Wednesday, July 12, 2017

US stocks Rally As The Only Option For Pension Funds and Institutional Investors

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Months ahead? A little early, but a sumpercompter doesn't necessarily mean super 'smart'. The bears, including supercomputers, fail to recognize that retail participation remains near record lows. Liquidity, a sharp contraction in volume, remains a problem. Where do you put money if debt and the financial stocks that peddle it become illiquid during a debt crisis?  US stocks remains the only option for pension funds (in crisis already) and institutional investors as confidence in governance wanes. Gold, the domain of the individual investor because it pays no yield, will rise with stocks eventually, but confidence must deteriorate even further before it does.

Headline: A Supercomputer Is Betting on a Market Crash in the Months Ahead

One of the world's most powerful supercomputers, retrofitted for trading the stock market, appears to be betting on a crash in the months ahead.

The Financial Crisis Observatory (FCO) at ETH Zurich released its latest Global Bubble Status Report on July 1st. As we discussed with FCO’s director, Didier Sornette, on our podcast in May, they use one of the world’s leading supercomputers to monitor global markets each day for two distinct bubble-like characteristics: faster than exponential price movement and accelerating oscillations (see Podcast: Using a Supercomputer to Trade the Market).


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