T2's Whitney Tilson On Toxic Trading
Submitted by Tyler Durden on 07/21/2009 - 21:50T2's Whitney Tilson on Themis Trading and Zero Hedge
The Credit Bubble Peak CMOs Are Back
Submitted by Tyler Durden on 07/21/2009 - 20:43Compliments of the melt-up market, brokers are so giddy they have opened up the "2007 - Boiler Room" folder and are selling whatever 2 year old toxic garbage is left to the most unwitting dumb money they can find. This is how excrement attempts to move from the balance sheet of a trillion asset BHC to the back pocket of potential investor XXX (luckily, XXX was smart enough to not only say go to hell, but to share a warning with the rest of Zero Hedge readers who may soon be targeted by comparable snakeoil salesmen).
The Day That Was - HFT's Superdominance
Submitted by Tyler Durden on 07/21/2009 - 20:30The three HFT horsemen are C, BAC and CIT. These three stocks traded 860 million shares today which is 10% of all US Equity volume. Think about that: 3 stocks in a universe of over 5000 U.S. stocks represented 10% of the volume. How could this be? Look at the intraday chart of all three of these stocks and you will see a something in common: an early morning move followed by a flatline with a very tight range (around .05). Meanwhile, while these stocks were flatlining the market was heading higher. The S&P 500 gained around 10 points in the afternoon (or 1%) but these 3 stocks did not move. There was a constant bid to these stocks yet anytime they wanted to lift there seemed to be a constant offer just a few pennies higher. This is what HFT looks like. The HFT’s made a killing in these 3 names today – in addition to the .01-.02 spread, they collected about .005/share in liquidity rebates. Not a bad day for a supercomputer.
Daily Credit Summary: July 21 - Risk Off, Risk On!
Submitted by Tyler Durden on 07/21/2009 - 18:45Spreads were mostly tighter in the US with HY outperforming IG and only HVOL (dominated by CIT) wider close-to-close (although all the indices were wider open-to-close as the morning's derisking gave way to rerisking in ther afternoon). Indices generally outperformed intrinsics (as we suspect correlation desks were actively covering between index and single-name hedges and off-the-runs outperformed on-the-runs) with skews widening in general as IG's skew decompressed as the index beat intrinsics, HVOL outperformed but widened the skew, ExHVOL outperformed pushing the skew wider, XO underperformed but compressed the skew, and HY's skew widened as it underperformed (but HY made new contract tights below 900bps).
Is The SLP The NYSE's Answer To Direct Edge's "Advance Look" Enhanced Liquidity Provider Program Or You Trade You Lose, You Trade...
Submitted by Tyler Durden on 07/21/2009 - 15:14There is a curious article in the latest edition of Traders Magazine. It is curious mostly because it was allowed to be published, as it definitively peels off the cover of what truly happens at the pantheon of stock exchanges, that dominated by a private club of select high frequency traders, who obtain better and faster pricing than everyone else, and where the group of "select few" is seemingly legally allowed and even encouraged to front-run the "every-one else" (you, dear reader, are most likely in the latter camp). If you ever wondered why HFT generates profits of over $20 billion a year, please read this article.
Accumulation Volume Picking Up To Downside
Submitted by Tyler Durden on 07/21/2009 - 13:59
As seems to be the case all too often, volume picks up only when the market starts dropping. Updays see a general decline in relative volume, compensated only by downdays: basically fewer and fewer trade to the upside and only the liquidity providers give the illusion that there is notable volume which is "pushing" the market higher. Down days expose this for the scam it is.
Grayson Grilling Bernanke On Half A Trillion In Foreign Liquidity Swaps And The Constitutional Basis For Such
Submitted by Tyler Durden on 07/21/2009 - 13:20Grayson asks Bernanke about the $550B (as of 12/31/08) in liquidity swaps with foreign central banks. Who got the money? How did the Fed lend this much money without the consent of Congress? Did these loans push up the value of the dollar?
- At minute 1:30, Bernanke can’t say which financial institutions got the money.
- At minute 3:19, Bernanke says that the 30% rise in the dollar which took place at the same time as the Federal Reserve lent out $500B to foreign central banks was just a coincidence.
- At minute 3:45, Bernanke and Grayson discuss the Constitutional basis for the Federal Reserve lending a half a trillion dollars to foreigners.
The Commoditization Of America V2
Submitted by Tyler Durden on 07/21/2009 - 12:17
Every stock trader's outbound was secretly replaced with a FOREX line last night. If not, someone please explain the 0.98 correlation. Fundamentals win the day again... not.(alas hitting
Canada Believes It Has A Tight Grip On Inflation
Submitted by Cornelius on 07/21/2009 - 11:10The Canadian rate decision is standing solid at 0.25 and the BoC expects to be able to control inflation going forward.
Guest Posts: Even Simpler And High-Frequency Trading Alert - CIT
Submitted by Tyler Durden on 07/21/2009 - 10:53Some more thoughts on High Frequency Trading in theory and practice.
Obama Does Not Need Congress To Fund IMF and WB, Barney Frank Shocked, Compares Obama To W.
Submitted by Tyler Durden on 07/21/2009 - 10:40Barney Frank puts on his indignation hat on after realizing that the President has decided he doesn't need congressional approval on funding international financial institutions including the IMF and the World Bank. Here is the ensuing response when Barney realizes that for all his posturing, he is a third (and quite overinflated at that) wheel: "During the previous administration, all of us were critical of the President’s assertion that he could pick and choose which aspects of congressional statutes he was required to enforce. We were therefore chagrined to see you appear to express a similar attitude." Most odd is why the President wants unopposed decision making with regard to these organizations: is Larry Summers smelling a massive, upcoming global bail out that the American people are not allowed to be heard on?
The $23.7 Trillion Backstop Heist
Submitted by Tyler Durden on 07/21/2009 - 09:23
The full SIGTARP report is below. It took Steve Liesman 5 minutes to read the 262 pages and refute it. Read between the lines and find out just how you, dear taxpayer, are being robbed by the Too Big To Fails and the Reserve Banking System. Much more info contained in this report, which attempts to grasp just how pervasive the involuntary taxpayer support of Wall Street is, including a great overview of the Federal Reserve Banking System. Neil, you are doing a tremendous job: please contact Zero Hedge at your convenience for some of our thoughts on the matter: sigtarp@zerohedge.com Neil's presentation (happening on his birthday) to the Congressional Oversight Committee which is going on live right now can be seen here... Much more relevant than the Federal Reserve propaganda spewing forth from General Electric subsidiaries.
Bernanke Prepares For Congressional Grilling
Submitted by Tyler Durden on 07/21/2009 - 08:03As Bernanke heads to Congress to defend the Fed's Independce, he releases this WSJ Op-Ed:
The depth and breadth of the global recession has required a highly
accommodative monetary policy. Since the onset of the financial crisis
nearly two years ago, the Federal Reserve has reduced the interest-rate
target for overnight lending between banks (the federal-funds rate)
nearly to zero. We have also greatly expanded the size of the Fed’s
balance sheet through purchases of longer-term securities and through
targeted lending programs aimed at restarting the flow of credit.
Trouble In Wall Street's Paradise, Full Frontal V2, Or The La Jolla Outing...
Submitted by Tyler Durden on 07/21/2009 - 07:55So many titles to choose from...
