(And not the Mackenzie Brothers). The HFT boyz are making a real mess of the market. There is a huge divergence between stocks and bonds. Stocks are discounting a big improvement in earnings over the next year, while bonds are yelling “deflation” at the top of their lungs. One of them is wrong big-time, and it is stocks, and the HFT nonsense is to blame. Nothing could be clearer than these pictures from zero hedge. Bizarre is a major understatement. You think May 6 was an isolated event? Think again.

As someone with at least a strong interest in epistemology, it is encouraging to see someone point out the most basic flaw in economics, which is that it claims to know the unknowable. This is what religions do.

“…in the study of such complex phenomena as the market, which depend on the actions of many individuals, all the circumstances which will determine the outcome of a process, … will hardly ever be fully known or measurable.”

Is there hope for our oceans?. Frankly, I’m inclined to doubt it, given the relentless corruption of government by special interests.

If the Atlantic bluefin tuna were the first species to be fished into oblivion, its destruction would be shameful. But, of course, its story has become routine. Cod, once so plentiful off the coast of Newfoundland that they could be scooped up in baskets, are now scarce. The same goes for halibut, haddock, swordfish, marlin, and skate; it’s been calculated that stocks of large predatory fish have declined by ninety per cent in the past half century. In 1943, Rachel Carson was a young biologist working for the U.S. Fish and Wildlife Service when she wrote a booklet titled “Food from the Sea.” The point of the boosterish guide was to convince American consumers of the delectableness of fish like the wolffish, an enormous creature with a bulbous head, big teeth, and an eel-like body. Wolffish is “one of New England’s underexploited fishes, a condition that will be corrected when housewives discover its excellence,” Carson wrote. Apparently, she was so persuasive—and bottom trawling so wrecked its habitat—that the wolffish is now considered a threatened species.
The sorry state of ocean life has led to a new kind of fish story—a lament not for the one that got away but for the countless others that didn’t. In “Saved by the Sea: A Love Story with Fish” (St. Martin’s; $25.99), David Helvarg notes that each year sharks kill some five to eight humans worldwide; meanwhile we kill a hundred million of them. Dean Bavington, the author of “Managed Annihilation: An Unnatural History of the Newfoundland Cod Collapse” (University of British Columbia; $94), observes that two hundred billion pounds’ worth of cod were taken from Canada’s Grand Banks before 1992, when the cod simply ran out. In “Four Fish: The Future of the Last Wild Food” (Penguin Press; $25.95), Paul Greenberg estimates that somewhere in the range of a hundred million salmon larvae used to hatch in the Connecticut River each year. Now the number’s a lot easier to pin down: it’s zero. “The broad, complex genetic potential of the Connecticut River salmon,” Greenberg writes, has “vanished from the face of the earth.”

Andy Grove on job creation

From good old zero hedge, Friedman and Co. observes:

We continue to experience problems with our equity hedge program, a market-neutral strategy applied to U.S. stocks. For many years a successful program, earning above-average returns that were totally uncorrelated to S&P 500 returns, the program has repeatedly disappointed us in the most recent past, losing money in each of the past five quarters. This persistence of unfavourable outcomes is a totally unique event in the 19-year history of the program… Structural changes such as the proliferation of exchange-traded funds and super-rapid computer-based bloc trading, activities that are totally unconcerned with valuation metrics and/or long-term trends, are still taking place and there is little or no prospect of this development coming to an early end.