Monthly Archives: December 2012

In 2012, Many Felt the Market Was Rigged

Stock market specialists

In 2012, investors’ long-harbored suspicion that the stock market was a rigged game became something of a majority opinion.

In 2012, investors’ long-harbored suspicion that the stock market was a rigged game became something of a majority opinion.

This year, exasperation over the predominantly electronic mechanics of trading stocks, in which hyper-fast computer algorithms maneuver against one another for fractions of pennies collected over microseconds, boiled over. The level of disgust has gotten broad enough, in fact, that authorities might be prepared to rethink some of the basic rules and processes driving the system.

The opaque and complex structure for trading stocks electronically across dozens of exchanges and alternative networks has long been justified by industry leaders and regulators as the messy but logical result of investor-friendly reforms. Technology has enabled mind-melting speed, unfathomable communications capacity and brutal competition for order flow – all of which have made trading cheaper and faster than ever.

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Stocks lifted by hopes of fiscal-cliff deal

U.S. stocks extended gains into a second session Tuesday, rising on signs of progress on Capitol Hill in reaching an accord to avoid steep spending cuts and tax increases next year.

“We’re seeing negotiations continue. Eventually they will come up with a deal, as I don’t think the sides are that far apart,” said David Kelly, chief market strategist at J.P. Morgan Funds.

Equities have risen on increased odds that the uncertainty presented by the so-called fiscal cliff would soon end, taking one of the risks to the economic forecast off the table, Kelly said.

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China imbalance worsening, think tank warns

BEIJING (Caixin Online) — One of China’s top government think tanks warns that the nation’s economic imbalance has worsened alarmingly with investment growth overshadowing consumption.

In a report published on Dec. 12, the China Academy of Social Sciences (CASS) said the structural imbalance in the country’s growth model, measured by its self-devised index, has significantly worsened over the past decade and more.

CASS is a ministry-level research institute that advises the State Council.

Its index gauges economic imbalance on a scale of 0 to 1. The higher the index, the worse the imbalance.

Tepper: Stocks Cheap Compared to ‘Rich’ Bonds

U.S. stocks look cheap relative to the “rich” bond market, but the cost of no “fiscal cliff” deal in Washington could send equities down three percent, Appaloosa Management Founder David Tepper told CNBC in an exclusive interview on Monday.

But putting things in perspective, the hedge fund titan Tepper said on “Squawk Box” that he doesn’t see “very much downside” in the stock market.

“This market is a very good market. And once we can get over this hump, we could have Prince,” he said, making reference to the Prince song “Party Like It’s 1999.” The Dow rose about 25 percent that year.