August 20, 2022
NewsTreason.com Commentary - Video Follows Below
Most financially savvy Americans are aware that the use of computer model driven “Program Trading” by Wall Street’s major players has exploded over the past 20 years. It’s no secret that the days when stock and bond trades were decided by human analysis of company and sector financials are long gone. The use of predictive financial modeling has advanced from basic Excel-built scenario models to fully-automated Quantitative trading systems that can execute thousands of transactions in the amount of time it takes for an Analyst to login to a Bloomberg terminal.
What most people don’t know is just how prevalent these systems are and how significant of an impact they’ve had on the world's financial markets. The power of this technology has fundamentally altered the concept of market parity. The mainstream financial media still pretends that the individual "retail" investor can select investments based on earnings, profitability and future company growth predictions. Networks like Bloomberg & CNBC broadcast 24 hours a day, "educating" the American populace about stock and bond "fundamentals," sector trends, interest rates and other traditional selection metrics that have been used for decades. While this information is all correct from the standpoint of modern academic financial theory, it does not at all accurately reflect , in practice, how the markets truly function in the age of Artificial Intelligence. The truth, which is well-known by the financial media is that nearly all of the changes in the prices of stocks and bonds are determined by the asset allocations of just a handful of financial behemoths.
On a typical trading day, computers account for 65% to 75% of market trades, according to Art Hogan, chief market strategist for B. Riley FBR. When the markets are extremely volatile, they can make up 90% of all market trades. Why is this significant? Because the variables analyzed by artificial intelligence software at any given moment number into the trillions. These systems have the ability to analyze and cross-reference an infinite combination of inputs and use predictive algorithms to execute millions of trades and shift trillions of dollars around the markets all before the retail investor wakes up in the morning. The complexity of these algorithms trigger massive movements in single stocks, industry sectors or an entire index based on combinations of factors that simply wasn't possible in the past.
An overnight change in the the price of commodities in China, changing patterns in retail sales in Europe, delays at a major shipping port, labor costs in Sri Lanka, even a slight change in individual purchasing habits (thanks Apple & Google) - these and millions of other factors can trigger the algorithms to execute trades that have nothing to do with the "traditional" analytics shown on the retail trader's radar. This is why the Betas (volatility correlation) in securities have changed so greatly over the last decade. It's also the reason behind the increase in overall volatility of the major indices and a key factor that causes so many "wild" swings in the markets that don't always "make sense" to most of us.
Compared to just a decade ago, there are many more days where the markets "should" drop significantly, only to see the Dow jump 500 points. And vice versa. On the surface, it often doesn't make sense. But that is because most investors expectations are based on logic that doesn't apply to the modern way that the markets are traded.
The bottom line is that the markets are now HEAVILY manipulated - far more than you've been led to believe. What's worse is that the majority of the market manipulation can be traced back to one place - BLACKROCK and "Aladdin", the most advanced Artificial Intelligence Trading system ever created. The video below, does an excellent job of explaining the power that Blackrock and Aladdin have to influence far more than just the world's financial markets.
Don't expect to see this in the mainstream media - its another in the long list of dots that they don't want the average American to connect. But all of the information in this video is readily and easily verifiable for anyone that wishes to do so. (Note: If you are not familiar with BlackRock, I recommend this video for background - LINK)
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