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Wall Street’s Trading Desks Endure Worst First Half in a Decade

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Re: Wall Street’s Trading Desks Endure Worst First Half in a Decade

#61

Post by thundergolfer »

lefstathiou wrote: post #9

A lot of our clients work in investment banks. There’s been a long (since the election) and growing narrative that the market will correct any second now... any second. Meanwhile the market has gone up up up. Part of that, I believe, is because most of these trading desks sit in one place - NYC, a super liberal anti trump environment - so it’s hard not to buy into the narrative and go risk off which means you would h…

Whether or not most capital is in pension funds (I doubt it), roughly 85% of the US stock market is owned by the richest 10%.[1]

I think it’s wrong to say these stock market gains have been enjoyed by “the people” when the richest 10% enjoyed the lion’s share of them.

1. https://en.m.wikipedia.org/wiki/Wealth_inequality_in_the_Uni...

Re: Wall Street’s Trading Desks Endure Worst First Half in a Decade

#62

Post by cbanek »

perl4ever wrote: post #44
mrep wrote: post #36

Earlier quoted context omitted.

> but I think share buybacks are another major reason for the disproportionate rise of US markets. US corporations have bought more of their own shares than anyone else in recent years Share buybacks are just a more efficient way of returning profits back to investors than dividends [0]. > Why can't corporations find anything better to do with that money? Why is capital spending relatively muted while productivity gr…

Share buybacks aren't necessarily done on a regular schedule nor do they imply the same sort of public commitment or are required to be paid for out of profits. Saying they are just a more tax efficient alternative to dividends assumes that they are exactly substituted for dividend payments in amount and timing, but I don't think that's the case in practice. Something that I've wondered is, if a company has excess ca…

Sometimes they do take the profits and put them into investments, or how they hold cash reserves for future purchases, payroll, etc. for example: https://en.wikipedia.org/wiki/Braeburn_Capital

Re: Wall Street’s Trading Desks Endure Worst First Half in a Decade

#63

Post by skybrian »

anm89 wrote: post #60
skybrian wrote: post #57

Earlier quoted context omitted.

You're making assertions without evidence. Which economic signals aren't working? Seems like some retailers going bankrupt lately are a sign that there is plenty of competition, in some sectors, anyway?

We are on an internet forum. What do you want him to do? Get his post peer reviewed?

Maybe link to a news article or two?

Re: Wall Street’s Trading Desks Endure Worst First Half in a Decade

#64

Post by intothev01d »

cm2187 wrote: post #12
lefstathiou wrote: post #9

A lot of our clients work in investment banks. There’s been a long (since the election) and growing narrative that the market will correct any second now... any second. Meanwhile the market has gone up up up. Part of that, I believe, is because most of these trading desks sit in one place - NYC, a super liberal anti trump environment - so it’s hard not to buy into the narrative and go risk off which means you would h…

We are back in a market manipulated by central banks. I call it “junkie mode”, you can tell because when there is bad economic news the market goes up, as it expects central banks to pour more liquidity/lower rates, lifting asset prices, like a junkie waiting for its fix. A healthy market goes down on bad economic news. I think you shouldn’t forget December last year, which was a pretty clear warning shot. The last 6…

You couldn't be more right. QE and the Fed propping the market up are why we're at where we are right now. Conversely, last December the tough talk, rate increases, and general hands off approach led to the sharp sell off. Until policy changes or something else drastically affects the market in some way, we're probably back to the slow grind up.

Re: Wall Street’s Trading Desks Endure Worst First Half in a Decade

#65

Post by mishu2 »

kanokun wrote: post #19
Iv wrote: post #16

Earlier quoted context omitted.

Advertisement is a cancer. It is time we forbid it instead of making it fund every website in existence.

It will end only when there is a viable alternative and as of now there is none.

What about all the projects being posted lately (quid, Mozilla with scroll, brave Browser, etc)?

I think the friction of getting started, both as creator and as contributor is still too high. I created a proof of concept site about this as well (https://news.ycombinator.com/item?id=20448087), but I don't think that's an ideal solution either, just maybe a little easier to get started. Any feedback is welcome, of course.

Re: Wall Street’s Trading Desks Endure Worst First Half in a Decade

#66

Post by betterunix2 »

dageshi wrote: post #26
fauigerzigerk wrote: post #22

Earlier quoted context omitted.

That's certainly part of it, but I think share buybacks are another major reason for the disproportionate rise of US markets. US corporations have bought more of their own shares than anyone else in recent years (Unfortunately I can't find the data right now). It explains a huge chunk of EPS growth. Of course that wouldn't have been possible if corporate balance sheets hadn't been better in the US than elsewhere (esp…

Perhaps this is what you get when when everyone learns the lessons of a truly severe recession/financial crisis? People anticipate a recession because timing wise one should be due, they actually plan for it and reduce capital investment and just do buy backs instead? So instead of a blowoff followed by recession, we sort of get a leveling off while everyone waits for the next shoe to drop?

"timing wise one should be due"

Recessions do not have a schedule. Moreover, the much bemoaned "slow recovery" during the Obama administration would totally change any hypothetical boom-bust cycle with its unprecedented policy moves.

Re: Wall Street’s Trading Desks Endure Worst First Half in a Decade

#67

Post by mruts »

kweinber wrote: post #53
mruts wrote: post #25

Earlier quoted context omitted.

The rule they are talking about is the Volcker Rule. Prevents certain banks from proprietary trading. They are only allowed to buy and sell for the purpose of market making. This, of course, is an incredibly stupid rule. There’s not really a big difference between market making and proprietary trading in the first place.

Proprietary trading is trading your own money with no obligation to transact or do any business with others. Market making is offering public liquidity as part of a market function. They are designated market participants with rules and responsibilities. They are not the same.

There's not a market maker in America that's selling and buying in order to provide liquidity.

You buy low, and sell high, that's the end of the story, for both proprietary trading, trading for clients, and market making. There's no fundamental, categorical difference between these functions.

The difference between prop trading and market making is fundamentally about the time horizon of exposure. Market makers are aiming to zero out their exposure through frequent trading, while prop trading attempts to express a view on the market in the long-term (seconds for market making vs minutes/day/years for prop trading).

I'm a professional quant, and I don't see much of difference, at least as far as the government is concerned.

Re: Wall Street’s Trading Desks Endure Worst First Half in a Decade

#68

Post by albertshin »

thundergolfer wrote: post #61
lefstathiou wrote: post #9

A lot of our clients work in investment banks. There’s been a long (since the election) and growing narrative that the market will correct any second now... any second. Meanwhile the market has gone up up up. Part of that, I believe, is because most of these trading desks sit in one place - NYC, a super liberal anti trump environment - so it’s hard not to buy into the narrative and go risk off which means you would h…

Whether or not most capital is in pension funds (I doubt it), roughly 85% of the US stock market is owned by the richest 10%.[1] I think it’s wrong to say these stock market gains have been enjoyed by “the people” when the richest 10% enjoyed the lion’s share of them. 1. https://en.m.wikipedia.org/wiki/Wealth_inequality_in_the_Uni...

Sure the power law holds in the stock market value ($), but you're confusing that it will hold with market returns (%) as well.

The rate of return (%) has been better for pension funds, IRA, 401ks invested in market wide index funds than the wealthy that have invested in active hedge funds. (This has been very true historically, especially net of fees.)

So it's fair to say that the wealthy have seen worse returns compared to the public. And that the public has seen the "lion share" of market growth.

Re: Wall Street’s Trading Desks Endure Worst First Half in a Decade

#69

Post by TuringNYC »

albertshin wrote: post #68
thundergolfer wrote: post #61

Earlier quoted context omitted.

Whether or not most capital is in pension funds (I doubt it), roughly 85% of the US stock market is owned by the richest 10%.[1] I think it’s wrong to say these stock market gains have been enjoyed by “the people” when the richest 10% enjoyed the lion’s share of them. 1. https://en.m.wikipedia.org/wiki/Wealth_inequality_in_the_Uni...

Sure the power law holds in the stock market value ($), but you're confusing that it will hold with market returns (%) as well. The rate of return (%) has been better for pension funds, IRA, 401ks invested in market wide index funds than the wealthy that have invested in active hedge funds. (This has been very true historically, especially net of fees.) So it's fair to say that the wealthy have seen worse returns com…

The wealthy don’t just invest in hedge funds, they also have index funds and plenty of real estate. Also, pension funds don’t just have index funds, many are invested in hedge funds. At a certain level of AUM and intent the allocations become similar. It would be wrong to say the common man has suddenly outrun the wealthy, wealth continues to be highly skewed, esp given asset inflation.

Re: Wall Street’s Trading Desks Endure Worst First Half in a Decade

#70

Post by TuringNYC »

lefstathiou wrote: post #39
CPLX wrote: post #34

Earlier quoted context omitted.

>I believe, is because most of these trading desks sit in one place - NYC, a super liberal anti trump environment That’s ludicrous. If you know anything about the politics and culture of the NYC finance crowd you know it’s super pro-Trump through and through. He is — literally — one of them.

I believe that is a demonstrably false position. I’ve worked on Wall Street in NYC for 11 years, this statement is not consistent with my experience. There is even data to support it -donations to candidates from these employees is public. Hillary raised 10-1 vs Trump. Link to article below, leave it to you to dig into the fulsome numbers. “Employees of the 17 largest bank holding companies and their subsidiaries hav…

You are looking at only part of the data and only at the part that supports your story. Donations are not all public, only donations from “little people” are public. The wealthy use Super PACS. From the Washington Post:

Meet the wealthy donors pouring millions into the 2018 elections By Anu Narayanswamy, Chris Alcantara and Michelle Ye Hee Lee Updated Oct. 26, 2018 Wealthy donors who have given at least $1 million contributed 74 percent of the $1.1 billion that has flowed this election cycle into super PACs, which can accept unlimited contributions from individuals and corporations.

While these groups cannot coordinate their advertising with candidates or political parties, they often work closely with official campaigns, and they are influential forces in this year’s congressional midterm elections.

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