Comovements and Contramovements, from Victor Niederhoffer
In considering the ecology of markets it is always helpful to see what's moving in conjunction with other things. Here's a interesting 2 by 2 table (a template of which Galton and all his followers should always keep in their wallet for updating with pin pricks).
It is a shocking table that shows that increases and decreases in wealth, what I used to call healthy and unhealthy days respectively, in both big markets in conjunction are half as likely as counter moves in the two, when US wealth is relatively little changed.
Steve Ellison writes in:
Not surprisingly, it seems the net result was a decrease in wealth. In a talk in Singapore yesterday, Brad DeLong estimated that global financial assets have shrunk from $80 trillion to $60 trillion in the past 18 months.