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Sunday, September 6, 2009

Insanity keeps marching

They made a lot of noise at the G 20 meeting but basically nothing has been achieved as the countries with the biggest radioactive outfall GB and USA are blocking the attempts to stop the insanity of overpaid nerds who wrecked the global economy for the sake of their on Lambo or Porsche. Nothing really changes and only phony and vague promises are made with have no substance. Following is a sample of how tricky things are as a Goldman spin off (AQR) stock manipulation entity is describing how they intend to do more of that pervers trading until the next black swan comes. Its amazing how stupid smart people are or how greed can suck out any IQ since that are the same principles LTCM was trading on it works for a time until it doesn't only that the taxpayer pays the bill always and moron polticians who always seem to get away with it keep doing it.

excerpt from zerohedge

Momentum Chasing Quants Explain Their "Strategy" And Pray The Electrified Grid Keeps Sleeping


If you ever needed to see a formalized definition of what momos are and why they believe chasing momentum is actually a credible strategy instead of a self-perpetuating bubble that sucks many of their kind in, until the musical chairs game stops and then you have a mad dash for the fire exits, read the below press release by AQR, issued when Cliff Asness' fund decided to go pedal to the metal in momoism. And keep in mind Cliff is not alone - these are the same "strategies" that gun up the market every day at 9:45 am, noon and 3:30 pm, simply because "it has worked in the past." Then again, the question, just like in the RenTec case, is who is on the other side of the trade that recurs like clockwork each and every day and where just 60 minutes of trading accounts for over 70% of the entire intraday stock market movement over the past 6 months. Another key question to consider as more and more momos pile into the momentum trade is what happens when it fails and all the previously natural buyers become very unnatural sellers. Will be a sight to behold when the momentum flips. But for now, someone is very happy to keep feeding the momos, who, with Pavlovian regularity, keep coming back, until one day the Skinner box fails
AQR New Release.pdf 33.74 KB

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