Too emotional, too many stars and far too many jams

by Manshu on August 6, 2011

in Links

Since the crash is on everyone’s mind, let’s start with two posts with one of the most sensible commentator on the stock markets around.

I’ve linked to Roger Nusbaum several times earlier, and I was looking forward to his thoughts on yesterday’s crash as soon as the market closed.

In his typical calm and no – nonsense manner he laid out what I think is one of the sanest posts I’ve read since yesterday.

I think the single most important takeaway from that post is avoiding an emotional reaction to these events, but there are other pretty good points too.

As a follow – up to his post yesterday – he wrote one today about people’s reactions to his post yesterday. My first and only reaction to that was some people just don’t get it. They will blame the government, blame their boss, their adviser, anyone and everyone but themselves. That’s just how the world is, and the only thing you can do is to avoid being that someone.

I can’t find a link to this but there is a new thing I learned from Thursday’s crash. As the market fell, I was amazed to see how even Silver crashed 7.5% and gold was marginally lower.

I was a bit surprised to see silver fall so much, and then I read a WSJ piece that said that hedge funds and other investors who got margin calls had to sell off some part of their silver and gold to come up with cash, and that’s at least partly the cause behind the silver fall.  I have never thought or heard anyone talk about this relation before so that was interesting to hear.

Enough about the crash, now let’s get to some other links.

A brilliant star studded night in the Himalayas. Easily, the most beautiful thing I’ve seen all week. I hope I get to see such a sky for real some day.

Another insightful post from the Psy – Fi blog about how people are affected when they have too many choices, and how having too many options may not be the best idea.

Reuters on a new breed of short sellers who are essentially one person shops researching Chinese stocks, and then selling them short based on their research. It’s a fascinating read.

Ranjan Varma on a MLM scheme that he was offered during a train ride.

Finally, while people in India are wondering when they will start getting 12.00% interest rate on  their fixed deposits – negative interest rates have already become a reality for at least some customers in one US bank. FT Alphaville reports that BNY Mellon has told customers who have more than $50 million lying in their account that they will be charged a fee for that.

That’s right – forget interest, they will have to pay money to the bank!

That’s it for this week – enjoy your weekend!

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{ 7 comments… read them below or add one }

Swaroop Rao August 6, 2011 at 6:58 am

Beautiful! But, being a long-exposure shot, one will never see anything like this in real life. It’s like a time-lapse video compressed into a single photograph.

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Manshu August 6, 2011 at 7:25 am

Oh, what does that mean Swaroop, how did they take it?

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Madhab August 6, 2011 at 11:31 am

Thanks Mansu for this nice weekend read…

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Manshu August 6, 2011 at 9:49 pm

You are welcome Madhab.

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Raja August 6, 2011 at 12:22 pm

Loved the Reuter’s link on short sellers. Wish they focus on India too!

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Manshu August 6, 2011 at 9:49 pm

You mean Indian ADRs in the US or Indian stocks?

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piyush modi August 6, 2011 at 1:16 pm

yes.. this happens often.. people sell in other markets when they have to raise cash to pay margin calls. but that’s not the entire story..

there is also the fact that silver behaves both as a precious metal as well as an industrial metal.. so while in times of crisis it goes up.. with growth slowing the demand side also gets hit..

Also, 42.20 was a very significant level in Silver and market respected that. Plus gold and silver had been rallying strongly for 2-3 days.. while S&P was falling they were trying to push even higher, but couldn’t.. finally gold gave up and started coming under pressure.. silver buyers just puked out their positions.. but its an ongoing strong uptrend.. thats how the corrections to the trend play out.. at times so strong, one is totally not sure whether to buy the dip or not..

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