009 that eight countries would be in recession in 2010, which turned out to be the right call in three of these cases. But the recessions in 2011–12 again came largely as a surprise to forecasters."


High Frequency Trading: All You Need To Know

"So the bottom line: HFT is legal frontrunning... but also so much more.  In fact, like the TBTF banks, HFT itself has become so embedded in the topological fabric of modern market structure, that any practical suggestions to eradicate HFT at this point are laughable simply because extricating HFT from a market - which indeed is rigged but not only by HFTs at the micro level, but more importantly by the Federal Reserve and global central banks at the macro - is virtually impossible without a grand systemic reset first. Which is why regulators, legislators and enforcers will huff and puff, and...  end up doing nothing. Because if there is one thing the TBTF systemic participants have, is unlimited leverage to collect as much capital due to being in a position of systematic importance in a market, rigged or otherwise.
Finally, if push comes to shove, and the fate of HFT is threatened, watch out below, because if HFT's presence, glitchy as it may have been, led to the May 2010 flash crash and the subsequently unstable market which has exhibited at least one memorable crash every single month, then the threat of pulling the marginal trader which now accounts for 70% of all stock churn and volume (if certainly not liquidity) would have consequences comparable to the Lehman collapse."


Five explanations for Greece’s bond yield

"The biggest news in the sovereign debt world this week has come from Greece, which managed to sell some €3 billion in new 5-year bonds at a yield of just 4.95%. This is not what you might expect, given the macroeconomic situation:
Greece’s debt currently stands at about 320 billion euros, or 175 percent of GDP. It is rated nine notches below investment grade at Caa3 by Moody’s. Standard and Poor’s and Fitch rank Greece six notches below investment grade at B-.

So, how does one explain investors’ appetite to buy this debt at such low yields?"


Framework for Understanding Market Tops and Bottoms

"Today the market shows many of the elements that are present near market tops. In particular, sentiment is extremely bullish, investors are long and leveraged, and valuations are extended on a wide variety of measures. However, leading economic indicators are still not negative, and so far breadth and technicals have not deteriorated. The medium-term stock market returns are likely to be negative due to excessive valuation, but there is no imminent sign of a medium-term market top.

Tops are a process, not a single event. They tend to last a long period of time, and markets whipsaw traders and disappoint bears and short sellers. For example, many signs of a market top were clearly visible in late 1998, but it was not until the end of 2000 that most major market indices started to collapse. Likewise, many elements of a market top were evident in late 2006, but markets didn’t begin to collapse until very early 2008. "


The Trade Deficit: The Biggest Obstacle to Full Employment

"This analysis has four parts. The first discusses the basics of national income accounting and explains how trade deficits amount to a loss of demand that must be offset from other sources if the economy is to sustain a full-employment level of output. The second part outlines the origins of our large recent trade deficits. The United States has run trade deficits for most of the last four decades, but they became qualitatively larger in the late 1990s, in line with a rising value of the dollar. The third section discusses how lowering the value of the dollar relative to other currencies could make U.S. goods and services more competitive internationally. The fourth section addresses some of the implications of a lower-valued dollar and balanced trade. It has often been claimed that the United States must run a trade deficit because of the dollar’s status as a reserve currency. As will be shown, this claim misunderstands both the nature of reserve currencies and the workings of the international finance system."