December 30, 2015


Most of you are out this week, but you’ve got phones.

Unless you’re disconnected from them like we were (by choice) a couple weeks back in the Caribbean, you’ll see this post. Send it to your CEO and CFO.

Whatever the theme for the year – “it ended flat,” “The Fed led,” “August Correction,” “Flash Boys,” “The Year of the ETF” – we’ll wrap it by pointing you to our friends at Themis Trading for a final lesson on market structure.  Read “Yale Investment Chief: America’s Equity Markets are Broken,” (if you’re not reading the Themis blog you should be) and reflect:

-The $25 billion Yale endowment fund favors private investments where horizons are longer and less liquid. Think about how often you’ve heard you need “more liquidity.”

-“Market fragmentation allows high-frequency traders and exchanges to profit at the expense of long-term investors.”

-“Market depth is an illusion that fades in the face of real buying and selling.”

-“Exchanges advance the interests of traders by sponsoring esoteric order types, which for hard-to-understand reasons receive the approval of the SEC.”

-And if you’ve not yet done so, read Flash Boys

Then read this editorial in the New York Times.

On January 6, we’ll talk about 2016.  Happy New Year!

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