The stock market goes off-road

first_imgGAZETTE: News reports have blamed everything from last Friday’s jobs report and Janet Yellen’s last day as Federal Reserve chair to spiking federal debt, wage gains, rising inflation, and reaction to political uncertainty. Are any of these factors?GReenwood: I would say the fact you hear so many stories suggests that there was no news driving this. If there was news driving something, at best it was the beginning of some type of investor-driving mini-crash rather than the news itself driving a correction in prices. Markets don’t send messages. Markets are voting machines with lots of different people in them.GAZETTE: Reactions seem somewhat mixed as to whether this drop is just a blip of bad news or something more serious. How do you view it?GReenwood: A lot of people have lost money, and losing money is never a good thing. The silver lining in this is that investors do need to be reminded once in a while that there is risk in investing in the market. And over the past few years, those reminders have been few and far between. Investing in the market is real risk. GAZETTE: Why did we have such extraordinary growth from 2009 to now?GReenwood: Part of it was the recovery from the financial crisis of 2008, and the other aspect is the extremely high profit margins in U.S. corporations. That’s not to say that justifies the prices being high, but it explains prices going up. And probably it seems like a distinction without a difference. What I mean is that the profit margins drove prices high — however, probably higher than they should be.GAZETTE: So what will you be watching for to see where this is ultimately going?GReenwood: I guess over the next few days I’m going to be interested in understanding what various investors have done during the correction — who was buying, who was selling, who was wiped out, who was liquidated — because I think that’ll tell us much more about what happened, among investors and classes of investors. For example, these inverse-volatility products, that’s one area. The other type of product that people are talking about are the so-called risk-parity strategies. These are strategies that try to maintain a constant level of risk, and so when the level of risk goes up in the markets, they tend to be sellers. It will be interesting to see whether that was true. So the task is really trying to understand, I guess you would say, the “reaction functions” of different market players in this kind of environment when you have this kind of shock.This interview has been edited for length and clarity. Kennedy School paper matches performance across sectors to Trump policy stances Related After years of robust growth so steady that it often seemed endless, U.S. financial markets suddenly have been buffeted by fierce headwinds. Both the Dow Jones industrial average and the Standard & Poor’s index plunged on Monday. Although they regained much of that ground Tuesday, it appears that new, unexplained financial pressures are in play.Analysts quickly attributed the sudden drop to everything from skittishness over rising wages to recent jobs numbers and fears of inflation, uncertainty over political turmoil in Washington to warning the new Federal Reserve chairman against raising interest rates quickly. In other words, as screenwriter William Goldman once said of Hollywood’s unpredictable trends, “Nobody knows anything.”Robin Greenwood, the George Gund Professor of Finance and Banking at Harvard Business School, studies behavioral and institutional finance, with a focus on macro market inefficiencies such as price bubbles. He spoke with the Gazette on Tuesday about market volatility and what he’ll be watching in the days ahead to understand better whether this is a short-term adjustment or a lasting shift.Q&ARobin GreenwoodGAZETTE: As someone who studies behavioral finance, what do you see when you look at market activity?GReenwood: Behavioral finance, unlike classical finance, starts with the presumption that to understand prices you need to understand investors’ behavior, both what they’re doing and what they believe. The things I’ve worked on have been investor expectations, measurement of bubbles, and things like that. We did some work on trying to predict the end of bubbles. As an example, bubbles aren’t just periods where prices have gone up a lot. They’re also periods with a lot of volatility, a lot of trading volume, measures of speculation, issuance, and so on. We were trying to capture those things and ask: “Can you use that other data beyond just the prices to forecast what’s going to happen?” We had some limited success in using that kind of data. What we were really interested in was trying to capture that psychology. The challenge is it’s hard to do so in a historical way because the data changes. And capturing the mindset in, say, 1929 … but doing so in a way that’s systematic, so that we’re saying the same thing in 1929 as in 1999, is pretty challenging when it comes to humanizing it. HBS students use winter break to test fresh ideas around the world center_img A closer look at the post-election stock rally GAZETTE: How would you characterize what’s going on in the stock market, and why doesn’t anyone seem to know for certain why it’s happening?GReenwood: One factor is that if you look at the overall pricing of the stock market today, it is very high. Whether you do that on a price-earnings basis or any kind of adjusted-price basis, you come to that conclusion. That means you worry that the long-term returns to people who buy into the stock market … are going to be low. That said, high prices aren’t actually a great predictor of quick and devastating crashes. If you look at periods where we’ve had these crashes — 1987, for example … or all sorts of events that we’ve had over the past couple of decades — they seem to happen whether or not the market has risen a lot or not.So I think of this as perhaps more of a freak event. That said, the freak events tend to happen much more than one would predict in the stock market. People often talk about “fat tails.” What they mean there is that they try to characterize how much the market could be up or down on a given day based on its historical volatility. “Fat tails” means those big days happen much more often than one would think just from looking at the ordinary days.GAZETTE: What do you think is driving this movement?GReenwood: As to the specific forces that drove [Monday], I don’t know. I’m sure we’re going to be trying to figure that out. One of the things that was very unusual going into Monday was the period of incredibly low volatility. Prices just hadn’t been moving around very much. And when volatility is low, investors tend to borrow more, so they take on leverage. So I think it’s likely that we were in a more fragile market environment than we’ve been in in a long time, and that’s in large part because of investor behavior. One of the big pieces of news today is there are these inverse-volatility funds. These are funds that are betting on volatility continuing to be low. A number of them were completely wiped yesterday [Monday], gone to zero. That never happens.I would say that prices are incredibly high. They are not approaching the bubble-like territory that we were in in tech stocks in 1999. But, that said, prices are incredibly high. Whether there’s a further correction or not, we don’t know. Some of the behavioral indicators in 1999 you just don’t see today. My forecast for the stock market is not very positive, but I don’t know that I have anything to say about the next few weeks. “I think of this as perhaps more of a freak event. That said, the freak events tend to happen much more than one would predict in the stock market. “ — Robin Greenwood Market reactionlast_img read more

Police stun Americans by taking a knee with protesters

first_imgTopics : They are images that surprised and moved Americans: police officers taking a knee alongside protesters in the most widespread civil unrest to rock the nation in decades — and in doing so embracing an anti-racism gesture denounced by President Donald Trump.As Trump pushes for a crackdown on often violent protests over the death of George Floyd, police officers from New York to Los Angeles to Houston are making gestures of solidarity with demonstrators incensed at the latest case of an unarmed black man dying while in police custody.”I took off the helmet and laid the batons down. Where do you want to walk? We’ll walk all night,” Chris Swanson, the white sheriff in Flint, Michigan, shouted to a group of protesters on Saturday. Then Swanson did just that, setting off walking with them, to cheers. He even posed for a selfie with a young black protester, and gave the thumbs up sign.In Des Moines, Iowa, police chief Dana Wingert took a knee before a crowd of demonstrators along with other officers and explained it this way: “Us joining them in a symbolic way, that’s the least we can do.”Anti-racism demonstrators across the country have embraced the gesture made famous by former quarterback Colin Kaepernick who began kneeling during pre-game renditions of the national anthem in 2016, to protest police brutality against blacks and other minorities.Kaepernick was ostracized by the NFL over his kneeling protest, which earned him and likeminded athletes condemnation and insults from conservatives including Trump. Now, the police are emulating the protesters emulating the quarterback turned civil rights activist. In an intense scene captured on camera Monday in New York, the city’s white police chief Terence Monahan knelt and clenched hands with protest leaders, arms raised high, as a way to show support and shared outrage at Floyd’s death. “Moments like that are how I know we will find a way through,” tweeted the city’s mayor, Bill de Blasio, in response.Similar scenes have played out in Florida, Illinois, Missouri, Georgia — as well as in the capital Washington.Leading politicians have adopted the gesture, from Democratic presidential hopeful Joe Biden to the mayor of Los Angeles Eric Garcetti, who dropped to a knee along with a line of officers as they mingled with demonstrators near city hall on Tuesday. ‘We are here with you’The nationwide protests over Floyd’s death on May 25 have seen police charge against and fire tear gas or rubber bullets at protesters — a minority of whom have engaged in looting and vandalism in the most widespread racial unrest to hit America in decades.In some cases, the police outreach appears wholly genuine — a case of individuals pledging their solidarity with the anti-racism cause, and seeking an absolution of sorts for police abuses past.At other times, the kneeling has served to defuse soaring tensions — raising the question of whether it is more of a de-escalation tactic.Outside the Trump International Hotel in Washington on Monday evening, for instance, a line of police standing nose to nose with protesters took a knee as they were heckled by the screaming crowd.In Los Angeles also, a line officers were being shouted at by protesters before finally taking a knee, one by one, some of them smiling as they got to the ground.”You want to take a knee? We’ll take a knee with you because we are here with you,” the leader of the unit says. As he rises he shakes hands with a protester and urges the group to refrain from violence to protect the city.In Washington, a police spokesman told AFP the decision to kneel outside the Trump hotel was “organic in the moment and was not a scripted technique.”He also said police were “not facing disciplinary action” for embracing what is seen by many as a gesture of defiance to authority — even if video footage from a day earlier appeared to show one officer yanking a kneeling subordinate back to his feet.last_img read more

Arsenal impressed with William Saliba but have a few concerns after visits to London Colney

first_imgAdvertisement Comment The Gunners have largely been impressed with their summer signing’s phsyicality (Picture: Getty)Arsenal are keeping a close eye on William Saliba and have been impressed with his physicality, though there are reportedly a few areas of concern they hope to improve.The young French centre-back was signed over the summer and immediately loaned back to Saint-Etienne for the 2019/20 season, though was injured at the start of the campaign.He made his first Ligue 1 start shortly before the international break, keeping a clean sheet in an impressive display as Saint-Etienne beat Lyon 1-0. Metro Sport ReporterTuesday 15 Oct 2019 10:06 amShare this article via facebookShare this article via twitterShare this article via messengerShare this with Share this article via emailShare this article via flipboardCopy link6.4kShares Saliba visited London Colney to train during his recovery from a hamstring injury (Picture: Getty)Speaking about Arsenal’s signing of Saliba earlier this summer, manager Unai Emery said: ‘We’re delighted William is joining us. Many teams wanted him but he decided he wanted to come to us and be part of our future.‘He will stay in France next season for more experience and then we look forward to him joining our group.’More: Arsenal FCArsenal flop Denis Suarez delivers verdict on Thomas Partey and Lucas Torreira movesThomas Partey debut? Ian Wright picks his Arsenal starting XI vs Manchester CityArsene Wenger explains why Mikel Arteta is ‘lucky’ to be managing Arsenalcenter_img Saliba kept Lyon’s star-studded attack at bay in his last outing (Picture: Getty)During his initial hamstring recovery – which saw him miss the first seven games of the season – Saliba made the trip to England to visit Arsenal’s London Colney training base.AdvertisementAdvertisementADVERTISEMENTAccording to The Athletic’s David Ornstein, the Gunners are already working closely with their summer signing and have been impressed with his ‘physical prowess’.However, they have noted a few areas of concern where he needs to improve, particularly his groin strength.More: FootballRio Ferdinand urges Ole Gunnar Solskjaer to drop Manchester United starChelsea defender Fikayo Tomori reveals why he made U-turn over transfer deadline day moveMikel Arteta rates Thomas Partey’s chances of making his Arsenal debut vs Man CityThere is no great drama surrounding those little issues though, and Arsenal know he’s still young and can improve, while their facilities and staff are far superior to those at Saint-Etienne.The club are confident Saliba will be able to come in and compete for a first-team role next season and are continuing to remain in regular contact with him. Arsenal impressed with William Saliba but have a few concerns after visits to London Colney Advertisementlast_img read more

Brisbane home sold for $270,000 less than it fetched last year

first_img85 Menser St, Calamvale, was last auctioned in September and again last weekend.A PAIR of young Brisbane buyers has lost $270,000 off the price of a multi-million-dollar property they bought just five months ago.Agent Eric Li of Ray White Sunnybank confirmed it was the second sale in months for the massive 1.01ha property.“They sold it cheaper than they paid because they needed a quick settlement,” he said of the weekend’s $3.03m auction of 85 Menser St, Calamvale.More from newsParks and wildlife the new lust-haves post coronavirus21 hours agoNoosa’s best beachfront penthouse is about to hit the market21 hours agoLast year’s buyers were driving past the auction when they decided to bid. The 1.01ha site has development approval for 38 townhouses.In September last year it had sold at auction for $3.3m in what Mr Li described at the time as an “unusual” circumstance where the buyers had not inspected the property until after the auction. The buyers had been driving past the auction when they stopped to ask if they could bid, he told The Courier-Mail after last year’s sale.The property has a five bedroom, three bathroom, four car space home that the owners had tried living in for a stint, but its main attraction was development approval for 38 townhouses on the site. “Hopefully, the new owner will develop it,” Mr Li said. FOLLOW SOPHIE FOSTER ON TWITTERlast_img read more

NTTF National Junior League Serves off in Lagos

first_imgAccording to the referee of the tournament, John Peters, the enthusiasm showed by the players would make the tournament competitive as some of the players are eager to displace the already established stars in their bid to represent Nigeria in major international tournaments.“We are so excited that we are now having quite a number of junior players coming up and this is a sign that we will have quality replacement for some of our ageing players. I am so happy that this year’s tournament will be more competitive because looking at what Taiwo Mati, who is a junior player that won the national trial for the All Africa Games, there will be chance for more players to come through,” Peters said.Peters, who is Nigeria’s longest serving umpire having officiated at the Olympic Games, Commonwealth Games and All Africa Games charged the players to be of good conduct during the tournament, while there are plans to reward good conduct.Aside the total prize money of N1m, outstanding players will also be compensated by the organizers.Already, most of the registered participants have arrived Lagos on Thursday July 11 in readiness for the kick off with all eyes on the gong.Among the top junior players expected to be the cynosure of all eyes are Oyo State-born duo of Usman Okanlawon and Sadiat Akeem, who are the current West African cadet champions.To ensure that some of the players that featured at the last African Junior Championship in Ghana give room for upcoming players, the organizers have decided to include the Youth tournament (U-21) in the grand finale with the likes of Taiwo Mati, Azeez Solanke, Jamiu Ayanwale, Abayomi Animashaun, Augustine Emmanuel as well as Tosin Oribamise competing in the one-day finale on July 21.Share this:FacebookRedditTwitterPrintPinterestEmailWhatsAppSkypeLinkedInTumblrPocketTelegram The 2019 Nigeria Table Tennis Federation (NTTF) national junior league serves off on Friday July 12 at the National Stadium in Lagos.Already, 63 boys and 32 girls drawn across the country have registered for the nine-day tournament which serves a ranking event for U-18 players in the country.The tournament is being bankrolled by WEO AllSports with technical support from NTTF and the players are expected to compete for points from the preliminaries, which will end on July 19 where the finalists will battle for cash prize and honours in the grand finale scheduled for July 21 at the Molade Okoya-Thomas Hall of Teslim Balogun Stadium.last_img read more