read more: http://www.yourdemocracy.net.au/drupal/node/26357

We must desensitise the markets against tragedy and terror so that the next time we hear that the White House is exploding, they don't freak out, writes Ben Pobjie.

We live in dangerous times. Peril stalks us at every turn. Our way of life, indeed our lives themselves, are constantly threatened, by war, by terrorism, by climate change, by disease-carrying bats and rogue crocodiles. And now there is a new enemy we must face with all the bravery we can muster: Twitter hackers.

Like all of you I was incredibly distressed when I found out that hackers had seized control of the AP Twitter account and tweeted about a fictional attack on the White House, but I was even more distressed when I found out that it had thrown financial markets into turmoil. That's going beyond a joke. That is striking at the very heart of what makes us human: stocks.

...

The markets are the foundation of all we hold dear. Without markets we won't have capitalism or Boxing Day sales or sunshine or morality. Without markets everyone would starve and Christine Milne would be smug. Without markets iPads wouldn't even turn on.

That's why we must safeguard them, inure them, vaccinate them against wussiness, so that next time we hear that the White House is exploding, we can relax in the knowledge that nothing really important is at stake.

Ben Pobjie is a writer, comedian and poet with no journalistic qualifications whatsoever. View his full profile...

http://www.abc.net.au/unleashed/4653098.html

It's been another familiarly strange week on the markets.

The big "news" this week was either that Reserve Bank governor Glenn Stevens was joking or that he has a sense of humour. In any case, the now infamous six words that moved the currency markets – “deliberated for a very long time” – caused the Australian dollar to fall and ANZ to change its rates forecast (before changing it back), while other commentators waxed lyrical on exactly what Glenn Stevens meant.
Reading the tea leaves
In the wash-up, the verbal sextet in question was nothing more than a quip, and all was put right with the world.

While I'm sure many economists then indulged in behind-the-scenes hand wringing and one or two may have resorted to calling governor Stevens names behind his back, the episode really does expose the "tea leaf reading" for what it is.

Countless hours (and column inches) are devoted to trying to guess what each RBA statement might mean – how long or short the statement is and what words are added or removed when compared to previous statements.
To be fair, the RBA (and its international counterparts) do use such "jawboning" to guide the markets in one direction or another, so the tea leaf reading does have some relevance, but the process is far from perfect, and those trading on such assumptions really are gambling on what might (or might not) happen, as this week's kerfuffle showed.

Full of sound and fury
Meanwhile, equities markets as measured by the S&P/ASX200 have had another week of highs and lows thus far.
Monday's loss of 1.9 per cent was put into the shade by a 2.6 per cent gain on Tuesday. Not to be overshadowed, Wednesday brought us a second 1.9 per cent loss, before a 1.1 per cent gain on Thursday and another 0.9 per cent gain by this afternoon.

Read more: http://www.smh.com.au/business/motley-fool/all-jokes-aside-markets-make-for-strange-brew-20130705-2pgi5.html#ixzz2Y9VZP100

The University of Michigan Consumer Confidence Index is one of the most trusted gauges of consumer sentiment, and its monthly release is followed closely by investors all over the globe.

Any single piece of information that can move markets on its own is going to be extremely valuable to Wall Street traders, especially if they can get their hands on that information before everyone else. That’s why some firms were reportedly willing to pay Thomson Reuters — the exclusive distributor of the University of Michigan survey — $6,000 per month in order to get their hands on the information a mere two seconds before other Thomson Reuters subscribers.

This two-minute advantage is of particular use to high-frequency trading firms, who use high-powered computers to make thousands of trades per minute, based on data piped in from various sources like Thomson Reuters. By the time these computerized traders have processed the data, much of the advantage the average investor could reap from the information has already been rung out of the market.