Has Retail Investor Confidence Been Destroyed?
The Market Ticker ® - Commentary on The Capital Markets
Posted 2012-08-02 12:26
by Karl Denninger
in Editorial
Ignore this thread
Has Retail Investor Confidence Been Destroyed?
 

Probably.

The "Knight of the living dead" yesterday in the dislocation at the open is just the latest saga n a broken market.  We now know that (at least if nobody's lying) Knight had a computer problem that led it to lose about $400 million.

Basically, instead of being a liquidity provider (that is, if you bid for a stock it's on the other side provided it can make money) it reversed that role and started taking the other side at a loss.

The loss was large and immediate.

Then you have the Facebook IPO.  And the flash crash.  And the HFTs.

The problem is that there's utterly no indication that anyone on the regulatory side will put a stop to it, and yet the entire perspective on this is not analytical accuracy but simply speed.

Being first isn't anything but an arms race.  It's not a matter of knowledge, it's not a matter of anything special -- it's just a matter of firepower.

There is no market folks and there is no reason to be in it, especially if you're trying to "invest for the long haul." 

Yeah, I know, Bernanke and everyone else are trying to force you into the stock market by destroying any other ability to earn a return. 

But you're still volunteering to "try to earn a return" and if you know you're walking into a shark tank -- and by now you do -- who's fault is it when you get bit in half?

Discussion below (registration required to post)
 

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User Info Has Retail Investor Confidence Been Destroyed? in forum [Market-Ticker]
Oldno7
Posts: 2138
Incept: 2008-11-14
Gold
RECALL STATE USA
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I am and have stayed away from any instrument that can be traded intraday and no stocks just bonds at this time. Karl as you have said this a day traders market and good luck to those of you that venture into the shark tank.

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IT'S THE SPENDING STUPID The US must become less a government of men, and more a government of LAW.
When people lose everything and have nothing left to lose they lose it -Gerald Celente
Kylafoon
Posts: 2457
Incept: 2009-02-05
Gold
Zombie Portal Lookout
Online
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Closed all of my positions Jan 26. '05 - '10 traded approx $20k -$40K/trade,
8-14 X per year.
As far as I am concerned this market is totally ****ed - and it
appears to be ****ed forever.
I am convinced that the corruption, manipulation, thievery,
and fraud has completely saturated the markets permanently.

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"...But whenever we see things done wildly, but taken tamely, then the State is growing insane..." - Gilbert Keith Chesterton 1910

"I found a flaw in the model that I perceived is the critical functioning structure that defines how the world works." - Alan Greenspan, October 2008
Steinbeck
Posts: 115
Incept: 2009-03-04

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Until I see lots and lots of handcuffs; I will never put one penny into this rigged game.
Imustbenutz
Posts: 283
Incept: 2010-11-04
Green
Absurdistan, USSA
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Loss of Confidence is cited by many of the true experts (not the pundits) as the trigger for the Global Economic Meltdown.

TickerCon 1 coming soon.
Nevertoolate
Posts: 1219
Incept: 2007-08-26
Gold A True American Patriot!
San Antonio de Bexar de runover with illegals, Texas
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The second mouse gets the cheese.

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"Socialist never mind stealing, as long as they are the ones doing the stealing. They never mind lying, as long as they are doing the lying."-Mannfm11

Before you attempt to beat the odds, be sure that you can survive the odds beating you.
Aztrader
Posts: 6648
Incept: 2007-09-10
Green
Scottsdale, AZ
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Watching the premarket up 95 points and walking away for 10 minutes and coming back down 75, is enough to make a trader blow chow. This market is total BS and everyone one of these banksters should be arrested for intentional market manipulation. The insanity is getting worse and worse. They allow Bernanke to pound rates to zero destroy everyones passive income and then turn the last bastion of investing into a rigged casino that will chew you up and spit you out.
When will the people wake up and put a stop to this insanity............
Mayorquimby
Posts: 13909
Incept: 2008-09-18
Green
The Archaic Past
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When money is scarce/valuable you see much less bs.

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They who wish to hurt you, work within the law.
- Morrissey

Gold is theft.
Nevertoolate
Posts: 1219
Incept: 2007-08-26
Gold A True American Patriot!
San Antonio de Bexar de runover with illegals, Texas
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And their 401K contribution goes into an account not making Jack.

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"Socialist never mind stealing, as long as they are the ones doing the stealing. They never mind lying, as long as they are doing the lying."-Mannfm11

Before you attempt to beat the odds, be sure that you can survive the odds beating you.
Aquapura
Posts: 130
Incept: 2012-04-19

Land of 10,000 taxes
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...And their 401K contribution goes into an account not making Jack...

Exxxxactly! What's the middle class guy trying to save for his retirement to do? My employer has a 401K match, do I just leave that $$$ on the table and stay out of the market, do I invest in our $hitty fund options or dump it into a money market?

I speculate with cash that I can afford to lose and have other money moving in and out of dividend paying equities in search of yeild but anything in a savings acct isn't earning dick.

Ladyliberty
Posts: 100
Incept: 2012-05-08

Wisconsin
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What If There Was No Cash?

http://seekingalpha.com/article/760001-w....

No doubt about it bernanke is desperately trying to push the suckers back into the market but I'm not about to take the bait!

btw what are the banks afraid of if they are solvent?

Banks urge Congress to extend crisis-era deposit insurance

http://www.reuters.com/article/2012/07/3....

Banks Are A Financial Disaster For Both Shareholders And Depositors

http://problembanklist.com/banks-are-a-f....


Why Banks Will Continue To Blow Up

http://problembanklist.com/why-banks-wil....

OMG it's worse then we thought...

"The Fed has effectively replaced large segments of the market with itself -- it bought 77% of new federal debt in 2011, my calculations show"

http://money.cnn.com/2012/08/02/news/eco....

The depression is here — it’s just invisible

http://www.marketwatch.com/story/the-dep....
Inline
Etz
Posts: 13889
Incept: 2007-06-26
Silver
LA
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No loss of confidence here.

Au contraire, I'm more confident than ever that bankers are thieves and regulators are corrupt.

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Legal chicanery and beneficent darkness are the banker's stoutest allies - F.Pecora.

Jstanley01
Posts: 8176
Incept: 2008-07-30
Silver A True American Patriot!
San Antonio, Texas
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You can't cheat an honest man. ~P.T. Barnum
Quick
Posts: 112
Incept: 2008-03-08

southeast
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This goes directly to the thread about starting a business less the borrowing --- THERE IS NO WHERE TO FIND A RETURN ON INVESTMENT.

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