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From $44 To $4 In Less A Second: Today's Flash Crash Brought To You Courtesy Of The Nasdaq And A Clueless And Corrupt SEC

Tyler Durden's picture




 

Today's reverse engineered HFT algo strategy: if price drops more than x% in a millisecond, then enter order y% below bid, else pull all bids, especially when price is 90% below most recent NBBO posted a mere second earlier. Which is precisely what happened to Progress Energy (PGN), which dropped from $44 to $4 in less than second, but not in quantized fashion (i.e. fat finger), but in a gradual, than exponentially accelerating manner, as an algo took out all the bids. We can't wait for this week's 21st sequential outflow from equity funds: luckily investors are now all too aware that holding a stock, any stock, is dangerous to one's sanity, not to mention stop loss orders. And where the hell was the circuit breaker on this one? The market is and continues to be a miserable joke, especially courtesy of Nasdaq and the 160 trades in PGN that occurred at ridiculous, HFT-exaggerated prices. And of course, all those lucky fools who bought the stock at a 90% discount are about to be DKed, because it is Nasdaq's prerogative to protect its HFT paying clients, and not investors.

And here is the stepwise drop from $44 to $4, with no circuit breakers being activated. Total and absolute farce. In China someone would have taken a bullet for this. Only in America do the regumalators demand greater budgets, and year end bonuses, to continue their worthless shitjobs.

 

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Mon, 09/27/2010 - 13:37 | 607524 HedgeFun
HedgeFun's picture

A shout out to whatever computer bottom ticked that trade

Mon, 09/27/2010 - 15:12 | 607584 MarketTruth
MarketTruth's picture

"All your stocks are belong to us. We drop the bomb. HA HA HA!" -- HFT Computer

Mon, 09/27/2010 - 18:23 | 608413 kathy.chamberli...
kathy.chamberlin@gmail.com's picture

tyler '  S ,  i listened and listened and listened to the 3 part interview with MAX KEISER. at the very end after describing and discussing HFT and MAX's gas tank ripoff analogy. one of you said you would come back another time and talk with MAX. did you and if so does someone have that video link. it was really really interesting to hear one of you talk. well i liked your voice, strong with conviction, and that was a year ago.

Mon, 09/27/2010 - 13:38 | 607528 kato
kato's picture

so glad the SEC et all are on teh case

Mon, 09/27/2010 - 13:40 | 607529 cat2
cat2's picture

You gotta admit this is funny stuff.  Who can trust this market?  And the rollbacks are totally bogus and for the benefit of the bankers/wall street.  A game so rigged it's just funny.

Mon, 09/27/2010 - 14:02 | 607627 EscapeKey
EscapeKey's picture

A part of me thinks it's funny. A part of me thinks it's tragic. And a part of me gets really angry about this.

The markets USED to be a place, where you could count on, say, AMD being downgraded would lead to a 5% drop in stock value. These days, it will drop by 2%, before all HFT algorithms jump on this great Intel-AMD arbitrage opportunity, and bring them back into equilibrium, followed by the arbitrage opportunity between Intel-Microsoft, etc, and within a second the entire maket has adjusted.

But the computers are here to stay.

Mon, 09/27/2010 - 15:54 | 608019 Miramanee
Miramanee's picture

This is the logical extension of a system that must "grow" lest all he'll breaks loose. Growth becomes a charade, a farce, a crime, a fraud...and the PTB pull out every stop in the propaganda wars to keep growth alive!! That is why, eventually, we will see the outbreak of real, guns and bombs war vis this stuff. better to destroy another persons country than allow your own to be eaten alive by civil strife. We are a cosmic joke, we humans.

Mon, 09/27/2010 - 15:21 | 607897 Rick64
Rick64's picture

 It almost seems like they are honing their skills from causing flash crashes to a gradual slide where it would be unrecognizeable.

Mon, 09/27/2010 - 13:41 | 607537 Cognitive Dissonance
Cognitive Dissonance's picture

It looks like something you see on the Cartoon Network or in a Three Stooges episode. Someone steps into a very deep hole, quickly pulls himself out, brushes off some dirt and grass and then continues walking as if nothing happened at all.

Whoopsie daisy. Move along, nothing to see here.

Mon, 09/27/2010 - 14:01 | 607625 nopat
nopat's picture

I was going to say Wile E. Coyote, but to each his own.

Mon, 09/27/2010 - 14:11 | 607651 Cognitive Dissonance
Cognitive Dissonance's picture

Poor Wile E has been taking so much shit from the Road Runner all these years that I didn't have the heart to pile on. :>)

Mon, 09/27/2010 - 14:48 | 607761 EscapeKey
EscapeKey's picture

I always thought Road Runner was bit of a prick.

Mon, 09/27/2010 - 15:05 | 607824 Almost Solvent
Almost Solvent's picture

And so is Time Warner. Home of unreliable Road Runner internet access and glitchy cable boxes that seem to freeze frames and reset automatically while I'm trying to surf the web or watch something on TeeVee.

 

FU TWC!

Mon, 09/27/2010 - 14:44 | 607753 DaddyWarbucks
DaddyWarbucks's picture

Let's get our scripts right people. All you retail investors will be wearing the flammable coyote costumes and all you insiders will be wearing the nomex road runner costumes. Ready everyone? Take 312, lights, cameras, action!

Here's a thought. I read the phrase price discovery, what if the "real" price is at the bottom of that chasm?

 

Mon, 09/27/2010 - 14:46 | 607756 DaddyWarbucks
DaddyWarbucks's picture

Sorry, my fingers have been a little fat since they got caught in the HFT vice.

Mon, 09/27/2010 - 15:22 | 607902 doggis
doggis's picture

you also get 'fat' fingers from drinking too much booze....... can we do a liver scan on you daddy??

Tue, 04/26/2011 - 13:54 | 1208386 william.smith61
william.smith61's picture

Air Mass Meter The fact that they don't tells you their economy (and by extension their control structure) is hanging on by a bees dick as well

Mon, 09/27/2010 - 13:42 | 607538 Turd Ferguson
Turd Ferguson's picture

I just think its bullshit that the NYSE steps in and DKs these trades. 

Make the trades stick and maybe this shit will stop happening so frequently.

Mon, 09/27/2010 - 13:43 | 607544 MsCreant
MsCreant's picture

It's just another variation on rewarding failure.

Mon, 09/27/2010 - 13:49 | 607569 cat2
cat2's picture

Privatize earnings, socialize (to the retail traders) losses/failure.

It's the new american crony capitalism way.

IMO, they should be sued.

Mon, 09/27/2010 - 13:58 | 607611 MarketTruth
MarketTruth's picture

Agreed they should be sued, and starting with the Federal Reserve is as good a place as any. Of course people who sue the wrong people get a sudden case of a heart attack, their plane crashes, they commit suicide drowning while locked inside a duffle bag...

Or you hang yourself, like the DC Madam who had plenty of hooker/escort evidence against various high ranking officials in Washington.

Mon, 09/27/2010 - 13:59 | 607613 lizzy36
lizzy36's picture

It is the only solution.

Further is has the additional effect of telling market players that the SEC cannot (and does not) protect investors and/or maintain market integrity.

Alas, one cannot justify a $1B taxpayer funded budget AND a caveat emptor stance. 

Mon, 09/27/2010 - 15:10 | 607845 Almost Solvent
Almost Solvent's picture

Nice to look at

Lovely to hold

But if you break it

Consider it sold

 

They broke the market, now they own the market, they just used taxpayer funds to complete the purchase.

Mon, 09/27/2010 - 15:15 | 607863 wintermute
wintermute's picture

100%.

This is another facet of moral hazard. Just as TBTF bankrupt banks get their failure rewarded with bailouts - the HFT owners get failure rewarded with DK'd trades.

The buyer at $4 MUST be punished for their computerized stupidity - or FLASH CRASHES WILL KEEP HAPPENING.

SEC - why do you pretend this can just continue?

Mon, 09/27/2010 - 13:42 | 607542 MsCreant
MsCreant's picture

I like those two fangs up before the gradual cliff slope. Malfunction junction.

Mon, 09/27/2010 - 13:56 | 607595 hedgeless_horseman
hedgeless_horseman's picture

Those were Leo's and Harry's market-long orders.

Mon, 09/27/2010 - 14:17 | 607673 MilleniumJane
MilleniumJane's picture

Yeah, like yo-yo tricks...Shoot the Moon!   Shoot the Moon!   Walk the dog...

Mon, 09/27/2010 - 16:42 | 608156 TraderTimm
TraderTimm's picture

Those were probably "oh shit, someone might hit us" bid-swerves before the HFT cruise missile did a through-the-bunker-window market hit.

This isn't a market, its pong crossed with an etch-a-sketch.

Mon, 09/27/2010 - 13:43 | 607545 samseau
samseau's picture

so how do all the bulls and anti-collapse people rationalize shit like this?

Mon, 09/27/2010 - 16:53 | 608194 Mentaliusanything
Mentaliusanything's picture

Valium ?

Mon, 09/27/2010 - 13:44 | 607546 Cincitucky
Cincitucky's picture

HFT programmers obviously forgot to wrap the algorithms with the try{} catch (Exception ex){MessageBox.Show("Computation Failure");}

Mon, 09/27/2010 - 15:30 | 607931 SoCalBusted
SoCalBusted's picture

These events make me wonder if GC kicked in during a critical section of the code.

Mon, 09/27/2010 - 13:45 | 607550 The Rogue Trader
The Rogue Trader's picture

Agree Turd....Make the trades stick....

Mon, 09/27/2010 - 13:45 | 607552 bigdumbnugly
bigdumbnugly's picture

of course if this was your clothes dryer overloading the breaker like this you'd have real issues. 

but here your buy just gets Servpro'd... like it never happened.

Mon, 09/27/2010 - 13:46 | 607556 MsCreant
MsCreant's picture

Did flash crashes happen before HFT?

Mon, 09/27/2010 - 13:52 | 607577 Careless Whisper
Careless Whisper's picture

they used to take 16 minutes and got you 44 months in jail:

http://en.wikipedia.org/wiki/Emulex_hoax

 

Mon, 09/27/2010 - 15:30 | 607929 MsCreant
MsCreant's picture

Thanks Careless!

Mon, 09/27/2010 - 13:48 | 607564 Hondo
Hondo's picture

What would you expect from a corrupted market run by corrupted regulators working for corrupted investors.  I'm out, will be out and I really don't care where the markets goes from here...hell preferably

Mon, 09/27/2010 - 13:48 | 607565 AccreditedEYE
AccreditedEYE's picture

Broken market? What broken market? LOL! Investors keep ignoring these tremors at their own risk....

Mon, 09/27/2010 - 14:17 | 607672 bigdumbnugly
bigdumbnugly's picture

broken market?  it sounds fixed to me   haha.

Mon, 09/27/2010 - 14:19 | 607679 AccreditedEYE
AccreditedEYE's picture

+1

Mon, 09/27/2010 - 14:35 | 607722 MsCreant
MsCreant's picture

cute!

Mon, 09/27/2010 - 13:49 | 607568 hugolp
hugolp's picture

I know this is going to sound naive, but why does the Nasdaq protect the HFT and does not force them to suffer the loses they should?

 

Its probably because it gest more money, but its going to kill it long term.

Mon, 09/27/2010 - 13:54 | 607586 cat2
cat2's picture

I think you are right, I think HFT actually makes the exchange money (in transaction fees).  When HFT frontrun loops a single retail trade into 10 trades, I think the exchange makes more money, but not sure.  They wouldn't allow it if it didn't make them money too.  But it's the same ole' baby boomer short sightedness, they forget that if you outsource everything, screw the customer too much your long term biz will die.  But who cares, "I got MINE".  (baby boomer motto)

Mon, 09/27/2010 - 14:02 | 607588 lizzy36
lizzy36's picture

Exactly.

They will cannibalize one another. In the absence of any actual structural reform (seriously lol) it is the best outcome.

The USA is plagued by short term election cycle thinking. It will eventually cannibalize the country.

Mon, 09/27/2010 - 14:16 | 607663 nopat
nopat's picture

The election cycle has little to do with it (IMO, at least).  It's the pervasive (perverse?) nature of politics in today's society and the supreme guiding torch of "fairness" as a religion that a majority of the population subscribes to.  Information tech has given a lot of people with little idea how the world actually works a conduit to organize and enact change.  There's a reason the founding fathers limited governing responsibilities to the [largely] independantly wealthy.  If I'm guilty of historical revisionism...fuck it, then the founding fathers should have.

Case in point - I go to my HOA meeting, purely informational, they're re-paving our streets and want to let us know the schedule and that, if in the event we decide to get brazen and remove the barricades to our streets, not only will we be fined $500, but we will also have to pay out-of-pocket the expense to repave that section.  Straight forward?  The shitshow of American politics on a micro scale started in with the "did you not feel it important to include us in the decision-making process" briggade, followed closely with a scruitiny of the sealed-bid, and then finished off Peter North style straight to the face with a complete lack of understanding that repaving costs $200k, re-sealing will accomplish a similar task for only $22k, will be paid-in-full this year and allow the Treasury to grow $55k for other miscellaneous expenses (like the woefully-inadequate gate system) all without causing HOA dues to increase.

The internet needs to go back to being the pure bastion of porn of my formative years it once was; if there's one thing that's going to destroy us, it's our complete inability to grasp that some people shouldn't have a voice.  At all.

Mon, 09/27/2010 - 14:38 | 607728 Vergeltung
Vergeltung's picture

how very democratic of you!

Mon, 09/27/2010 - 15:06 | 607829 lizzy36
lizzy36's picture

"the greatest argument against democracy:5 minutes with the average voter."

Mon, 09/27/2010 - 20:32 | 608635 StychoKiller
StychoKiller's picture

"Do not blame Caesar, blame the people of Rome who have so enthusiastically
acclaimed and adored him and rejoiced in their loss of freedom and danced in
his path and gave him triumphal processions. ... Blame the people who hail
him when he speaks in the Forum of the 'new, wonderful good society' which
shall now be Rome's, interpreted to mean 'more money, more ease, more security, more living fatly at the expense of the industrious.'" -
Roman statesman Marcus Tullius Cicero (106-43 B.C.)

Mon, 09/27/2010 - 13:50 | 607574 RobotTrader
RobotTrader's picture

Looks like the world record bid to cover on the 2 years today is spawning yet another "Animal Spirits" dash for trash run today.

Mon, 09/27/2010 - 15:11 | 607633 AccreditedEYE
AccreditedEYE's picture

Leo's gonna be upset you called his LDK "trash". We'll see how long this hockey stick extends Robo. Up is beginning to be too obvious IMHO.

P.S.- SOX ain't breaking out yet...

Mon, 09/27/2010 - 14:16 | 607667 duo
duo's picture

Maybe I should put out some GTC bids for gold and silver miners at 10% of today's price.  Could get filled if the computers try to crash one or more  of them.

Mon, 09/27/2010 - 13:50 | 607575 firstdivision
firstdivision's picture

have no fear, the market is almost green.  smooth sailing and ice cream for everyone by EOD.

Mon, 09/27/2010 - 14:03 | 607629 HarryWanger
HarryWanger's picture

We'd have it no other way. Remember we had "great" data Friday and everyone is still high on the double dip off the table and green pastures ahead.

Mon, 09/27/2010 - 13:52 | 607580 themosmitsos
themosmitsos's picture

Dry Run Bitchezzz

Strap it on ;)

Mon, 09/27/2010 - 13:54 | 607585 fat tony slim
fat tony slim's picture

desperate times call for desperate measures

Mon, 09/27/2010 - 13:55 | 607591 The Axe
The Axe's picture

Just Retard squared....

Mon, 09/27/2010 - 13:55 | 607592 Jack Ryan
Jack Ryan's picture

Thank you for posting these!!!  I sincerely, hope someone listens out there (at a regulator) because this kind of trading is going to destroy the business. 

Mon, 09/27/2010 - 14:00 | 607621 truont
truont's picture

The regulators are well aware, as they are complicit in HFT.

But don't worry, they are doing "God's work".

Mon, 09/27/2010 - 13:58 | 607609 lsd
lsd's picture

ex airforce officers briefing on ufo on cnn

Mon, 09/27/2010 - 15:51 | 608006 Arkadaba
Mon, 09/27/2010 - 14:00 | 607623 Clark_Griswold ...
Clark_Griswold Hedge Mnger's picture

How many algo flash crashes is that in the last 30 days?

It is just such a sad state when main street is expected to be in a perpetual state of "Bend Over", so wall street can let you have another;

I am all but out with the exception of long metals, but this is in all seriousness, just insane, to have this going on day in day out, not even trying to hide it, and 95% of the folks out there still in la la land.

You guys know what I mean?

I'm gona have to break out the moose mugs early and have a shot.

Mon, 09/27/2010 - 14:02 | 607626 Everyman
Everyman's picture

Who wants to play or "invest" in this market?  NOBODY!

The only reality the market index increase in "value" indicates is the devaluation of currency.  That is it.  The TA, market and economic fundamentals do not come into play when stock price is compared to the valuation of currency.

That is why and how flash crashes and HFT are tolerated.

Somebody is gonna get beat badly if this crap does not stop. 

Mon, 09/27/2010 - 14:05 | 607634 fat tony slim
fat tony slim's picture

this will go on until something of greater force knocks it off course. lot of complacency and comfort for those making $$$ from the process. the deception, disguise, and the complexity of the scheme will require SPECIFIC TARGETED LIGHT BEAMED upon the KEY participants. Bring a can of RAID and spray the roaches before they scatter. Until then, the infestation will grow until it spirals to even greater heights making DOW 50,000 a reality.  

Mon, 09/27/2010 - 14:07 | 607639 wiskeyrunner
wiskeyrunner's picture

Two day 4 point SPY range truly amazing.

Mon, 09/27/2010 - 14:07 | 607641 reddragonleo
reddragonleo's picture

How about this print on the daily chart today?

http://reddragonleo.com/wp-content/uploads/2010/09/fake-print-RIFIN-of-4...

It never happened though... but is it a sign of what's to come?

Mon, 09/27/2010 - 14:07 | 607642 molecool
molecool's picture

I feel dirty to quote that nincompoop Palin:

How's all that hope and change working out for ya?

Nobody will get sued for raping and pillaging the financial system - the elite knows the 'end game' is upon us and the fat rats are grabbing whatever isn't nailed down and are leaving the ship.

Math question: Six times __________ equals 174. Is this supposed to be a joke? Who do you think I am - f...ing Einstein? ;-)

Mon, 09/27/2010 - 14:12 | 607657 fat tony slim
fat tony slim's picture

answer: 29

Mon, 09/27/2010 - 14:20 | 607678 molecool
molecool's picture

LOL - how do you think I posted this? ;-)

Mon, 09/27/2010 - 14:48 | 607764 Iam_Silverman
Iam_Silverman's picture

"LOL - how do you think I posted this?"

 

By posting the same question on another board, cut-and-paste the answer?

Mon, 09/27/2010 - 15:27 | 607919 fat tony slim
fat tony slim's picture

yes that would be true. i am just glad the Einstein matter has now been cleared up.

Mon, 09/27/2010 - 14:13 | 607661 MrTrader
MrTrader's picture

What a joke of an exchange system.

Mon, 09/27/2010 - 14:15 | 607668 bada boom
bada boom's picture

Munger said to quit your bitching.  This is for the good of everyone.

Mon, 09/27/2010 - 14:23 | 607683 jal
jal's picture

What was the volume during that "crash"?

Would all of the stops have been sold to a buyer?

Are they systematically forcing the stops out of the market at a loss?

Gee! If I was the "right friend" would they let me keep my stock by not letting the sale happen?

 

jal 

Mon, 09/27/2010 - 14:22 | 607685 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

In China someone would have taken a bullet for this.

That would only be true if it was a nonParty leader making money.

Mon, 09/27/2010 - 14:28 | 607695 cougar_w
cougar_w's picture

This whole business is fascinating. You could have these things happening every few seconds, with 50-100ms durations, and have a completely different kind of "investment" strategy driving the market and not a human anywhere in evidence.

This is more like FX arbitrage than anything else. That might even make a grim sort of sense actually; companies that don't create anything any more acting as a new fiat currency in the age when all fiat value finally dies.

Someone else remember to turn off the lights on the way out, 'cuz I'm leaving early.

Mon, 09/27/2010 - 14:30 | 607710 Cognitive Dissonance
Cognitive Dissonance's picture

Someone else remember to turn off the lights on the way out, 'cuz I'm leaving early.

The question isn't if you're leaving early but where are you going early. You must be going somewhere if you're leaving somewhere else.

Mon, 09/27/2010 - 15:14 | 607873 cougar_w
cougar_w's picture

Well you see I ... I mean there is ... oh hell, you're right. No clue.

I'm leaving and then I think I'm wandering for a while. No destination, it's all about the journey. The destination will need to find me this time around.

See you on the other side. I guess.

Mon, 09/27/2010 - 15:50 | 607947 Cognitive Dissonance
Cognitive Dissonance's picture

So I assume you're looking for a road map as well? I hear Rand McNally does a good job. Or you can follow me down the Ayahuasca or DMT path.

No worries about parasitic bed bugs that might bite and eye watering mildewed rugs that keep you up all night . :>)

http://en.wikipedia.org/wiki/Dimethyltryptamine

http://en.wikipedia.org/wiki/Ayahuasca

Mon, 09/27/2010 - 15:24 | 607909 PlausibleDenial
PlausibleDenial's picture

Or, "How can you be in two places at once, when you are no place at all"

 

Mon, 09/27/2010 - 15:37 | 607954 cougar_w
cougar_w's picture

Oh come on. That's an old cat trick. A bunch of guys who couldn't find their cats at supper time had to derive quantum physics just to deal with their cats being in two places at once and yet never in the right place when you need them to be.

It's all about the journey baby because when you always end up in several different destinations at the same time anyway you start to realize that none of those places matter for shyte.

Mon, 09/27/2010 - 19:28 | 608524 kathy.chamberli...
kathy.chamberlin@gmail.com's picture

oh, i like p u s s y   cats.

thanks TD, ready to rumble again.

Mon, 09/27/2010 - 15:39 | 607961 fat tony slim
fat tony slim's picture

Someone else remember to turn off the lights on the way out,

we can write an AI program to handle that. humans no longer needed.

now just imagine what would happen if a virus would find it's way into the AI and change the AI instructions.

that would be like lighting a fuse and watching the entire thing melt.

This game is throttled every day, so that selling gets proper buying support. flash crash is just what the tape would really look like when the AI system is not working. it was a PROBE to see how things might naturally go.

nevertheless...AI or not, rest assured no government is going to change or alter the market, if it could it would have prevented the 2008 massive price decline.

the name of this game is to make money...so get busy and stop complaining. it is those who complain that are evidence they are not making money or dont know how.

maybe the market is not broken. maybe your method is. ZH puts out the information source, the key is how you put it all together.

Mon, 09/27/2010 - 14:33 | 607720 Hephasteus
Hephasteus's picture

Market showin it's ass on a regular basis now. Boomers will be stripping coin shops clean much more of this.

Mon, 09/27/2010 - 19:29 | 608529 kathy.chamberli...
kathy.chamberlin@gmail.com's picture

from a boomer, be careful of coin shops. some, not so honest. direct experience.

Mon, 09/27/2010 - 14:36 | 607725 Johnk
Johnk's picture

What's the Elliott Wave count on that chart?

Mon, 09/27/2010 - 15:44 | 607982 fat tony slim
fat tony slim's picture

Wave C

Wave 1

Wave 2 nearing completion on a compressed flat and may be completing part "e"

It's completion marks the start of a Wave 3

expect lots of irractic movements reversals, spikes higher, maybe 1155-1170

this is wave 1 of 5 in the down move of C, where prices would be expected to fall below 666.

the market decides in the end...

Mon, 09/27/2010 - 19:13 | 608502 Bartanist
Bartanist's picture

Only if someone turns off the Fed and its HFT cohorts... so maybe this time IS different.

Mon, 09/27/2010 - 14:38 | 607730 Sokhmate
Sokhmate's picture

I think this would be funnier if it happened to amazon, apple, microsoft, oracle and the like. Or do you think those have their own algos or running on superceding contortors?

Mon, 09/27/2010 - 15:51 | 608007 cougar_w
cougar_w's picture

It probably happens with Apple etc all the time. Citi is apparently a favorite. However there are still so many humans and non-HFT-program-traders on those names that these high-speed trigger-happy algos don't get to play with each other in their own little sandbox. When they do get to play, you see what happens. There is probably some threshold of human involvement (ie adult supervision) below which the algos peg off each other in the downward and exponentially drive something into the ground. It's like when the banks were keeping the rounding errors to themselves, and pocketing $millions a day on transactional noise; it only works well if everybody is playing and nobody notices.

The situation where there are few (any?) flash-spikes upward suggests that the algos are coded as "bears", and are all waiting for the day when they pay for themselves helping the wheels to come off. I guess that's because humans can trade up days fine, only a machine can ride the markets into annihilation.

Mon, 09/27/2010 - 14:39 | 607736 What_Me_Worry
What_Me_Worry's picture

A millisecond lasts a lot longer than it used to.

Mon, 09/27/2010 - 16:20 | 608084 cougar_w
cougar_w's picture

Nice.

But you know what it's not how long the time frame, it's how many additional slices you can get out of it. They are slicing milliseconds now and getting as many slices from that as they used to get from entire minutes. I imagine they can now run as many automated trades in a second as unaided humans could at one time do in a day. Or maybe a week.

Mon, 09/27/2010 - 17:33 | 608284 TJ_is_annoyed
TJ_is_annoyed's picture

Well, a cpu running at 3 Ghz (pretty common today) can execute a simple instruction in 1/3 of a nanosecond (3 BILLION instructions per second).  Now that's not to say that 3 billion quotes are created per second, but you get the picture. That's fast enough to stuff a million quotes a second and still have plenty of time create several trillion in fiat (all before you could move a finger to click the sell button).

Excellent reading for the technical leaning people: http://duartes.org/gustavo/blog/post/what-your-computer-does-while-you-wait

Mon, 09/27/2010 - 18:14 | 608400 NumberNone
NumberNone's picture

Wait until trading is run on Quantum Computers...you POS carbon based life forms will be useless.

http://www.zdnet.co.uk/blogs/qubits-and-pieces-10017876/two-photon-quantum-walk-puts-real-quantum-computers-within-reach-10018685/ 

Mon, 09/27/2010 - 19:31 | 608533 kathy.chamberli...
kathy.chamberlin@gmail.com's picture

milliseconds are now the new trillions.

Mon, 09/27/2010 - 14:41 | 607743 Overpowered By Funk
Overpowered By Funk's picture

Get ready for the late day manipulations. Never disappointing - always on que.

Mon, 09/27/2010 - 14:43 | 607751 Ancona
Ancona's picture

This is precisely why no one working for any regulator may work in the industry they regulated for fifteen years after leaving said regulator position.

Mon, 09/27/2010 - 15:21 | 607754 CitizenPete
CitizenPete's picture

How in hell do they continue to get away with this bullshit?  Where the Fk are the "cops".  Is everyone at the SEC watching porn all day?

 

http://www.youtube.com/watch?v=2fvimphEeN4&feature=related

Mon, 09/27/2010 - 14:51 | 607775 Iam_Silverman
Iam_Silverman's picture

Ouch!

I used to work for Progress Energy, back when they were CP&L.  I know that a lot of my ex-coworkers are puckered up over their 401K's when this kind of stuff materially effects them.  Our end of year bonus was typically paid into our 401K with stock.

The company I now work for is no longer listed - we were scooped up by KKR/TPG/Squid in what was then the largest PE "Deal of the Day".

Mon, 09/27/2010 - 14:59 | 607794 Threeggg
Threeggg's picture

Looks like the tripped circuit breakers needed to be reset 3 times according to the chart.

You know that circuit breakers get

"Tripped Out" 

if they are activated and reset too many times.

Just sayin

Mon, 09/27/2010 - 15:05 | 607817 bada boom
bada boom's picture

Just ignore those pesky alarms like at Chernobyl.

Mon, 09/27/2010 - 15:05 | 607820 johngaltfla
johngaltfla's picture

Oh those fat guys and their donut laden fingers.....

Mon, 09/27/2010 - 15:05 | 607825 cocoablini
cocoablini's picture

So is NasDaq canceling orders from the bottom?
Let's look at this from the other angle, if the HFT computer can crash a stock and YOU KNOW ITS GOING TO HAPPEN then your stink bids would work right?
The big flash crash honored any trade within 60% of the bottom or something like that. It was arbitrary and nonsense.
If the market crashed all bids should be honored. If the bots broke, then NO bids should be honored.
These just looks like probing crashes to see how fast they can scoop stock out of weak hands or flash limit orders.
Does anybody know what the cancellation policy is for this?

Mon, 09/27/2010 - 15:06 | 607832 TheGreatPonzi
TheGreatPonzi's picture

Tyler, I love when you tell loud what everybody thinks. Keep this angry tone.

Mon, 09/27/2010 - 15:11 | 607854 Jonas Parker
Jonas Parker's picture

Karl Denninger over on Market Ticker has this story too... Maybe the word is finally getting out...

Mon, 09/27/2010 - 15:23 | 607887 Threeggg
Threeggg's picture

Anybody following the Fox Business channel ?

It's a riot - everyone is running around some oil riggs in the Gulf trying to figure out "Why" the deep water drilling ban is effecting shallow water drilling for oil and gas.

Simple:

The economies of the world are in a depression and are not buying energy in the volumes we need to maintain "it's" price.

Every oil & gas related storage, pipeline, silo and supertanker is filled to the "Brim" with supply and there is no demand.

Shut down the production and the price will rise. (they hope)

I expect the "Black Swanski" any day now.

Man made shaker in Cali (using the harpster) is my guess whats yours. ?

 

Mon, 09/27/2010 - 15:28 | 607914 cougar_w
cougar_w's picture

They don't need a real crisis. They can make one up.

The government-controlled media could "report" an Iranian frigate firing on a tanker in the Strait of Hormuz -- provide no footage or the names of ships or anything -- and you'd have a price run-up that would make your heart stop. And the price would stay up even after they did their "opps our bad" thing after the close of markets.

Mon, 09/27/2010 - 15:41 | 607963 MsCreant
MsCreant's picture

How about the aliens we are reading about in the presses here and in UK?

http://www.google.com/hostednews/ukpress/article/ALeqM5iwmhZTU4H8fteXw-s-Eg5ULVyzkw

http://www.telegraph.co.uk/news/newstopics/howaboutthat/ufo/8026971/Aliens-have-deactivated-British-and-US-nuclear-missiles-say-US-military-pilots.html

http://www.tgdaily.com/unbalanced/51733-aliens-interfering-with-nukes-say-air-force-officers

What happens to the price of oil if the Aliens are messing with our nukes?

What happens to Gold if they can prove it?

Stocks?

The aliens, the aliens. 

Back to Big Brother Dancing with the American Idols.

Mon, 09/27/2010 - 15:50 | 607992 Cognitive Dissonance
Cognitive Dissonance's picture

Once one starts down the path of decoding myths, half truths and lies, one must perform a full stop at the alien meme. This has got to be the longest running disinformation campaign, complete with predictive programming courtesy of our friendly mainstream media, since the Bible story.

So, are we being set up for the greatest snow job humanity has ever seen? Or are we being primed for Disclosure, either big "D" or little "d"? How agreeable would the average Joe have been to aliens next door 60 years ago as opposed to today after decades of indoctrination, programming and "fictional" stories? What exactly is NBC's "Event"?

Name your senator. Now name that cute alien with the glowing finger who rides the bicycle. I'd say we've come along nicely, don't you? First black President, first alien next door. I always thought he was a little strange. And she's hot in a strange way. Alien porn is next folks. Count on it.

Mon, 09/27/2010 - 20:16 | 608601 Iam_Silverman
Iam_Silverman's picture

"First black President"

 

Dang it CD, he aint black, he's a mulatto!

Mon, 09/27/2010 - 15:50 | 608002 fat tony slim
fat tony slim's picture

aliens make for a fine distraction for us to forget how bad things are. Also it helps make a case that our government military can save us and we need to listen to them and pay our taxes as the masses fear an alien takeover.

hey...if aliens want to disarm nukes, go right ahead, i just they got them all. kinda suck if US gets disarmed and not Iran. oh yeah the worm got that one...yeah right.

citizens hand over your guns and knives so you dont start hurting people...argh.

Mon, 09/27/2010 - 16:01 | 608034 cougar_w
cougar_w's picture

All of which means that you can make a significant portion of the population afraid of just about anything, including something utterly impossible.

Last time around it was supernatural witches. Served TPTB just fine, thank you.

Oh, and I think this whole celebration of the vampiric undead is verging on a death cult of some kind, convincing people once again that there really is life after death. It's okay, son. Go ahead, die

And they say that mind-altering drugs are illegal? Almost everyone I meet is walking around mind-altered.

Gives me the creeps.

Mon, 09/27/2010 - 16:32 | 608133 Cognitive Dissonance
Cognitive Dissonance's picture

......including something utterly impossible.

Careful my friend. Speaking in absolutes will singe your fur and get you anally probed. Not that either one is a bad thing.

And they say that mind-altering drugs are illegal? Almost everyone I meet is walking around mind-altered.

Being mind altered implies that there is a starting point, a basis, a real reality. We are all mind altered by way of a life time of indoctrination and programming, beginning with blue for boys, pink for girls and green for cougars.

Mon, 09/27/2010 - 19:43 | 608567 kathy.chamberli...
kathy.chamberlin@gmail.com's picture

i say, every one i see, is  o u t    to    l u n c h.

Mon, 09/27/2010 - 20:17 | 608604 Iam_Silverman
Iam_Silverman's picture

Hey!  Are you  Velobabe, reborn?

Mon, 09/27/2010 - 20:41 | 608656 kathy.chamberli...
kathy.chamberlin@gmail.com's picture

no reborn, velobabe was another life. i am still Velobabe in spirit.

Mon, 09/27/2010 - 19:33 | 608540 Minion
Minion's picture

Once it breaks that aliens can transmute lead into gold and generate unlimited amounts of power with zero point energy, both gold and oil will collapse......

Mon, 09/27/2010 - 20:18 | 608607 Iam_Silverman
Iam_Silverman's picture

Or, they'll be selected as the new members of the Federal Reserve?

Mon, 09/27/2010 - 20:48 | 608669 StychoKiller
StychoKiller's picture

Kang:  "Get your slimeless hands off (those markets) her!"

Mon, 09/27/2010 - 15:39 | 607965 Cognitive Dissonance
Cognitive Dissonance's picture

Who needs reality when TV fantasy will do?

Woman: "Hey, if they said it on TeeVee it must be true. After all, no one would lie that big in public and on TeeVee. Right?"

Man 2: "Maybe I need to introduce you to my sociopath brother in law. He's go a few whoppers he'd like to include you in on. Bring your checkbook, OK?" :>)

Mon, 09/27/2010 - 20:19 | 608609 Iam_Silverman
Iam_Silverman's picture

"Who needs reality when TV fantasy will do?"

 

Or my favorite: "Well, Wikipedia says....".

Mon, 09/27/2010 - 20:48 | 608672 StychoKiller
StychoKiller's picture

Obamatron:  "No more bank bailouts." (until there is one!)

Mon, 09/27/2010 - 15:39 | 607962 Spigot
Spigot's picture

So setting GTC orders 60-70% below current pricing and waiting for one of these robo-bots to crash the price down my end up netting some $cha-ching if the SEC overlooks removing these orders? Can I hear an "AMEN!!" out there!

Mon, 09/27/2010 - 15:52 | 608011 fat tony slim
fat tony slim's picture

you wont get filled, and if you do, it will stay down.

Mon, 09/27/2010 - 15:40 | 607966 JLee2027
JLee2027's picture

We're going to wake up one day and DOW will open at about 10. Not 10,000. TEN. And it will stay there.

Mon, 09/27/2010 - 16:42 | 608157 willien1derland
willien1derland's picture

They should let the trades STAND as is, where is - absolutel nonsense - there are NO 'DO OVERS' in FREE MARKET CAPITALISM!

Mon, 09/27/2010 - 19:21 | 608513 BeSosaNotTony
BeSosaNotTony's picture

>implying this resembles anything remotely close to a free market

>implying having machines obliterate and resurrect share prices according to some idiotically contrived algo adheres to capitalistic notions of fairness, accountability, or being rewarded for productivity

 

I'm sure you're taking the piss, b/c if you weren't you probably wouldn't be here. Then again, I've been surprised here before. Where is this on the news? Why isn't this being publicized to high heaven? This is a gross failure of supervision, of compliance, of competence; albeit on a smaller scale than what we had earlier this year. 

Mon, 09/27/2010 - 21:29 | 608752 rickardswhite
rickardswhite's picture

The fractal nature of markets says if it exists on the nanosecond or milisecond scale IT WILL MANIFEST on the minute, hourly and daily scales!!

 

Coming soon....1minute HFT crop circle charts...

Mon, 09/27/2010 - 21:32 | 608760 kathy.chamberli...
kathy.chamberlin@gmail.com's picture

GOT ya†

Tue, 09/28/2010 - 02:29 | 609248 Grand Supercycle
Grand Supercycle's picture

S&P 500 FINANCIALS INDEX - an important chart:

http://stockmarket618.wordpress.com

Tue, 11/16/2010 - 10:59 | 730708 daniel
daniel's picture

i love zerohedge policy cheap hosting

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