Perception what an amazing word, and what an amazing effect it has on trading and the markets.

Perception what an amazing word, and what an amazing effect it has on trading and the markets.

We've talked about perception on this blog before and how important it is in the market. Yesterday was no exception, the guns were out to shoot down AIG and Lehman. Well certainly Lehman was DOA and AIG is certainly front and centerĀ  and in the gun sights of everyone who is involved in the markets.

Sometimes it's just smart to do nothing but sit back and watch. I think we should all take a collective deep breath and see what is happening to the financial icons of America.

AIG is different.

It is different from Bear Stearns, it is different from Lehman, and is a global concern with assets over $1 trillion. Now that's a lot of money in anyone's book. AIG does business in over 130 countries and has over 100,000 employees worldwide. No matter how you slice it, AIG has a huge footprint in the global financial community.

We are at a crossroads financially in the world, and if AIG goes under and declares bankruptcy it will have colossal ramifications for world trade and the financial system as we know it today.

Now don't get me wrong I believe in free market and I love to trade so what I am about to say may sound like a broken record. I again go back to my point that when the SEC removed the uptick rule it changed the trading world forever. The removal of this rule allowed hedge funds to basically hammer away at any stock that crossed their radar screen. I sincerely believe that the current lack of confidence and meltdown in the markets could have been avoided in many of the markets had this rule remained in place.

The hedge funds of today are just like the robber barons of yesteryear, they just gang up on a market and make it go their way.

Now I'm not a huge fan of regulation, but given the power of hedge funds we need to have some regulation to protect not only companies but also individual investors. If we do not put some checks and balances in place we will all be living in a very different world in the near future.

Okay, I'm getting off my soapbox now.

Perception often trumps commonsense in the marketplace. In the long run commonsense wins the day.

Adam Hewison
President, INO.com

9 thoughts on “Perception what an amazing word, and what an amazing effect it has on trading and the markets.

  1. I want to help you understand what it takes be in Perception. All they want you to do is put more money in an amazing word or they'll exit all your trades. Pay the markets to them.

  2. AIG is a solid company with over $1 trillion in assets and substantial equity, but it has been recently experiencing serious liquidity issues. The federal government's decision to provide assistance to AIG will help stabilize our precarious financial markets during what has been a tumultuous period of uncertainty in our economy.

    Lisa
    http://www.jobsearchdigest.com/hfsd

  3. Quite indeed a very educative and interesting informations as well as erudition being passed via this medium , I really must commend you Adam for a Brilliant farsight on the issues on ground , However i belive inavariably that irrespective of the woes and upturns being experience in the Financial markets at this time .. divine providence always takes its course , sooner or later what some group of people think will rob off many others will in a later day robb them off too ... Being an energetic and youthful African with an awesome perception about the turn around of things , i do believe in the adage that says , he who lives in a Glass house does not throw stones to the public ...hence you know the rest ... ..Adam i specifically have a question for you .. could you give me an insight of what the word Uptick rles means in the Financial Markets ??

  4. Whoever, whatever group of men allowed a single FINANCIAL institution to grow exponentially, with no oversight, to have so much centralized control over global finance with so many critical, different financial needs to be exposed. Is their a financial journalist anywhere who will do this?

    Didn't anyone in charge know that a clonal organism is subject extinction by its very nature? And was this done intentionally, so that those in charge for a few years could amass great fortunes by laws designed to enrich a very few?

  5. Awesome point Adam. Everyone knows that large lot buyers control the market; without some kind of regulation the hedge funds will always be able to skew things in their favor.

    From an socioeconomic standpoint, you can see a similar thing happening with the diminishing middle class.

    @W.E. there is no CFR, only rich people.

    @TimF, I hate futures. There is absolutely no reason why Joe Q Citizen should have any effect on what I pay to fill my grocery cart, or my gas tank; It's complete lunacy. Any market which has no actually tangible product should be abolished as a free trade instrument. I mean really, this is a market that doesn't have to grow revenue or make a profit. I can't even fathom how this is legit!

  6. There have long been the conspiracy theory that the Council on Foreigh Relations has been packing stratigic policy positions in the US Government with their people.

    One of the motives of CFR is to bankrupt the US and destroy the US Constituation. Through the heavy war costs, carless banking practices which the CFR encourged and other procedures we are getting there pretty fast. The icing on the cake for the CFR is the transfer of hugh bank dept to the taxpayers.

    The CFR controls much of the media, the mutions industry and the money thru the Federal Reserve System. They can do pretty much what they want. They can elect a president, manipulate the interest rates, stocks and control large banking intrest. I'm glad you, Adam, have a way to figure which way this market will go. WEW

  7. Ah yes, perception, so very critical. Possibly that which is "percieved", a majority of the time incorrectly. I do believe that is correct.

  8. I understand the uptick rule. However, as I have watched the markets and futures, I note that much of the time individual stocks follow the futures, on which there is no uptick rule. Since the futures drive so much of trading, both programmed and discretionary, why don't we institute an uptick rule on futures? Shouldn't we do the same for commodities? Oil, for example, since it often drives the markets. How about currencies? While we are at it, why not institute an uptick rule on selling long stock positions? Really, isn't selling of long positions the real driver in stock market downturns?

    Tim,

    Thanks for your feedback. Futures have position limits to avoid manipulation - stocks do not.
    Cheers,
    Adam

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