October 26, 200817 yr From what I've seen so far ETF's (Exchange Traded Fund's) seem to work well in normal markets. These are not normal times however. Anyone care to speculate on what may happen to these ETF's with their exposure to derivatives, if things get a lot worse in the world markets than they already are?
October 26, 200817 yr Most ETF's ARE derivatives and they way they've worked in the past few years is, they've been the tail wagging the dog of global markets. Imagine you're trading for a hedgefund or trading desk of a major bank. With, sat 10 million dollars you can move the ETF of an index average up .5% in 10 minutes. How many billions of dollars might that have cost to buy the underlying? If you can get traders to follow through, you've moved the market for pennies on the dollar. They really have to go if any real market reform is coming. Also. I've read anecdotal accounts that there are far more ETF's currently than delivery of the underlying can support. If that's true, it's a big problem. Edited October 26, 200817 yr by lannarebirth
October 26, 200817 yr Author Most ETF's ARE derivatives and they way they've worked in the past few years is, they've been the tail wagging the dog of global markets. Imagine you're trading for a hedgefund or trading desk of a major bank. With, sat 10 million dollars you can move the ETF of an index average up .5% in 10 minutes. How many billions of dollars might that have cost to buy the underlying? If you can get traders to follow through, you've moved the market for pennies on the dollar. They really have to go if any real market reform is coming.Also. I've read anecdotal accounts that there are far more ETF's currently than delivery of the underlying can support. If that's true, it's a big problem. Thanks. I've been doing a bit of searching and found this article in the UK Financial Times. It explains these ETF's in fairly good detail, but I get the feeling the author is pulling his punches about the potential dangers.
October 26, 200817 yr Most ETF's ARE derivatives and they way they've worked in the past few years is, they've been the tail wagging the dog of global markets. Imagine you're trading for a hedgefund or trading desk of a major bank. With, sat 10 million dollars you can move the ETF of an index average up .5% in 10 minutes. How many billions of dollars might that have cost to buy the underlying? If you can get traders to follow through, you've moved the market for pennies on the dollar. They really have to go if any real market reform is coming.Also. I've read anecdotal accounts that there are far more ETF's currently than delivery of the underlying can support. If that's true, it's a big problem. Thanks. I've been doing a bit of searching and found this article in the UK Financial Times. It explains these ETF's in fairly good detail, but I get the feeling the author is pulling his punches about the potential dangers. Worth a read IMO: http://www.cross-currents.net/x060208t.pdf
October 27, 200817 yr Thanks for the link LANNEREbirth This one I thought was worth a read also http://www.24hgold.com/news-gold-silver-Th...0_Jim_Willie_CB
February 28, 200917 yr Most ETF's ARE derivatives and they way they've worked in the past few years is, they've been the tail wagging the dog of global markets. Imagine you're trading for a hedgefund or trading desk of a major bank. With, sat 10 million dollars you can move the ETF of an index average up .5% in 10 minutes. How many billions of dollars might that have cost to buy the underlying? If you can get traders to follow through, you've moved the market for pennies on the dollar. They really have to go if any real market reform is coming.Also. I've read anecdotal accounts that there are far more ETF's currently than delivery of the underlying can support. If that's true, it's a big problem. Heres the first domino to fall. CFTC probes big oil ETF on February rollBy Moming Zhou & John Spence, MarketWatch Last update: 5:27 p.m. EST Feb. 27, 2009 The U.S. futures trading regulator said Friday it is looking into the trading activities of the biggest oil exchange-traded fund when it earlier this month moved its positions to the next-month oil futures contract. The Commodity Futures Trading Commission said its enforcement staff is investigating the United States Oil Fund LP (USO:united states oil fund lp units and other market participants regarding the Feb. 6 "roll", or sale of the expiring front-month oil contract and purchase of the successive month's contract. "I want to reassure the public that the CFTC takes seriously issues surrounding price movements in our nation's vital energy markets," said Stephen Obie, acting director of the CFTC's Division of Enforcement, in a statement. The CFTC's probe into the fund illuminates the growing clout of commodities ETFs. Their size means they are no longer just a passive investment reflecting prices but sometimes can move markets. http://www.marketwatch.com/news/story/CFTC...28416F88A9E7%7D I imagine similar stories relating to other commodity etf's, Gold etf's and equity index etf's will be emerging eventually. They've basically ruined the market with these etf's. They gotta go.
February 28, 200917 yr Most ETF's ARE derivatives and they way they've worked in the past few years is, they've been the tail wagging the dog of global markets. Imagine you're trading for a hedgefund or trading desk of a major bank. With, sat 10 million dollars you can move the ETF of an index average up .5% in 10 minutes. How many billions of dollars might that have cost to buy the underlying? If you can get traders to follow through, you've moved the market for pennies on the dollar. They really have to go if any real market reform is coming.Also. I've read anecdotal accounts that there are far more ETF's currently than delivery of the underlying can support. If that's true, it's a big problem. no anecdotes LRB but a well known fact! by pointing to "underlying" you submitted the evidence.
February 28, 200917 yr Most ETF's ARE derivatives and they way they've worked in the past few years is, they've been the tail wagging the dog of global markets. Imagine you're trading for a hedgefund or trading desk of a major bank. With, sat 10 million dollars you can move the ETF of an index average up .5% in 10 minutes. How many billions of dollars might that have cost to buy the underlying? If you can get traders to follow through, you've moved the market for pennies on the dollar. They really have to go if any real market reform is coming.Also. I've read anecdotal accounts that there are far more ETF's currently than delivery of the underlying can support. If that's true, it's a big problem. no anecdotes LRB but a well known fact! by pointing to "underlying" you submitted the evidence. Yes, but it doesn't apply in all cases. Many etf's are derivatives that seek to mirror a given financial instrument, with mixed success. These are the problen ones. Others are "trust" types that actually buy the underlying. This type is unlikely to implode, but they're still bad for markets, in that they create the illusion that a lot more money is entering the market than is in fact.
March 1, 200917 yr I can tell you about three ETF's. My broker recommended them as being quite safe and paying good dividends. PTY - Paid $17.24 now worth $7.49 PFN - Paid $18.75 now worth $4.89 CWF - Paid $10.02 now worth $2.61
March 1, 200917 yr Yes, but it doesn't apply in all cases. Many etf's are derivatives that seek to mirror a given financial instrument, with mixed success. These are the problen ones. Others are "trust" types that actually buy the underlying. This type is unlikely to implode, but they're still bad for markets, in that they create the illusion that a lot more money is entering the market than is in fact. Lanna so are these included in the figure of $586 trillion which was mentioned in the article you also posted a couple of weeks ago?
March 1, 200917 yr I can tell you about three ETF's. My broker recommended them as being quite safe and paying good dividends.PTY - Paid $17.24 now worth $7.49 PFN - Paid $18.75 now worth $4.89 CWF - Paid $10.02 now worth $2.61 does that mean you have to postpone the purchase of that aircraft carrier you had in mind?
March 1, 200917 yr Yes, but it doesn't apply in all cases. Many etf's are derivatives that seek to mirror a given financial instrument, with mixed success. These are the problen ones. Others are "trust" types that actually buy the underlying. This type is unlikely to implode, but they're still bad for markets, in that they create the illusion that a lot more money is entering the market than is in fact. Lanna so are these included in the figure of $586 trillion which was mentioned in the article you also posted a couple of weeks ago? yes.
March 1, 200917 yr I can tell you about three ETF's. My broker recommended them as being quite safe and paying good dividends.PTY - Paid $17.24 now worth $7.49 PFN - Paid $18.75 now worth $4.89 CWF - Paid $10.02 now worth $2.61 does that mean you have to postpone the purchase of that aircraft carrier you had in mind? I lost interest in the aircraft carrier when I moved upcountry. I decided on a new Ferrari instead but now I'm going to wait for the ETF's to come back before I order it. How long do you think I'll have to wait?
March 3, 200917 yr I can tell you about three ETF's. My broker recommended them as being quite safe and paying good dividends.PTY - Paid $17.24 now worth $7.49 PFN - Paid $18.75 now worth $4.89 CWF - Paid $10.02 now worth $2.61 does that mean you have to postpone the purchase of that aircraft carrier you had in mind? I lost interest in the aircraft carrier when I moved upcountry. I decided on a new Ferrari instead but now I'm going to wait for the ETF's to come back before I order it. How long do you think I'll have to wait? you can order it right now........you will have to wait a really long time to pay for it though
March 3, 200917 yr I can tell you about three ETF's. My broker recommended them as being quite safe and paying good dividends.PTY - Paid $17.24 now worth $7.49 PFN - Paid $18.75 now worth $4.89 CWF - Paid $10.02 now worth $2.61 does that mean you have to postpone the purchase of that aircraft carrier you had in mind? I lost interest in the aircraft carrier when I moved upcountry. I decided on a new Ferrari instead but now I'm going to wait for the ETF's to come back before I order it. How long do you think I'll have to wait? you can order it right now........you will have to wait a really long time to pay for it though Make sure you get 4 wheel drive. Otherwise it'd be a frivolous extravagence.
March 3, 200917 yr I can tell you about three ETF's. My broker recommended them as being quite safe and paying good dividends.PTY - Paid $17.24 now worth $7.49 PFN - Paid $18.75 now worth $4.89 CWF - Paid $10.02 now worth $2.61 does that mean you have to postpone the purchase of that aircraft carrier you had in mind? I lost interest in the aircraft carrier when I moved upcountry. I decided on a new Ferrari instead but now I'm going to wait for the ETF's to come back before I order it. How long do you think I'll have to wait? my fair estimate is that you still have to plough your rice paddies twice this year with your tractor or a buffalo on loan from a kind neighbour.
March 3, 200917 yr I intend to keep my little four wheel drive Yanmar tractor out of the flooded rice paddies this year. Just today my wife bought an iron buffalo to do the mud work. That cost 68,000 baht. I figure the payback for all the machinery will be about ten years provided the crops are good.
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