Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: Lazarus who wrote (52129)	6/21/2013 10:09:09 AM
From: D.Austin	Respond to of 220483

Step right up, step right up, step right up, Everyone's a winner, bargains galore "The losses for ETFs today were far beyond what the most sophisticated financial risk models could have predicated for worst-case scenarios," said Bryce James, president of Smart Portfolio, which provides ETF asset allocation models. Turns out yet another cost-cutting, computerized contraption was only as strong as its weakest link: which in this case turned out to be a completely unexpected, Bernanke-driven bond market sell off, which led to unprecedented stress in the $2 trillion ETF industry. ******************************************* The selling also caused disruptions in the plumbing behind several ETFs. Citigroup stopped accepting orders to redeem underlying assets from ETF issuers, after one trading desk reached its allocated risk limits. One Citi trader emailed other market participants to say: “We are unable to take any more redemptions today?.?.?.?a very rare occurrence due to capital requirements we are maxed out on the amount of collateral we have out.” ******************************************* skip the middle man . .

To: Lazarus who wrote (52129)	6/21/2013 10:11:56 AM
From: ggersh	1 Recommendation Recommended By D.Austin Read Replies (1) \| Respond to of 220483

"ETF Losses Today Were Far Beyond What The Most Sophisticated Risk Models Could Have Predicted"Submitted by Tyler Durden on 06/21/2013 - 08:01 There was a time when portfolio insurance guaranteed that events like Black Monday would never happen. Then Black Monday happened precisely due to portfolio insurance. Some years later, the credit-driven housing boom made modeling of declining home prices at rating agencies (and everywhere else) redundant. Then the (first) housing and credit bubble popped leading to the biggest housing market crash in US history. Fast forward to today, when ETFs were supposed to be the "greatest thing since sliced bread" and providing an ultra-low cost alternative to mutual fund and other market exposure "for the people", were supposed to revolutionize investing. Until days like yesterday. To wit from the FT: "The losses for ETFs today were far beyond what the most sophisticated financial risk models could have predicated for worst-case scenarios," said Bryce James, president of Smart Portfolio, which provides ETF asset allocation models.