This sell-off was caused by a computer-driven ‘footrace,’ Jim Cramer says

Sell-off caused by computer-driven 'footrace,' says Jim Cramer

Sell-off caused by computer-driven ‘footrace,’ says Jim Cramer   11 Hours Ago | 01:10

As CNBC’s Jim Cramer watched stocks nosedive in Tuesday’s trading session, one thing became abundantly clear to the longtime market-watcher: it “was all about the rise of the machines.”

The major averages all fell more than 2 percent as a possible slowdown signal in the bond market and lingering trade fears rattled investors. The Dow Jones Industrial Average fell more than 800 points intraday.

Some attributed the dramatic declines to a lack of buyers, but Cramer already knew the culprits: complex algorithmic programs set up by professional money managers to sell when the odds of future market losses increase.

In other words, when an event that often precedes a recession occurs — in Tuesday’s case, short-term interest rates trading above long-term rates in a so-called yield curve inversion — some trading algorithms will automatically begin selling securities because the chances of an economic slowdown just got higher.

Cramer, host of “Mad Money,” drew a comparison with football. Some plays can seem very risky, but when you consider the percentage chances of them going right, there’s no choice but to implement them in the field. These programs make the same kind of calculation.

So, when the two-year and the five-year yield curves inverted on Tuesday, some hedge funds’ programs automatically sold the S&P 500, which tends to fall in times of economic weakness, and others automatically sold shares of the big banks, which suffer when long-term rates are lower, Cramer said.

“Why? Because historically, this situation has produced negative results for the bank stocks and these hedge funds are trying to get out ahead of others who fear those negative results but just don’t know they’re going to fear them. It’s a footrace,” he explained. “This curve, as they call it, overrides whatever you hear about good employment or consumer balance sheets or robust lending. It’s predictive.”

Worse, the charts are signaling more pain ahead: based on Cramer’s analysis, many hedge funds likely sold the S&P 500 when it dipped below its 200-day moving average because, in the past, that move tended to bring more downside.

“Here’s the problem: there are now so many hedge funds using the same algorithm, same programs [that] there simply aren’t enough investors willing to take the other side of the trade. If we all know that stocks go down on certain triggers, then who the heck would want to buy stocks?” Cramer said.

“That’s how you get a day like today, where the market goes into free-fall,” the “Mad Money” host continued. “When the percentages are against you and the algorithms are in charge, … nobody wants to try to be a hero and bet against them.”


Could this be Suzuki’s next big bike to come to India?

Suzuki V-Strom 650XT

Among the unveiling of the Burgman 150, Intruder Fi, GSX-S 750 and the other big bikes at the Suzuki pavilion, there stood a very interesting bike. It was the Suzuki V-Strom 650 XT. Now, Suzuki does sell the larger V-Strom 1000 in India but they chose to showcase the mid-size ADV here. This could be Suzuki planning to get it here as they do not have a contender in the midsize ADV segment, which currently has just the Kawasaki Versys 650. We spoke to Suzuki officials and they did indicate a plan to get it here in CKD trim. They are currently working on the feasibility of sharing their Hayabusa production line, which will now also assemble the GSX-S750. Here’s what you need to know about the V-Strom.


Suzuki V-Strom 650XT

as is the case with the Kawasaki rival, the Suzuki V-Strom 650’s design is also based on its elder sibling, the V-Strom 1000. It looks purposeful with the front beak neatly integrated below the headlamp and a large manually adjustable windscreen. Most of the plastics remain at the front while the rear has a minimalistic appearance. It also gets mounting points for luggage panniers and a top box. Despite the looks, the V-Strom 650 is more compact than its 1000cc cousin. Fuel tank capacity is 20 litres.

Suzuki V-Strom 650XT

It gets a multifunction instrument cluster with an analogue tachometer and two digital screens that display a host of information. The XT version is the more off-road-oriented one, with spoked wheels and dual-purpose tyres, knuckle guards and engine guards.


Suzuki V-Strom 650XT

At the heart sits a 650cc V-twin that was recently updated to Euro IV specs. It features better low-end and midrange torque spread. The exhaust unit is a new one and has been narrowed down to make space for panniers. The motor makes 70PS at 8800rpm and 62Nm of torque at 6500rpm. It gets Suzuki’s low rpm assist which makes for smoother pick up from idling speeds. New is traction control lifted off the V-Strom 1000. It gets 3 modes and can be completely switched off if desired.


Suzuki V-Strom 650XT

The ADV uses a twin spar frame that has been strengthened to take on two riders and their luggage with ease. The seat height is 835mm but riders should not have an issue getting their feet to the ground owing to the narrow profile. Suspension setup is fairly simple: preload-adjustable 43mm front forks and rear monoshock adjustable for preload and damping.

Suzuki V-Strom 650XT

The XT version gets 19-inch front and 17-inch rear wheels wrapped in dual-purpose Bridgestone Battlax tubeless tyres. Braking is via twin 310mm discs and a single 260mm rear disc. It gets ABS as standard.


Suzuki V-Strom 650XT

If Suzuki plans to assemble the V-Strom 650 XT here, they could undercut the Versys 650 in terms of pricing. The V-Strom 650 XT would prove more capable in the rough stuff thanks to its tyre setup and more accessible low-end torque courtesy the V-twin motor. Now, if all goes well, we could be looking at this bike launching here by the end of this year or early next year. Stay tuned for more info.


10 Ways Blockchain Could Change The Marketing Industry This Year

Bitcoin. Cryptocurrency. Ethereum. These related buzzwords have been in just about every business publication lately, and it seems that everyone wants to learn more about blockchain, the decentralized ledger technology behind it all.

Experts predict that 2018 will be a huge year for blockchain, noting that the technology is poised to dramatically change a wide range of existing industries. What does the rise of blockchain mean for digital marketing? We asked members of the Forbes AgencyCouncil to share their thoughts.

Images courtesy of FAC members.

FAC members weigh in on the blockchain.

1. Brands Will Be Able To Better Target Consumers

Like many emerging technologies, it is very early to truly understand how blockchain will impact marketing. It has the ability to remove the middleman in digital advertising. However, that may take years to displace Google and Facebook, if ever. Because of blockchain’s transparency, it will initially help brands build trust with consumers. – Lisa Allocca, Red Javelin Communications

2. Malicious Ads Will Grow

JavaScript-based cryptocurrency miners have already been found in the wild, wasting visitors’ CPU power to send “coins” back to website owners. 2018 will see an explosion of this type of shady ad to top-tier sites, especially as “on by default” ad blockers become more popular. Website owners will be searching for new ways to monetize but must balance the ethical use of their visitors’ resources. – Marc Hardgrove, The HOTH

3. Privacy Concerns Will Be Resolved And Advertiser Trust Will Increase

Giving users control over the amount of personal information they reveal appeases privacy concerns from the user perspective and promotes social responsibility from the advertiser’s side. Studies routinely show that if you ask permission first, users are more than willing to give you personal information if there’s a reward in turn. That reward is paying users directly to view ads. – Kristopher Jones,

4. Decentralization Will Remove The Media Middlemen

Marketing and advertising startups in the blockchain space are already popping up. These aim to tokenize user behavior and offer a sort of credit system between advertisers and the consumer, which completely removes the massive middlemen managing big media. As we continue to decentralize our world, this is inevitable. Be smart. Move away from being a middleman. Be the source. – Trevor Chapman, Trevor Chapman Group

5. The Fraud Verification Industry Will Grow

Advertising online is complex when it comes to ensuring media is bought and delivered as intended. Blockchain will make this more transparent. I predict that fraud verification companies will, or have already begun, the blockchain process to evaluate how we can stop bots and fraudsters from stealing ad dollars from brands. Blockchain will allow us to verify who, how and where ads run. – Ashley Walters, Empower MediaMarketing

6. Delivery And Reporting Will Transform

The first marketing area affected last year by blockchain, even on a small scale, was video content delivery. That will extend beyond video to more content producers this year. They will love how they can control how their assets are delivered and ensure it’s properly tracked. Then, once advertisers experience verified delivery and reporting, it will be required. – Todd Earwood, MoneyPath Marketing

7. Advertising Will Become More Transparent

Marketers love to publish case studies of their outliers that are getting amazing results. The gradual implementation of blockchain will provide transparency on marketing claims by every journey having the ability to be analyzed and validated. This will even lead to the ability to also negotiate contracts and accept terms based on those results. – Douglas Karr, DK New Media

8. Influencers Will Become Fewer In Number But Better In Quality

Influencer marketing campaigns are going to change dramatically. With blockchain, marketers will be able to see if the influencer’s followers are true people or simply bots. Essentially, it will reduce the number of influencers but leave the top influencers at the top. – Loren Baker, Foundation Digital

9. Publishers Will Become More Accountable

Technologies like Ethereum make publishers more accountable as transactions become more transparent. Advertisers can see exactly where their traffic is going. Ad data is paramount — it’s shocking how much information we don’t have. Measuring impressions doesn’t cut it. Blockchain technology will unveil everything, decreasing fraud and increasing attribution. – Michael Weinhouse, Logical Position

10. It Will Solve Numerous Industry Issues

There are blockchain projects being created that might provide solutions around payment processing or fraud prevention within the ad exchange environment. Other areas of interest blockchain technology could solve for are measurement, invoice reconciliation and publisher/advertiser transactions. – Chad Recchia, Awlogy