Wednesday, August 28, 2013

NYC Financial district losing their trade liquidity

NYC thrives on liquidity, and deficit reduction with Ben being 50% of the bond market has driven the associated stock market volumes down. Illiquidity is the harbinger of crash. If these low volumes continue, brokers will reduce the number of asset classes they maintain in NYC, and that is a contraction by definition. This time, however, it is delever time in DC. All the perfect storm indicators are arriving at the same time, how odd. Here is a solution:
(Reuters) - Until a few days ago, it looked like a sure bet that the U.S. Federal Reserve would announce the beginning of the end of its massive bond buying program in September. Now, investors are less certain. The prospect of Western military action against Syria has sent stock markets worldwide reeling. Emerging markets have sold off and oil prices soared to six-month highs. And another potential showdown over the federal debt ceiling limit is looming this fall. Taken together, the developments have eroded the conviction of most Fed watchers that the U.S. central bank would start backing off its $85-billion-a-month bond buying program, known as quantitative easing, or QE, at its September 17-18 meeting. "It's a really big decision to start tapering because it's really like an exit strategy from QE and that's very hard for the Fed to do as long as there is a lot of uncertainty in the market like we're seeing right now," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.

Do the same as Greenspan, demand federal subsidies for wealthy brokers in NYC.

No comments: