- Wall Street trader with over 45 years of experience, George Robertson, believes that a correction is inevitable in the markets.
- Considering that most companies are not ready for it, they are practically dead already.
Veteran trader George Robertson gave a figurative description of the modern financial industry:
I see a lot of ghosts. They’re already dead. And they don’t even know it.
Over four decades, Robertson has lived through nearly every major financial crisis, from the collapse of Long-Term Capital Management to the 2008 financial crisis and the COVID-19 market panic. Now, however, According to Robertson, markets face a structural risk unlike anything they have seen before.
According to him, the stock market no longer functions as a healthy pricing system, but behaves like a single synchronized instrument dominated by quantitative trading firms using enormous leverage in global markets.
The market trades equally
According to the respected trader, many large quantitative firms employ graduates of the same elite universities, trained in identical mathematical methods and machine learning techniques. As a result, capital is often invested in the same trades simultaneously.
Recently, Jane Street сообщили reported $16,1 billion in trading revenue for the quarter. For the full year 2025, the company is expected to generate nearly $40 billion in trading revenue, surpassing the combined trading volumes of several major Wall Street banks.
The example of Jane Street, which has 3500 employees, shows how much influence algorithmic firms can have on liquidity with the help of technology and borrowed funds.
And here Robertson noted that when similar firms leverage at a ratio of 10 to 1, the total amount of risk in the system will reach trillions of dollars. One day, something will blow up.
Risks accumulate unnoticed
Given geopolitical tensions, high interest rates, and inflation concerns, relatively low market volatility and calm can signal danger. Without consistent small corrections, market distortions accumulate beneath the surface, so the inevitable correction could be extremely sharp.
And there were examples of this: during “flash crash” of 2010 The Dow Jones Industrial Average fell nearly 1000 points in minutes. In 2018, volatility-related exchange-traded products collapsed in a matter of hours after computerized trading strategies closed positions during a market surge.
Robertson believes these events highlight how fragile modern society can become. liquidity, when too many firms rely on similar strategies.
Growing concentration in the financial and technology sectors
The seasoned trader also warned that concentration has increased not only in the financial sector but also in the technology sector.
A small number of companies, including Nvidia, Microsoft, Alphabet, and Amazon, control significant portions of the artificial intelligence, cloud computing, and semiconductor infrastructure.
Critics say the situation is reminiscent of early periods of industrial concentration, dominated by figures such as John D. Rockefeller and Andrew Carnegie.
Currently, US stock market capitalization relative to GDP remains high. The so-called Buffett indicator, popularized by Warren Buffett, continues to signal that financial asset prices may be overvalued relative to underlying economic output.
There are no simple solutions
In the current environment, Robertson acknowledges there is no simple solution. With over 45 years on Wall Street, he remains convinced that suppressed volatility and artificial stability cannot last forever.
A correction is inevitable. Price formation will return, the expert believes.
Investors now need to consider whether a major correction will occur before they can comprehend the risks, or whether markets will force them to cope with the consequences.
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