Dr. Harald Malmgren on Global Economy, Automated Trading | Podcast
Talking points on this podcast:
- Global economy and outlook discussion
- The share price rally in the face of poor economic data
- Automated trading and how it will unfold
This time on Trading Global Markets Decoded, our host Martin Essex is joined by economist, geopolitical and geo-security strategist Dr Harald Malmgren, who was a senior advisor to four US Presidents: Kennedy, Johnson, Nixon and Ford.
In this episode we focus on the global economy, the share price rally, whether automated trading is a good or bad thing, and more. You can listen to this podcast by clicking on the YouTube link above or by using one of the alternative platforms listed below.
US and Global economic outlook
The discussion starts with the continuing economic outlook debate as the effects of coronavirus unfold. There’s a wide array of opinions, Harald notes, ranging from President Trump, who believes in a quick recovery, through to the more cautious warnings of institutions like Morgan Stanley and [Chair of the Federal Reserve] Jerome Powell.
“In my view the recovery will be far slower than the markets are expecting because, during this break, many businesses are either going out of business or they’re reconfiguring what they’re doing,” he says.
“But the main question is [around] new orders. The industrial downturn had begun last year, and already there were clear signs of industrial contraction long before the virus hit. So…industry is going to see that as the baseline, not the virus.”
He also points out that there is substantial overcapacity. “The most visible example is in the automotive sector, with unsold vehicles, and new orders are not showing any substantial rise yet. Production might be ramped up but orders are not going to be there to create the demand.”
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Automated trading: Is it good or bad?
Talk moves to automated trading: is it good or bad? “It’s an inevitable thing; computers are getting faster and faster and it’s in the nature of people in the financial markets to exploit the opportunities that faster information provides,” Harald says. “We’re finding ways for some people to move faster than others, see what’s happening then jump in and take advantage of being first.”
He says it will become bigger and bigger until prices are set by a few frontrunners. “It’s just a few firms that now truly dominate high-frequency trading, which is a large part of what happens in the markets. So is it good or bad? It’s unavoidable.”
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