Juggling Dynamite

It took the whole of Black Monday for the Dow to fall 23 per cent, as brokers on the floor of the New York Stock Exchange looked in vain for buyers at lower and lower prices. In today’s high-speed world, crashes can come and go in moments, and trading firms can be taken to the brink of collapse by an errant piece of computer code. The FT’s Stephen Foley speaks with ICAP managing director Kenny Polcari, Getco chief technology officer Jon Ross and Canadian regulator Susan Wolburgh about how such events are influencing the marketplace.
Here is a direct link.

With trillions of (tax-payer funded) monetary stimulus sloshing around the global financial system, traditional economic theory would predict an increased money velocity moving through the real economy. In fact as shown in this updated chart of the US M2 Money Stock, the multiplier effect for the real economy has never been lower.  What central bankers are doing today is not economic stimulus.  In fact there is evidence that their monetary experiments are actually slowing economy activity:  each tranche of QE has caused fleeting bursts of commodity inflation which have caused companies to contain costs by reducing payroll expenses.  Central bankers are moving in direct opposition to wage growth today.

Billionaire investor Wilbur Ross weighs in on Citigroup shake-up and says banks will probably return to a simpler business model. Here is a direct link.