You know what term you don't hear anymore? Arbitrage. The markets have gotten too efficient.
Sentiment: NEGATIVE
I don't entirely reject the idea of efficient markets. It needs updating.
The markets are efficient over time.
Markets that don't work we're going to step away from.
Financial institutions like to call what they do trading. Let's be honest. It's not trading; it's betting.
Arbitrage proof has since been widely used throughout finance and economics.
It's so funny to think that I used to be a model and here I am doing arbitrage, shipping and negotiating margins, the list is endless.
More and more investors may be coming into markets everywhere but that doesn't mean that the markets are really getting more and more efficient, even in the United States. It does mean that there is more access for savvy investors who watch the money flows.
Proprietary stock-index arbitrage is but one aspect of program trading. Arbitrage will take place whenever there is an imbalance created in one or more markets that are similar.
Right now the long-term investors are telling us that they're not as concerned about inflation and so we're seeing these rates now move into the marketplace and out to the street - rates that individuals can get.
The market is incredibly inefficient and capable on rare occasions of being utterly dysfunctional. And people have a really hard time getting their brain around that fact. They want to believe that it's approximately efficient almost all the time, and it simply isn't true.