By Irene Aldridge Last week, prices of several commodities declined abruptly: silver lost over a quarter of its value from April 29 to May 5, while oil plunged nearly 10% over the same period of time. The immediate question on the minds of many investors was whether the commodity run was over. And while the Federal Reserve has indicated that that they will deliver a soft landing to QE2, instead of an abrupt end that would have sparked inflation and sent commodities soaring, the signals of the Fed were by no means thought to have such profound impact on prices. Instead, as this note shows,
By Irene Aldridge Over the past three years, much of the online and cocktail party chatter has buzzed around the when to expect inflation. Everyone has long agreed that high inflation is inevitable, gold ETFs have been snapped up and prices driven to the sky by hedgers, yet month after month the level of inflation remains precariously low. According to the quantitative determinants of inflation the Fed adjusts money supply in response to oil prices, as such, with rising oil prices we can expect the Fed to take measures to reduce inflation expectations. Inflation is a function of many variables, with the amount of money
By Irene Aldridge High frequency trading has been taking Wall Street by storm. While no institution thoroughly tracks performance of high-frequency funds as of the date this article is written, colloquial evidence suggests that the majority of high-frequency managers delivered positive returns through the most recent financial crises. The discourse on what is the profitability of high-frequency trading strategies always runs into the question of availability of performance data on returns realized at different frequencies. Hard data on performance of high-frequency strategies is indeed hard to find. Hedge funds successfully running high-frequency strategies tend to shun the public limelight. Others produce data from questionable sources.