11 ms·

Trader: I dream of another recession (and Goldman Sachs rules the world)

217 points by jacobr 15y ago

lrm242 15y ago
This is a hoax. Put down your pitchforks. http://www.dailymail.co.uk/news/article-2042717/Alessio-Rastani-How-did-BBC-mistake-day-trader-Master-Universe.html http://www.dailymail.co.uk/news/article-2042717/Alessio-Rast...
casca 15y ago
This was cleverly done by the The Yes Men: http://theyesmen.org/ http://theyesmen.org/. For proof, look at http://en.wikipedia.org/wiki/File:Dow_apologizes.jpg http://en.wikipedia.org/wiki/File:Dow_apologizes.jpg from http://en.wikipedia.org/wiki/The_Yes_Men http://en.wikipedia.org/wiki/The_Yes_Men
- mcantelon 15y ago
  Not a Yes Man. Twitter feed has 1772 Tweets and contains technical-analysis-based-predictions (like Sept 16 prediction of gold crashing: http://www.facebook.com/video/video.php?v=284602891566784 http://www.facebook.com/video/video.php?v=284602891566784).
- msutherl 15y ago
  um, no, that's not proof
- gkanai 15y ago
  Rastani is not among The Yes Men. http://www.yeslab.org/rastani http://www.yeslab.org/rastani
gaius 15y ago
This Goldman Sachs? http://dealbook.nytimes.com/2011/09/26/goldman-sachs-draws-up-deeper-cuts/ http://dealbook.nytimes.com/2011/09/26/goldman-sachs-draws-u... They're cutting the size of their coffee cups to save money, hardly secret rulers of the world stuff, is it? This guy was just saying exactly what BBC viewers wanted to hear... That it was the evil bankers fault, not people taking out more mortgage than they could afford.
- mootothemax 15y ago
  This Goldman Sachs? [link] They're cutting the size of their coffee cups to save money, hardly secret rulers of the world stuff, is it? That's the same Goldman Sachs that made a profit of $2.7 billion in the first quarter of this year alone: http://www.guardian.co.uk/business/2011/apr/19/goldman-sachs-smashes-forecasts-first-quarter-profit http://www.guardian.co.uk/business/2011/apr/19/goldman-sachs...
  - gaius 15y ago
    That's one number taken out of context. With a market cap of $50Bn, there are plenty of companies with comparable numbers. Not sure why my comment was downvoted, if the secret of ruling the world is using smaller coffee cups, anyone can do it...
  - cellis 15y ago
    Yeah, and that $2.7 billion in profit is after paying ridiculous compensation to most of the firm. Chew on that.
    - gaius 15y ago
      Oh please. The HN dream is riches beyond imagination just for making a website. Pot meet kettle.
      - dasil003 15y ago
        Some of us actually want to make something useful.
      - BadCookie 15y ago
        The difference is that we generally only get rich if we help people. Financial types often get rich (much more reliably than us) by screwing over people, luring them into indebtedness, and profiting from (and, I would argue, causing) the losses of others.
        15y ago
mootothemax 15y ago
I'm still wondering how much of what the trader said was motivated by a desire to raise his profile for his after-dinner speaking engagements. His name's Alessio Rastani, and he's got the basics already set up for some social media fun: https://www.facebook.com/alessiorastani https://www.facebook.com/alessiorastani http://twitter.com/#!/alessiorastani http://twitter.com/#!/alessiorastani
fserb 15y ago
This guy sounds a lot like a Yes Men intervention.
- brown9-2 15y ago
  A few people are reporting that it is in fact a hoax: http://nymag.com/daily/intel/2011/09/bbcs_goldman_sachs_rules_the_w.html http://nymag.com/daily/intel/2011/09/bbcs_goldman_sachs_rule...
- motters 15y ago
  At first I also assumed the same. However, if it's a hoax it's a pretty elaborate one. He appears to have an online presence as a trader going back at least to 2009. My guess is that he's just making outrageous statements so that he can get on other news and chat shows.
  - dbfclark 15y ago
    http://www.forbes.com/sites/emilylambert/2011/09/27/trader-or-prankster-we-called-alessio-rastani-and-asked/ http://www.forbes.com/sites/emilylambert/2011/09/27/trader-o... Is some actual reporting. He's an individual day trader, not an institutional trader of any kind. So I'd say you're pretty right.
- jfruh 15y ago
  Felix Salmon makes the interesting point that he could be a trader and a Yes Man: http://blogs.reuters.com/felix-salmon/2011/09/27/is-alessio-rastani-a-yes-man/ http://blogs.reuters.com/felix-salmon/2011/09/27/is-alessio-... "You don’t need to spend very much time hanging around the comments section (or even many of the posts) at Zero Hedge to discern a strong nihilistic and even anti-capitalist strain to much of the thinking in that community. Independent traders are often men in their 20s and 30s who inherited a substantial sum of money and who for whatever reason don’t have a more attractive opportunity in the regular workforce. They work from home, they tend to have a strong contrarian streak, and they have a lot of time on their hands ... It’s a common misconception that all traders are die-hard capitalists. But in fact many of them are quite the opposite. They still want to make money, of course. But that doesn’t mean they want the stock market to go up."
Construct 15y ago
This man is described as an "independent market trader" in the attached article. His twitter profile ( http://twitter.com/#!/alessiorastani http://twitter.com/#!/alessiorastani ) describes him as a "Keynote speaker" and a "Mentor and dedicated to helping others succeed". That doesn't exactly inspire much confidence. In fact, it is pretty obvious that he has set out to make a name for himself through this controversy. Furthermore, he has obviously bet heavily on a near-term market crash. He's now financially and emotionally invested in a market crash, so of course he will be confident that it's going to happen. And if his doomsday video circulates the internet and makes a dent, however tiny, in investor sentiment then he has also effectively pushed the market (in a very tiny way) toward his goal. Take a look at one of his recent tweets: "I've been waiting for this stock market crash for 3 years. #finance #economy" The world economy is in trouble, no doubt, but let's remain reasonable and rational here. Spend enough time around financial types, and you can always find a doomsayer like this man in any sort of economy.
- kayhi 15y ago
  Looks like more investigating has been done: http://goo.gl/Yp447 http://goo.gl/Yp447 with the result not looking good along the same lines that you mentioned.
- silverbax88 15y ago
  This is an extremely valid point. If you look at the stories that are posted daily on Yahoo! Finance, nearly all of them are market predictions by people with a vested interest in their predictions (beyond simply trying to be correct). I think this is still lost on most consumers; most people think stock analysts are the same as economists, and that's completely wrong. A good economist will tell you that they can't predict the stock market, but they can tell you what the economy will do. That's enough to let you know that the direction of the economy and the stock market are not directly linked.
  - dxbydt 15y ago
    >> A good economist ...can tell you what the economy will do. I was sipping a venti mocha when I read this and I laughed so hard there's mocha all over my keyboard. There are people here, actual paid economists, who are doubling up in laughter at your assertion.
sixtofour 15y ago
"Learn how to make money in a downward market." OK. As an individual who is not rich, where to start that learning?
- fastchicken 15y ago
  Look up Put options and shorting stock. Thats a good start. BTW, not exactly something you'd expect to do without some training. Like an average person setting up and running an EC2 cluster.
- DanI-S 15y ago
  Congratulations; you've just hit upon the problem.
- philbarr 15y ago
  I'm not rich either and had absolutely no idea about shares, so figured I should learn and am now reading "Investing In Shares For Dummies" - UK Edition. I know it's a For Dummies book but as I really knew nothing I had to start somewhere. It's been pretty good so far - particularly highlighting the difference between speculating (trying to get rich quick / gambling) and aggressive and cautious investing (where you expect returns in 2 - 5 years). In the chapter on bear markets (downward markets) the advice is: - Keep your money safe - use interest bearing vehicles such as bank and building society accounts (hmm, really, didn't people lose money in those?), National Savings certificates, or guaranteed income bonds. - Stick to necessities - get shares in stuff people always need, like food. - Use trailing stops. I guess once the market HAS crashed if you're sure which shares are way below value simply because of the crash you could buy those and wait until the market returns to normal?
  - dotBen 15y ago
    "Investing In Shares For Dummies" Just make sure your reading material matches your expectations. They're going to ultimately teach you the "buy low, sell high" basics. And that's fine if you are just hobbying. What other folks in this sub-thread are talking about - shorting, puts, calls, futures, speculating against commodities and treasuries (not just buying them)... these are what the pros are doing and probably not going to be covered in 'for Dummies'. Whether or not you'll make/lose more money with one or the other is beyond scope here...
dasil003 15y ago
Those who talk don't know, and those who know don't talk.
- dualogy 15y ago
  Nice talking, dasil!
Vivtek 15y ago
Well, given that the Euro is not falling against the dollar, the one thing he says that I can easily check (that everybody's scared about the Euro and is moving their money into dollars) is plain false. My assumption is everything else is, too. As Construct says (and as I commented on elsewhere) he's emotionally invested in seeing doom on all sides.
- marcamillion 15y ago
  I would have to disagree with this: http://finance.yahoo.com/echarts?s=EURUSD=X+Interactive#chart6:symbol=eurusd=x;range=6m;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined http://finance.yahoo.com/echarts?s=EURUSD=X+Interactive#char... That's a 6 months chart. From May 2011(1.48 Eur to 1 USD) to today(1.35 Eur to 1 USD), it has been very volatile but generally trending down. So I would say he is right.
  - Vivtek 15y ago
    Now look at the year's chart. That $1.48 was great, but it was probably due to the scare over the creditworthiness of the US - and now that that crisis is past, we're heading back to roughly where the Euro/dollar ratio has been for a couple of years now. I get paid mostly in Euros, and my debts are all in dollars. That makes me emotionally invested, too, but it also means I know what the Euro/dollar ratio is doing all too well.
amitparikh 15y ago
Bulls make money, Bears make money. It's the pigs that get slaughtered.
Francon 15y ago
Historically speaking, we've never seen an economy succeed long term when the monetary system is based on a fiat (fake) currency. Sadly, this trader is telling the truth: "We bought the ticket so take the ride and profit" is the message to people. This is a manufactured crisis but it matters not weather it is intentional or unintended. It is happening. Historic precedent exists for this. The Collapse of: Egyptian Empire, Roman Empire, U.S.S.R. and Zimbabwe. All from fiat overexertion of an unsustainable empire or economies. The history of fiat money, to put it kindly, has been one of failure. Seems this trader is going to profit from the shift rather than sit idly by waiting for some magical intervention.
- JimmyMiller 15y ago
  Don't forget about Yugoslavia and Argentina!
- eftpotrm 15y ago
  While the history of commodity-backed money was one of major problems with restricted money supply, of industrial use of said commodities becoming prohibitive and itself becoming an economic limit, of significant periodic deflation and currency fluctuation based on mining returns. Fiat money isn't ideal, but neither was the gold standard.
- nhaehnle 15y ago
  Egyptian and Roman Empires? Where is your data suggesting that their collapses had anything to do with fiat money? USSR? It's pretty clear that they suffered a lot due to economic mismanagement (i.e. inefficiencies due to how their economy was run), but that had nothing to do with whether fiat money was involved or not. Zimbabwe? The causes of hyperinflation was a combination of a collapse of (especially) the agricultural sector and foreign-currency denominated debts. Both events were caused by political decisions, not by fiat money. It is likely that all the collapses you mentioned (including the ancient ones) involve some level of economic mismanagement, where the productive capacity of a society was destroyed, misallocated, or left idle. Fiat money was never the problem. If you disagree, please point out how fiat money was the problem, instead of only asserting it.
smogzer 15y ago
If everybody goes shorting the market like the meta-morph in there advises; skeletor, the guy controlling the markets from it's castle will make a short squeeze by buying those shorts and pretend to be he-man. Saving Europe and the likes and postponing the apocalipto, at least in the stock markets.
alins 15y ago
When an "analyst" comes to you and starts saying things like "if you know what to do ..." - this is the mark of a snake oil salesman. Next thing he will do is to ask you for money to learn about his "strategy". This guy is an idiot who wants to make a name for himself so he makes these kinds of statements to get attention. At this point the last thing Goldman Sachs wants is a total collapse of markets and economy.
npollock 15y ago
You've got to imagine the BBC does some kind of background check on the people it puts on air. Typically speakers hail from the big banks and funds, it's unusual to give a virtual unknown the pulpit. I wonder what kind of guidelines they establish before they allow you on air. Did they know he was that biased?
grandalf 15y ago
This is an extremely obvious point masquerading as something controversial. In a market with 10 large financial firms, all of varying strength, a capital crisis may put a few of the weaker ones out of business, since a capital shortage means that a firm doesn't have enough liquid capital to cover its underwriting obligations and its cash flow needs. When this happens, weaker firms are hamstrung if they can't raise additional capital. Typically the government provides free capital in the form of below market loans which can be turned into profitable short term loans at zero risk. This means that the valuable assets will be gobbled up by the stronger firms and there will be less competition across the board. Thus Goldman, as the strongest global financial firm, stands to gain the most from any crisis. Regulators required all US financial firms to accept bailout assistance precisely to avoid what would have likely been the outcome of the crisis -- one or two super firms. Even if all surviving firms shrunk by 80% post crisis, the resulting diminished competition would be a win for the surviving firms' investors. It's debatable in the scenario of the 2008 crisis whether Goldman would have survived if AIG hadn't been bailed out. I think it likely would have, but it would have had to raise additional capital from investors... As it was Buffet invested around $5B (but could have easily invested much more -- and the yield would have been way better if more competitors had been allowed to fail). As a result of this, and the various interests involved, much effort was expended to preserve the status quo. One might ask what it would take for there to be legitimate competition in the financial services market... My take is that policymakers' desire for cheap (below market price) credit can only be implemented through the sort of public/private partnership... aka socialized financial services like the ones we have in the US. To put it succinctly, cheap credit is a right. It would be interesting to run an experiment to see how much this policy has impacted American democracy (for better and worse). I don't think such an experiment would be possible though.
steve8918 15y ago
The thing is that this trader isn't saying anything that people don't already know. Milton Friedman predicted this when the Euro was first created, that it would last only until its first currency crisis. Greece is in really, really bad shape. The normal way a country gets out of this problem is by devaluing its currency, and enacting fiscal policy measures. Look at Iceland for a recent example, and the Asian currency crisis back in 97-98. However, Greece is stuck. It can't devalue its currency, because they are part of the Euro. The only way to get this to work is by getting the other European nations to pay for Greece through Eurobonds, but NO ONE WANTS TO. In fact, if a politician did so, they would get voted out. So there is no political will to pay for Greece, which means that Europe is in between a rock and a hard place. They can do handwaving, etc, but it seems really likely that this European debt crisis will bring down Spain (20% unemployment, 40% youth unemployment and a housing bubble burst), Portugal, and worst case Italy. It's confidence contagion and it will continue to spiral out of control until they eject Greece out of the EU. So now, we know that Europe is screwed. Will their plan to give 50% haircuts work? Or will everyone leave Europe entirely? This is the question, and I frankly doubt it, just like the trader said. YOU CAN'T SOLVE A DEBT CRISIS BY ISSUING MORE DEBT!!! Once Greek bond holders get 50% haircuts, what about Ireland and Portugal? Will there be mass selling of those sovereign bonds? It will be a big domino effect, and the outcome is completely unpredictable at this point, but the one predictable thing is that the politicians will likely screw it up, because they lack political courage. So the advice the trader gives is essentially right. Stay in safe havens for now, if you have money you can't afford to lose. I would stay in short-term US Treasuries so that you don't need to worry about interest rate issues. Don't try to catch bottoms unless you're playing with money you can afford to lose. Right now, the choppiness in the markets are unparalleled, so unless you really know what you're doing, safe havens are the best.
- SkyMarshal 15y ago
  "I would stay in short-term US Treasuries" For anyone not aware, you can buy these directly from the US Treasury: http://treasurydirect.gov/ http://treasurydirect.gov/ * T-Bill = shortest duration (4 weeks to 1 year) * T-Note = med duration (2 yrs to 10 yrs) * T-Bond = long duration (30yrs) T-Bills are the safest, as they are used to run the US Govt's day-to-day operations. If the US govt ever defaults, T-Bills will be the last type of bonds it defaults on, after the longer-term stuff. More here: http://treasurydirect.gov/indiv/research/indepth/indepth.htm http://treasurydirect.gov/indiv/research/indepth/indepth.htm
crag 15y ago
Ok first of all.. the markets are always driven by fear. Fear of losing and the thrill of not losing (in other words, risk) is the whole point. So lets get that out of the way. Looking at this man, he's bet heavily on a crash so what would you expect him to say? Frankly I'm a little surprised they gave him air time.
chailatte 15y ago
He is telling the truth. Startup: Record Number of Companies Pull Back on IPOs http://www.newsmax.com/InvestingAnalysis/ipo-offerings-companies-initial/2011/09/20/id/411669 http://www.newsmax.com/InvestingAnalysis/ipo-offerings-compa... Europe: EFSF - 133% Of German GDP To Cover All Of Europe's Bad Debt http://www.zerohedge.com/news/explaining-how-just-announced-ecb-market-rescue-pledged-133-german-gdp-cover-all-europes-bad-de http://www.zerohedge.com/news/explaining-how-just-announced-... Germany rejects idea of further EFSF expansion http://www.marketwatch.com/story/germany-rejects-idea-of-further-efsf-expansion-2011-09-27?link=MW_latest_news http://www.marketwatch.com/story/germany-rejects-idea-of-fur... China: Chinese growth could slow to zero in 2012 http://www.iii.co.uk/articles/18948/chinese-growth-could-slow-zero-2012 http://www.iii.co.uk/articles/18948/chinese-growth-could-slo... Cash Crunch in China Picks Up Momentum; Chinese Economy "Teetering On the Edge" http://globaleconomicanalysis.blogspot.com/2011/09/cash-crunch-in-china-picks-up-momentum.html http://globaleconomicanalysis.blogspot.com/2011/09/cash-crun... Japan: Japanese economy contracted more severely than previously reported http://online.wsj.com/article/SB10001424053111903285704576559380092114762.html http://online.wsj.com/article/SB1000142405311190328570457655... Japan auto lobby cuts 2011 sales outlook by 10 pct http://www.reuters.com/article/2011/09/27/autos-japan-idUSL3E7KR0RG20110927 http://www.reuters.com/article/2011/09/27/autos-japan-idUSL3... US: Consumer Confidence Stagnates Near Two-Year Low http://www.businessweek.com/news/2011-09-27/u-s-economy-consumer-confidence-stagnates-near-two-year-low.html http://www.businessweek.com/news/2011-09-27/u-s-economy-cons... Food stamp use rises to record 45.8 million http://money.cnn.com/2011/08/04/pf/food_stamps_record_high/index.htm http://money.cnn.com/2011/08/04/pf/food_stamps_record_high/i... Overall: Are We Headed Into A Recess/Depress-ion? The Answer In 9 Simple Charts http://www.zerohedge.com/news/are-we-headed-recessdepress-ion-answer-9-simple-charts http://www.zerohedge.com/news/are-we-headed-recessdepress-io... All signs point to the second dip in the global economic depression.
- coffeeaddicted 15y ago
  Don't know about the rest, but the german chancelor did fight all the last days _for_ the EFSF expansion and currently it looks rather like it will get through. There's been a few politicians (around 25) in the ruling coalition which were against it, but even the opposition already agreed to support it.
andrewcanis 15y ago
Whenever I hear doomsayers like this I try to remember Warren Buffett's advice, "Be fearful when others are greedy and greedy when others are fearful."
plessthenpoint5 15y ago
sorry.... but what a dick.
mcphilip 15y ago
This man's fishing for attention, IMO, but there is some degree of brutal honestly in how he describes a trader's outlook. Many traders eagerly await swings in volatility as opportunities to make a lot of money; the reason for the swing (e.g. global financial market turmoil) is irrelevant.
veyron 15y ago
Keep in mind 99% of people who go on CNBC or make stupid reports or recommendations have no vested interest in the implied outcome. None whatsoever. They are selling books or selling newsletters or selling videos or selling infrastructure or selling trade ideas, but definitely have NO skin in the game. It's also very easy to call yourself a trader: just get a zecco (or w/e the retail company of the month is), seed with 1000, and buy one share of a penny stock. Congrats: you are a trader :)
asbig 15y ago
I've just been looking at youtube clips of this and there doesn't seem to be any recommendations for me when I go back to the home page. Anyone else notice this?

217 points by jacobr 15y ago

This is a hoax. Put down your pitchforks. http://www.dailymail.co.uk/news/article-2042717/Alessio-Rastani-How-did-BBC-mistake-day-trader-Master-Universe.html http://www.dailymail.co.uk/news/article-2042717/Alessio-Rast...

casca 15y ago

This was cleverly done by the The Yes Men: http://theyesmen.org/ http://theyesmen.org/. For proof, look at http://en.wikipedia.org/wiki/File:Dow_apologizes.jpg http://en.wikipedia.org/wiki/File:Dow_apologizes.jpg from http://en.wikipedia.org/wiki/The_Yes_Men http://en.wikipedia.org/wiki/The_Yes_Men

mcantelon 15y ago
Not a Yes Man. Twitter feed has 1772 Tweets and contains technical-analysis-based-predictions (like Sept 16 prediction of gold crashing: http://www.facebook.com/video/video.php?v=284602891566784 http://www.facebook.com/video/video.php?v=284602891566784).
msutherl 15y ago
um, no, that's not proof
gkanai 15y ago
Rastani is not among The Yes Men. http://www.yeslab.org/rastani http://www.yeslab.org/rastani

gaius 15y ago

This Goldman Sachs? http://dealbook.nytimes.com/2011/09/26/goldman-sachs-draws-up-deeper-cuts/ http://dealbook.nytimes.com/2011/09/26/goldman-sachs-draws-u... They're cutting the size of their coffee cups to save money, hardly secret rulers of the world stuff, is it? This guy was just saying exactly what BBC viewers wanted to hear... That it was the evil bankers fault, not people taking out more mortgage than they could afford.

mootothemax 15y ago
This Goldman Sachs? [link] They're cutting the size of their coffee cups to save money, hardly secret rulers of the world stuff, is it? That's the same Goldman Sachs that made a profit of $2.7 billion in the first quarter of this year alone: http://www.guardian.co.uk/business/2011/apr/19/goldman-sachs-smashes-forecasts-first-quarter-profit http://www.guardian.co.uk/business/2011/apr/19/goldman-sachs...
- gaius 15y ago
  That's one number taken out of context. With a market cap of $50Bn, there are plenty of companies with comparable numbers. Not sure why my comment was downvoted, if the secret of ruling the world is using smaller coffee cups, anyone can do it...
- cellis 15y ago
  Yeah, and that $2.7 billion in profit is after paying ridiculous compensation to most of the firm. Chew on that.
  - gaius 15y ago
    Oh please. The HN dream is riches beyond imagination just for making a website. Pot meet kettle.
    - dasil003 15y ago
      Some of us actually want to make something useful.
    - BadCookie 15y ago
      The difference is that we generally only get rich if we help people. Financial types often get rich (much more reliably than us) by screwing over people, luring them into indebtedness, and profiting from (and, I would argue, causing) the losses of others.
      - 15y ago

mootothemax 15y ago

I'm still wondering how much of what the trader said was motivated by a desire to raise his profile for his after-dinner speaking engagements. His name's Alessio Rastani, and he's got the basics already set up for some social media fun: https://www.facebook.com/alessiorastani https://www.facebook.com/alessiorastani http://twitter.com/#!/alessiorastani http://twitter.com/#!/alessiorastani

fserb 15y ago

This guy sounds a lot like a Yes Men intervention.

brown9-2 15y ago
A few people are reporting that it is in fact a hoax: http://nymag.com/daily/intel/2011/09/bbcs_goldman_sachs_rules_the_w.html http://nymag.com/daily/intel/2011/09/bbcs_goldman_sachs_rule...
motters 15y ago
At first I also assumed the same. However, if it's a hoax it's a pretty elaborate one. He appears to have an online presence as a trader going back at least to 2009. My guess is that he's just making outrageous statements so that he can get on other news and chat shows.
- dbfclark 15y ago
  http://www.forbes.com/sites/emilylambert/2011/09/27/trader-or-prankster-we-called-alessio-rastani-and-asked/ http://www.forbes.com/sites/emilylambert/2011/09/27/trader-o... Is some actual reporting. He's an individual day trader, not an institutional trader of any kind. So I'd say you're pretty right.
jfruh 15y ago
Felix Salmon makes the interesting point that he could be a trader and a Yes Man: http://blogs.reuters.com/felix-salmon/2011/09/27/is-alessio-rastani-a-yes-man/ http://blogs.reuters.com/felix-salmon/2011/09/27/is-alessio-... "You don’t need to spend very much time hanging around the comments section (or even many of the posts) at Zero Hedge to discern a strong nihilistic and even anti-capitalist strain to much of the thinking in that community. Independent traders are often men in their 20s and 30s who inherited a substantial sum of money and who for whatever reason don’t have a more attractive opportunity in the regular workforce. They work from home, they tend to have a strong contrarian streak, and they have a lot of time on their hands ... It’s a common misconception that all traders are die-hard capitalists. But in fact many of them are quite the opposite. They still want to make money, of course. But that doesn’t mean they want the stock market to go up."

Construct 15y ago

This man is described as an "independent market trader" in the attached article. His twitter profile ( http://twitter.com/#!/alessiorastani http://twitter.com/#!/alessiorastani ) describes him as a "Keynote speaker" and a "Mentor and dedicated to helping others succeed". That doesn't exactly inspire much confidence. In fact, it is pretty obvious that he has set out to make a name for himself through this controversy. Furthermore, he has obviously bet heavily on a near-term market crash. He's now financially and emotionally invested in a market crash, so of course he will be confident that it's going to happen. And if his doomsday video circulates the internet and makes a dent, however tiny, in investor sentiment then he has also effectively pushed the market (in a very tiny way) toward his goal. Take a look at one of his recent tweets: "I've been waiting for this stock market crash for 3 years. #finance #economy" The world economy is in trouble, no doubt, but let's remain reasonable and rational here. Spend enough time around financial types, and you can always find a doomsayer like this man in any sort of economy.

kayhi 15y ago
Looks like more investigating has been done: http://goo.gl/Yp447 http://goo.gl/Yp447 with the result not looking good along the same lines that you mentioned.
silverbax88 15y ago
This is an extremely valid point. If you look at the stories that are posted daily on Yahoo! Finance, nearly all of them are market predictions by people with a vested interest in their predictions (beyond simply trying to be correct). I think this is still lost on most consumers; most people think stock analysts are the same as economists, and that's completely wrong. A good economist will tell you that they can't predict the stock market, but they can tell you what the economy will do. That's enough to let you know that the direction of the economy and the stock market are not directly linked.
- dxbydt 15y ago
  >> A good economist ...can tell you what the economy will do. I was sipping a venti mocha when I read this and I laughed so hard there's mocha all over my keyboard. There are people here, actual paid economists, who are doubling up in laughter at your assertion.

sixtofour 15y ago

"Learn how to make money in a downward market." OK. As an individual who is not rich, where to start that learning?

fastchicken 15y ago
Look up Put options and shorting stock. Thats a good start. BTW, not exactly something you'd expect to do without some training. Like an average person setting up and running an EC2 cluster.
DanI-S 15y ago
Congratulations; you've just hit upon the problem.
philbarr 15y ago
I'm not rich either and had absolutely no idea about shares, so figured I should learn and am now reading "Investing In Shares For Dummies" - UK Edition. I know it's a For Dummies book but as I really knew nothing I had to start somewhere. It's been pretty good so far - particularly highlighting the difference between speculating (trying to get rich quick / gambling) and aggressive and cautious investing (where you expect returns in 2 - 5 years). In the chapter on bear markets (downward markets) the advice is: - Keep your money safe - use interest bearing vehicles such as bank and building society accounts (hmm, really, didn't people lose money in those?), National Savings certificates, or guaranteed income bonds. - Stick to necessities - get shares in stuff people always need, like food. - Use trailing stops. I guess once the market HAS crashed if you're sure which shares are way below value simply because of the crash you could buy those and wait until the market returns to normal?
- dotBen 15y ago
  "Investing In Shares For Dummies" Just make sure your reading material matches your expectations. They're going to ultimately teach you the "buy low, sell high" basics. And that's fine if you are just hobbying. What other folks in this sub-thread are talking about - shorting, puts, calls, futures, speculating against commodities and treasuries (not just buying them)... these are what the pros are doing and probably not going to be covered in 'for Dummies'. Whether or not you'll make/lose more money with one or the other is beyond scope here...

dasil003 15y ago

Those who talk don't know, and those who know don't talk.

dualogy 15y ago
Nice talking, dasil!

Vivtek 15y ago

Well, given that the Euro is not falling against the dollar, the one thing he says that I can easily check (that everybody's scared about the Euro and is moving their money into dollars) is plain false. My assumption is everything else is, too. As Construct says (and as I commented on elsewhere) he's emotionally invested in seeing doom on all sides.

marcamillion 15y ago
I would have to disagree with this: http://finance.yahoo.com/echarts?s=EURUSD=X+Interactive#chart6:symbol=eurusd=x;range=6m;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined http://finance.yahoo.com/echarts?s=EURUSD=X+Interactive#char... That's a 6 months chart. From May 2011(1.48 Eur to 1 USD) to today(1.35 Eur to 1 USD), it has been very volatile but generally trending down. So I would say he is right.
- Vivtek 15y ago
  Now look at the year's chart. That $1.48 was great, but it was probably due to the scare over the creditworthiness of the US - and now that that crisis is past, we're heading back to roughly where the Euro/dollar ratio has been for a couple of years now. I get paid mostly in Euros, and my debts are all in dollars. That makes me emotionally invested, too, but it also means I know what the Euro/dollar ratio is doing all too well.

amitparikh 15y ago

Bulls make money, Bears make money. It's the pigs that get slaughtered.

Francon 15y ago

Historically speaking, we've never seen an economy succeed long term when the monetary system is based on a fiat (fake) currency. Sadly, this trader is telling the truth: "We bought the ticket so take the ride and profit" is the message to people. This is a manufactured crisis but it matters not weather it is intentional or unintended. It is happening. Historic precedent exists for this. The Collapse of: Egyptian Empire, Roman Empire, U.S.S.R. and Zimbabwe. All from fiat overexertion of an unsustainable empire or economies. The history of fiat money, to put it kindly, has been one of failure. Seems this trader is going to profit from the shift rather than sit idly by waiting for some magical intervention.

JimmyMiller 15y ago
Don't forget about Yugoslavia and Argentina!
eftpotrm 15y ago
While the history of commodity-backed money was one of major problems with restricted money supply, of industrial use of said commodities becoming prohibitive and itself becoming an economic limit, of significant periodic deflation and currency fluctuation based on mining returns. Fiat money isn't ideal, but neither was the gold standard.
nhaehnle 15y ago
Egyptian and Roman Empires? Where is your data suggesting that their collapses had anything to do with fiat money? USSR? It's pretty clear that they suffered a lot due to economic mismanagement (i.e. inefficiencies due to how their economy was run), but that had nothing to do with whether fiat money was involved or not. Zimbabwe? The causes of hyperinflation was a combination of a collapse of (especially) the agricultural sector and foreign-currency denominated debts. Both events were caused by political decisions, not by fiat money. It is likely that all the collapses you mentioned (including the ancient ones) involve some level of economic mismanagement, where the productive capacity of a society was destroyed, misallocated, or left idle. Fiat money was never the problem. If you disagree, please point out how fiat money was the problem, instead of only asserting it.

smogzer 15y ago

If everybody goes shorting the market like the meta-morph in there advises; skeletor, the guy controlling the markets from it's castle will make a short squeeze by buying those shorts and pretend to be he-man. Saving Europe and the likes and postponing the apocalipto, at least in the stock markets.

alins 15y ago

When an "analyst" comes to you and starts saying things like "if you know what to do ..." - this is the mark of a snake oil salesman. Next thing he will do is to ask you for money to learn about his "strategy". This guy is an idiot who wants to make a name for himself so he makes these kinds of statements to get attention. At this point the last thing Goldman Sachs wants is a total collapse of markets and economy.

npollock 15y ago

You've got to imagine the BBC does some kind of background check on the people it puts on air. Typically speakers hail from the big banks and funds, it's unusual to give a virtual unknown the pulpit. I wonder what kind of guidelines they establish before they allow you on air. Did they know he was that biased?

grandalf 15y ago

This is an extremely obvious point masquerading as something controversial. In a market with 10 large financial firms, all of varying strength, a capital crisis may put a few of the weaker ones out of business, since a capital shortage means that a firm doesn't have enough liquid capital to cover its underwriting obligations and its cash flow needs. When this happens, weaker firms are hamstrung if they can't raise additional capital. Typically the government provides free capital in the form of below market loans which can be turned into profitable short term loans at zero risk. This means that the valuable assets will be gobbled up by the stronger firms and there will be less competition across the board. Thus Goldman, as the strongest global financial firm, stands to gain the most from any crisis. Regulators required all US financial firms to accept bailout assistance precisely to avoid what would have likely been the outcome of the crisis -- one or two super firms. Even if all surviving firms shrunk by 80% post crisis, the resulting diminished competition would be a win for the surviving firms' investors. It's debatable in the scenario of the 2008 crisis whether Goldman would have survived if AIG hadn't been bailed out. I think it likely would have, but it would have had to raise additional capital from investors... As it was Buffet invested around $5B (but could have easily invested much more -- and the yield would have been way better if more competitors had been allowed to fail). As a result of this, and the various interests involved, much effort was expended to preserve the status quo. One might ask what it would take for there to be legitimate competition in the financial services market... My take is that policymakers' desire for cheap (below market price) credit can only be implemented through the sort of public/private partnership... aka socialized financial services like the ones we have in the US. To put it succinctly, cheap credit is a right. It would be interesting to run an experiment to see how much this policy has impacted American democracy (for better and worse). I don't think such an experiment would be possible though.

steve8918 15y ago

The thing is that this trader isn't saying anything that people don't already know. Milton Friedman predicted this when the Euro was first created, that it would last only until its first currency crisis. Greece is in really, really bad shape. The normal way a country gets out of this problem is by devaluing its currency, and enacting fiscal policy measures. Look at Iceland for a recent example, and the Asian currency crisis back in 97-98. However, Greece is stuck. It can't devalue its currency, because they are part of the Euro. The only way to get this to work is by getting the other European nations to pay for Greece through Eurobonds, but NO ONE WANTS TO. In fact, if a politician did so, they would get voted out. So there is no political will to pay for Greece, which means that Europe is in between a rock and a hard place. They can do handwaving, etc, but it seems really likely that this European debt crisis will bring down Spain (20% unemployment, 40% youth unemployment and a housing bubble burst), Portugal, and worst case Italy. It's confidence contagion and it will continue to spiral out of control until they eject Greece out of the EU. So now, we know that Europe is screwed. Will their plan to give 50% haircuts work? Or will everyone leave Europe entirely? This is the question, and I frankly doubt it, just like the trader said. YOU CAN'T SOLVE A DEBT CRISIS BY ISSUING MORE DEBT!!! Once Greek bond holders get 50% haircuts, what about Ireland and Portugal? Will there be mass selling of those sovereign bonds? It will be a big domino effect, and the outcome is completely unpredictable at this point, but the one predictable thing is that the politicians will likely screw it up, because they lack political courage. So the advice the trader gives is essentially right. Stay in safe havens for now, if you have money you can't afford to lose. I would stay in short-term US Treasuries so that you don't need to worry about interest rate issues. Don't try to catch bottoms unless you're playing with money you can afford to lose. Right now, the choppiness in the markets are unparalleled, so unless you really know what you're doing, safe havens are the best.

SkyMarshal 15y ago
"I would stay in short-term US Treasuries" For anyone not aware, you can buy these directly from the US Treasury: http://treasurydirect.gov/ http://treasurydirect.gov/ * T-Bill = shortest duration (4 weeks to 1 year) * T-Note = med duration (2 yrs to 10 yrs) * T-Bond = long duration (30yrs) T-Bills are the safest, as they are used to run the US Govt's day-to-day operations. If the US govt ever defaults, T-Bills will be the last type of bonds it defaults on, after the longer-term stuff. More here: http://treasurydirect.gov/indiv/research/indepth/indepth.htm http://treasurydirect.gov/indiv/research/indepth/indepth.htm

crag 15y ago

Ok first of all.. the markets are always driven by fear. Fear of losing and the thrill of not losing (in other words, risk) is the whole point. So lets get that out of the way. Looking at this man, he's bet heavily on a crash so what would you expect him to say? Frankly I'm a little surprised they gave him air time.

chailatte 15y ago

He is telling the truth. Startup: Record Number of Companies Pull Back on IPOs http://www.newsmax.com/InvestingAnalysis/ipo-offerings-companies-initial/2011/09/20/id/411669 http://www.newsmax.com/InvestingAnalysis/ipo-offerings-compa... Europe: EFSF - 133% Of German GDP To Cover All Of Europe's Bad Debt http://www.zerohedge.com/news/explaining-how-just-announced-ecb-market-rescue-pledged-133-german-gdp-cover-all-europes-bad-de http://www.zerohedge.com/news/explaining-how-just-announced-... Germany rejects idea of further EFSF expansion http://www.marketwatch.com/story/germany-rejects-idea-of-further-efsf-expansion-2011-09-27?link=MW_latest_news http://www.marketwatch.com/story/germany-rejects-idea-of-fur... China: Chinese growth could slow to zero in 2012 http://www.iii.co.uk/articles/18948/chinese-growth-could-slow-zero-2012 http://www.iii.co.uk/articles/18948/chinese-growth-could-slo... Cash Crunch in China Picks Up Momentum; Chinese Economy "Teetering On the Edge" http://globaleconomicanalysis.blogspot.com/2011/09/cash-crunch-in-china-picks-up-momentum.html http://globaleconomicanalysis.blogspot.com/2011/09/cash-crun... Japan: Japanese economy contracted more severely than previously reported http://online.wsj.com/article/SB10001424053111903285704576559380092114762.html http://online.wsj.com/article/SB1000142405311190328570457655... Japan auto lobby cuts 2011 sales outlook by 10 pct http://www.reuters.com/article/2011/09/27/autos-japan-idUSL3E7KR0RG20110927 http://www.reuters.com/article/2011/09/27/autos-japan-idUSL3... US: Consumer Confidence Stagnates Near Two-Year Low http://www.businessweek.com/news/2011-09-27/u-s-economy-consumer-confidence-stagnates-near-two-year-low.html http://www.businessweek.com/news/2011-09-27/u-s-economy-cons... Food stamp use rises to record 45.8 million http://money.cnn.com/2011/08/04/pf/food_stamps_record_high/index.htm http://money.cnn.com/2011/08/04/pf/food_stamps_record_high/i... Overall: Are We Headed Into A Recess/Depress-ion? The Answer In 9 Simple Charts http://www.zerohedge.com/news/are-we-headed-recessdepress-ion-answer-9-simple-charts http://www.zerohedge.com/news/are-we-headed-recessdepress-io... All signs point to the second dip in the global economic depression.

coffeeaddicted 15y ago
Don't know about the rest, but the german chancelor did fight all the last days _for_ the EFSF expansion and currently it looks rather like it will get through. There's been a few politicians (around 25) in the ruling coalition which were against it, but even the opposition already agreed to support it.

andrewcanis 15y ago

Whenever I hear doomsayers like this I try to remember Warren Buffett's advice, "Be fearful when others are greedy and greedy when others are fearful."

plessthenpoint5 15y ago

sorry.... but what a dick.

mcphilip 15y ago

This man's fishing for attention, IMO, but there is some degree of brutal honestly in how he describes a trader's outlook. Many traders eagerly await swings in volatility as opportunities to make a lot of money; the reason for the swing (e.g. global financial market turmoil) is irrelevant.

veyron 15y ago

Keep in mind 99% of people who go on CNBC or make stupid reports or recommendations have no vested interest in the implied outcome. None whatsoever. They are selling books or selling newsletters or selling videos or selling infrastructure or selling trade ideas, but definitely have NO skin in the game. It's also very easy to call yourself a trader: just get a zecco (or w/e the retail company of the month is), seed with 1000, and buy one share of a penny stock. Congrats: you are a trader :)

asbig 15y ago

I've just been looking at youtube clips of this and there doesn't seem to be any recommendations for me when I go back to the home page. Anyone else notice this?