The Day The Market Almost Died (Courtesy Of High Frequency Trading)

A year ago, before anyone aside from a hundred or so people had ever heard the words High Frequency Trading, Flash orders, Predatory algorithms, Sigma X, Sonar, Market topology, Liquidity providers, Supplementary Liquidity Providers, and many variations on these, Zero Hedge embarked upon a path to warn and hopefully prevent a full-blown market meltdown. On April 10, 2009, in a piece titled "The Incredibly Shrinking Market Liquidity, Or The Black Swan Of Black Swans" we cautioned "what happens in a world where the very core of the capital markets
system is gradually deleveraging to a point where maintaining a liquid
and orderly market becomes impossible: large swings on low volume,
massive bid-offer spreads, huge trading costs, inability to clear and
numerous failed trades. When the quant deleveraging finally catches up
with the market, the consequences will likely be unprecedented, with
dramatic dislocations leading the market both higher and lower on
record volatility." Today, after over a year of seemingly ceaseless heckling and jeering by numerous self-proclaimed experts and industry lobbyists, we are vindicated. We enjoy being heckled - we got a lot of it when we started discussing Goldman Sachs in early 2009. Look where that ended. Today, we have reached an apex in our quest to prevent the HFT "Black Monday" juggernaut, as absent the last minute intervention of still unknown powers, the market, for all intents and purposes, broke. Liquidity disappeared. What happened today was no fat finger, it was no panic selling by one major account: it was simply the impact of everyone in the HFT community going from port to starboard on the boat, at precisely the same time. And in doing so, these very actors, who in over a year have been complaining they are unfairly targeted because all they do is "provide liquidity", did anything but what they claim is their sworn duty. In fact, as Dennis Dick shows (see below) they were aggressive takers of liquidity at the peak of the meltdown, exacerbating the Dow drop as it slid 1000 points intraday. It is time for the SEC to do its job and not only ban flash trading as it said it would almost a year ago, but get rid of all the predatory aspects of high frequency trading, which are pretty much all of them. In 20 minutes the market showed that it is as broken as it was at the nadir of the market crash. Through its inactivity to investigate the market structure, the SEC has made things a million times worse, as HFT-trading seminars for idiots are now rampant. HFT killed over 12 months of hard fought propaganda by the likes of CNBC  which has valiantly tried to restore faith in our broken capital markets. They have now failed in that task too. After today investors will have little if any faith left in the US stocks, assuming they had any to begin with. We need to purge the equity market structure of all liquidity-taking parasitic players. We must start today with High Frequency Trading.

Further to demonstrate this point, we bring our readers attention to our post from April 1, 2009 titled An Open Letter To Quant Funds. In it we said:

In his April 14th report Matt Rothman wrote about a dramatic,
parabolic outperformance trend for names with high short interest, low
prices and fundamentally weak names. He opined that all conditions for
this trend to end are in place. Contrary to his very valid arguments,
the trend accelerated yesterday.

Stocks with poor fundamentals,
market share losses and poor earning prospects that quantitative
managers tend to short, gained more than higher quality long positions.

It
is clear from Mr. Rothman's report that this trend is a main
contributor to outsized losses for quant managers. Some of his
respondents admitted to hitting P&L stops. Recent
acceleration of this trend, aka the "crap rally" clearly further
damaged quantitative managers performance and resulted in further hits
of P&L stops. The resulting short covering and long index hedges
have perpetuated the market rally for now.

At this point, it is hard to say what set off this process, but it is currently accelerating and feeding on itself.

From
the timing of Mr. Rothman's poll of quant managers, it is clear that
smaller managers had ample time to exit positions and get flat.
Continuation of the "crap rally" could indicate larger, systematic problems at the largest, most sophisticated quant managers.

We
are paging Jim Simmons, DE Shaw, Citadel, LSV, Jacobs Levy and
"significant"' others. Are you all right? We need you alive, small and
nimble, to help provide liquidity and maintain orderly markets, not outsized, bigger than the market and dead.

If you still can, please come out and speak up before it is too late.

Today, it was too late. Liquidity disappeared.

And now we have to deal with the consequences. One amateurish way is to cancel trades which is what the Nasdaq is doing. This is simply pathetic, and indicates that everyone is powerless to stand before the consolidated idiocy of the HFT "cash cows."

One person who does get it is Senator Kaufman, who should be a shining example to all the other idiots and traitors in both Congress and Senate. Senator Kaufman issued the following release:

“As I said on the Senate floor today, the growing sovereign debt and banking crisis in Europe is very troubling.  The U.S. needs to get its financial house in order through strong Wall Street reforms that will serve as a lasting bulwark against financial instability.

“I also have been warning for months that our regulators need to better understand high frequency trading, which appears to have played a role today when the US market dropped 481 points in 6 minutes and recovered 502 points just 10 minutes later.  The potential for giant high-speed computers to generate false trades and create market chaos reared its head again today.  The battle of the algorithms – not understood by nor even remotely transparent to the Securitiesand Exchange Commission – simply must be carefully reviewed and placed within a meaningful regulatory framework soon.”

It is time fot the SEC to step up to its own sole duty, which is not to guarantee itself jobs at Goldman Sachs (well, not so much anymore), or to watch 18 hours of transvestite porn each day, but to protect the US investor from such borderline criminal activity as High Frequency Trading gone amok. Forget the Fat Finger - today we were one Fed Finger away from a meltdown that would make Black Monday seem a joke in comparison. Next time we won't be so lucky.

We will have much more to say on this shortly, but we leave you with the words of Dennis Dick of Bright Trading:

Predatory Market Making May Have Led to Crash
Dennis Dick, CFA
Bright Trading LLC

On January 4th of this year, Rambus (RMBS) fell 30% in a matter of five minutes.  It immediately bounced back and was later attributed to a trader with a “fat finger”.  When this incident occurred, I discussed on Zero Hedge, the possibility of this being more than just a trader with a “fat finger”. (http://www.zerohedge.com/article/rambus-hft-fat-finger-precursor-things-...).  I speculated that this could have been caused by a market structural problem. This could have been caused by a lack of liquidity due to predatory market making.

Today the same incident occurred, except this time, it happened in the overall market.  Again, the media is blaming a trader with a fat finger.  This may have been the catalyst but it was not the problem.

Predatory market making practices are driving liquidity providers out of the market.  Algorithmic systems constantly step in front of displayed liquidity providers, and discourage them from placing passive limit orders.  They are programmed to automatically step in front of displayed limit orders, to be at the front of the line for execution.  This practice is especially prevalent in thinner stocks.  If a human trader places an order at $20.05, the algorithmic system automatically bids $20.06.  If the human raises their bid to $20.07, the computer goes to $20.08.  This discourages true liquidity providers, and they place less passive limit orders.

Even in the 5 minutes that the market was crashing, these algorithmic systems were still abusing displayed orders.  I placed a few buy orders during the crash, and my orders were still automatically stepped in front of by a penny.  As my friend, Jason Fournier mentioned in his comments to the SEC, “not only are they discouraging liquidity, they are not allowing it.”

Broker-dealer internalization also abuses displayed liquidity as they continuously internalize retail order flow in front of displayed limit orders.  In some cases they step in front of the order by as little as 1/100th of a penny, an abusive practice called sub-pennying.

Broker-dealers justify this practice by saying they were giving their customer price improvement.  But they completely ignore the unquantifiable loss to the market participant who was displaying the order, and did not receive the fill. 

These predatory market making practices are having a devastating effect on liquidity in our market.  As true liquidity providers become more discouraged, and place less passive limit orders, the depth of the market gets thinner.  Therefore, when we have a trader with a “fat finger” accidentally make a mistake, there are less liquidity providers to cushion the blow.

If these predatory market making practices are allowed to continue, eventually there will be no real liquidity in the depths of the market, and when there is a market impact event, we’re in big trouble.

Today was just a taste of things to come, if our regulators don’t take note.

And for the benefit of the SEC, this is what a broken market looks like.

Comments

[MsCreant]

I don't know if this helps or not. Because of ZH we are at least virtually going down together, but maybe some of us will throw off our programing to know how to get to some lifeboats. I believe I got you to talk to me about gold, once. :-)

[i.knoknot]

albeit virtual, i can't think of a better crew to go with (notice i didn't say "down with")

given that there are 6-billion of us, we must be pretty wiley critters, so it just might be that little bit of gold, lead, and some bins of food/water/whiskey that turn out to be the life-boats we need for our titanic.

1/3 of the folks survived and "i gots plans" to make it through, whatever it may be.

without a doubt i'd "blame" y'all for the wisdom leading to my current insurance policy. ever-indebted.

[nope-1004]

Tyler and gang, GREAT JOB.  You called it over a year ago.  I truly wish we could have all been witness to a free market response today and saw the DOW sink probably to 3000.

I was in front of my computer watching it live, and man, I gotta tell ya I've never seen anything like that before.  This totally confirms two things for me:

1)  The market is totally fake, run by algos and gov't agents.

2)  Whoever is long this sucker is a freaking idiot.

Cudos ZH.  Thanks for the work.

Uh... fat finger?  No.  Maybe Michelle Cabrerra's fat boobs.... ?

[Leo Kolivakis]

My "fat finger" theory is that one of these idiots caused today's panic selloff:

[nope-1004]

Some prissy hands on that little fella Geithner.

There's a saying in my area about guys that show "an honest pair of hands", sometimes scuffed up, the odd band-aid or two.

But those hands above should be in a tampon commercial.

[velobabe]

my own personal observation and men and their fingers.

white collar men's fingers are a lot different than blue collar men's fingers.

especially surgeons, oh really, orthopedic surgeons.

knives, pencils, steel engines, keyboards.

they are very shaped, sharp at the end, almost. i am observant.

you can notice what tools they have adapted their hands to. honest.

[WaterWings]

Fascinating.

[WaterWings]

Fascinating.

[MsCreant]

He looks drunk. Okay, he looks like a dick. An asshole too. That picture is worth 1,000 words and I don't like any of them. 

Homer for Treasury.

Fred for Fed.

[Rusty Shorts]

 - back in the day, that was a curve ball sign...

[i.knoknot]

++++++

[moneymutt]

I keep thinking the man looks like the result of an elf and a giant breeding...I don't know why but this amuses me.

[DaveyJones]

dup

[DaveyJones]

One things for sure, he doesn;t work for Santa Claus

[MsCreant]

Which was Mom? :-D

Oww! Both the making and the baking.

Naughty puppy.  

[Oh regional Indian]

Cannot post pictures for some reason, but you guy and gals ought to read this article (Ames is awesome) and see the pictures in said article.

They are worth a mbmbmbmbmbillion words...

http://exiledonline.com/confessions-of-a-wall-st-nihilist-forget-about-g...

[MsCreant]

What a scareeeeem!

[DollarMenu]

Thank you ZH.

You're like some mythical oracle -

just read quietly and the truth will be 

carefully and completely parsed and presented.

[cocoablini]

Thanks for keeping up on this pending(occuring) disaster, Tyler

[FranSix]

Somebody mentioned 'House Of Pain?'

http://www.youtube.com/user/FranTxis#p/c/41316EC84E7714C1/9/DwQbPgouUYo

[jory]

This was a message from Goldman not to Fuck with them.  They are the market and they will decide where prices go.  You Fuck with us and we'll take you down.  Now back off before we crush you all to little specks and then eat you.

[Jim in MN]

And when their own software fucks with them?  It is like a bull moose that ends up drowned in a swamp...because the black flies drove it nuts.  There is no one to kill.

[cocoablini]

Hey, y'all remember when dollar ETF UUP jumped like 5 bucks and the Market retracted the orders???

Fat finger excuse is BULLSHIT.

-Either Tyler is right HFT went Skynet kuku or

-The market was hacked with Goldman Code and sent down when the PPT came into save. The market was in process of a PPT save(down 300 or so) and rebounded to -200/180(I forget) and then the SLAM came in to counteract it.

Tyler is correct. The domination of bots is destroying price discovery and prone to disaster and bot hysteria

[Hillbillyfreak]

As I read it, bids were pulled.  Stop looking for a rouge trade and ask so called market makers why they pulled their bids.

[Dread Pirate Roberts]

Did anyone else notice the huge spike in GLD volume an hour or so before the "fat finger" episode?  I found it very odd, but I don't know if it has any real significance.

[nope-1004]

Yes, I saw that.  I also noticed a huge selloff in oil in the hour before the crash.

Those two events proved to me that this was not a keyboard problem, as somebody knew what was coming... or a bunch of firms knew what they were going to do.

[nope-1004]

This was no "CNBS sources say fat finger" event.

This was a series of computer driven models that all did what code told them to do.  PPT stepped in and saved the market from 'free market' fall - period.

I think CNBC should publicly apologize for their stupidity in first miscalling the event, and secondly placing blame on Citigroup.

This casino is rigged.  What a shame that some are involved and likely will have no chance of collecting when the jackpot hits.

Happy gambling.

[Al Huxley]

The casino is rigged, but if you know how its rigged, it will still pay out large.

[hedgeless_horseman]

Still makes you sick to your stomach when your horse is on the lead with a furlong to go and you see the jock pull him up with your own eyes because you are right there on the infield rail as the field blows on by and you finish out of the money.

[Mitchman]

I am not certain that I can add much to what has already been said.  But I stand humbled in the greatness of this site.  It's not only the great reporting and commentary by the likes of TD.  It's also the people who send in their comments regularly.  Their insight and their sense of humor.  I am happy and proud to be part of the community.  We will prevail because our cause is just.

Just what, we're not sure.  But we'll figure that out on the next dip. 

[zapdude]

I feel exactly the same, well said.

[i.knoknot]

"Just what, we're not sure."

+100 for the whole comment, but laughed out loud for that quote. reminded me of the ending scene of "Burn After Reading"

[DaveyJones]

Beautifully said Mitchman. This site is just as much therapy as thesis. The intelligence and character help me through this insanity.

[Al Huxley]

Ohhh, so thats what a black swan looks like.

[Objective Soul]

Posted in dead thread:

What I do not understand is:

Ron Paul's Bill, which had majority support, has been languishing for months on the floor and they choose a crazy and hectic day like today to push this crap through./sarc
This whole thing seems staged.

[RockyR]

congratulations guys.  you were right about this.   i lost faith in this place months ago, but i sat there today watching the ticker saying to myself "good lord, those guys over at ZH were right".

great work.

[RockyRacoon]

My avatar can whip your avatar.  

Donate to ZH.  Link at top left of page.

[RockyR]

:-)

[Jim in MN]

Last I noticed CNBC had retreated to the "we have no idea what happened" position and did allow a hot blonde Aussie to report on Asian markets live instead of rerunning their stupid porn industry documentary for the tenth time.  So that's an improvement.

I am more of a political economist than anything else, and this just looks like a sinking ship with flying flags and bands playing.  Every now and then there's a shudder from the boilers, a shower of sparks from the wiring, then....back to the waltz for a time.

Anyone who can think knows that we have bad debt.  The decision to avoid haircuts in the bond market is fatal.  It simply short circuits all other capital markets.  The complex web of bailouts and baby-whippings, I mean deferred tax liabilities, is omnipresent.  The computers just add total stealth and speed to the risk environment.

Banning HFT is no doubt a good thing, as we cannot allow complex critical systems to be run by inherently aggressive robots trying to kill each other.  Just think about it. 

But banning HFT will not get us to functional markets any more than breaking up big banks will.  We have to write down the debt.

Progressive bond haircuts are the only way out from a political economy standpoint.  Write down the toxic paper and credit back to low and middle income folks via taxes, or else be income sensitive in the actual writedowns.

Novel idea, hmm?  That simply means it won't happen because it is inconceivable, and because it won't happen we are in a zombie financial world.

Retail investors are a thing of the past, or will be soon.  This is a Bosch painting of a market.  I am working on getting my family friends and church to shelter.  I hope you are too.

The ultimate test is the 401(k).  Just turn it the fuck off.  Very liberating.

[i.knoknot]

i'm half out - indeed liberating. worth every penny of the penalty. but... only half out so i can get some of the upcoming SS phase-2 annuity program. you can't win if you don't play...

[moneymutt]

Good to know someone with some sense in my MN...sovereign debt was the last place to shuffle this crap and taxpayers were last chumps into the ponzi scheme, now that countries are losing ability to endebt themselves more, gig is up.

Grown ups would face this gangrene, cut off a limb or two to save themselves as you propose, and start working on the prostheses to make life manageable and fairly okay into the future, but politicians, leaders, and financial folks will would rather let whole body suffer unto death than admit a problem and take painful measures to address.

Instead of a painful bond hair cut, we are going to get some messy form of global jubilee and likely have some wars break out because of it.

[JGus]

This might have already been said - I didn't have time to read all the comments - but, WHO THE HELL is buying the futures right now?!?!

[RockyR]

OK.  seriously, does it matter?  the gig is up.  it doesn't matter up or down, now.

[Hillbillyfreak]

people who shorted at higher levels and want to book their profits?

[Mitchman]

Finally.

A decent Bloomberg headline:

Electronic Trading to Blame for Plunge, NYSE Says (Update2)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aETiygQQ8Y3g&pos=2

[curbyourrisk]

I want the alleged trader who hit B instead of M, outted and fired.  I want to see the key board he used.  I want to see his trade log (unadulterated of course).

This is bullshit of the highest order...which means the .gov is involved.

[KTV Escort]

It was me... sorry. Amanda Drury walked by my trading desk and blew me a kiss... thus, the mis-struck key.

[laughing_swordfish]

I suspect that OS is correct.

They needed to manufacture an "event" to blow out Bernie Sanders and Ron Paul.

Just a little "muscle flexing" by TPTB to let us know what to expect if we persist in demanding "reform" of HFT and other things....

They have to remind us every now and then who's in charge..

KrvtKpt laughing swordfish

DKM Trading Division

we did ok today..... coulda been worse.

[williambanzai7]

HF KLEPTO TRADING:

http://williambanzai7.blogspot.com/2010/05/high-frequency-klepto-trading...

[cocoablini]

There is a whole lot of good things the suicide bombing of the DOW does:

-Saves the pending bond market auction failure and drives up purchases of toxic trash at low rates

-Shows Ron Paul and Congress who is boss(we know the banks flushed the market 400 points after TARP was canned)

-Allows for insiders to reap huge rewards

Its a show and tell for the government class to lay off. the Alpha class-the money lender system-the super rich-have the power and know when to show off their nukes when threatened. So fucking obvious

[manthrax3]

Sorry, guys, but was today really the end of the world? i mean, the market recovered in minutes. What would have happened in a human-only fairy tale market that you guys are advocating?  

[RockyRacoon]

Harry, you're back!

[i.knoknot]

if he doesn't know who harry is, that would be a pretty random comment. :^)

[Frederic Bastiat]

I have to be honest, I need to hear a better argument/explanation for how HFT is leading to less liquidity.  If passive liquidity providers are "stepped in front of" that means we reduced the spread, and wanting wider spreads is akin to candle makers demanding the government black out all America's windows.  If there are unethical strategies that make our market less efficient, lets uncover them--this post complains a lot more than it reveals the truth.  

[Brett in Manhattan]

NASDAQ has posted a list of stocks which had trades cancelled.

I didn't go through all of them, but most which I checked out were ETFs which didn't track their sectors.

http://www.nasdaqtrader.com/content/breaks_050610.xlsx

[chindit13]

And if JPM or GS or BAC or WFC prop desks got hosed today, do we taxpayers have to open our wallets again to make them whole?

[Cyan Lite]

Audio of Market Crash in mp3 format from the Open Outcry pits of the S&P500 “big” futures.

http://www.mediafire.com/?ng3mtaztmiv

Yeah, sounds like a "computer glitch" to me alright...

[zapdude]

Sounds like pandemoneum. 

It also sounds like that guy is going to die suddenly from a heart attack.

[geminiRX]

S&P futures look bleak right now. Boy, if things continue to deteriorate and gold continues it's rise, the gold demand may crash the comex. 

[geminiRX]

Oops, I blinked, now futures positive

[GoldmanSux]

Reversal. Now negative again and gaining steam.

[JW n FL]

by geminiRX
on Thu, 05/06/2010 - 23:52
#336409

Oops, I blinked, now futures positive

geminiRX,
                ******* "The CFTC is examining position limits in commodity futures contracts. In January, it proposed limits on energy contracts (crude oil, natural gas, heating oil and gasoline) with the intention of preventing "excessive concentration and speculation" in these markets. A cynic might argue that the regulatory framework is being used to limit positions on the long side in order to cap a key component of inflation when the purchasing power of paper currencies flags even further;" ******

 
Q2: What sparked the current controversy at the CFTC?
A2: Bart Chilton, one of four appointed CFTC commissioners, told the Wall Street Journal that the CFTC would be releasing a report in August that would contradict its 2008 report on speculators and oil prices, which determined that market fundamentals—supply and demand—were the dominant factors in the run-up of crude prices from 2002 to 2008. Chilton noted that the 2008 report was based on “deeply flawed data.” However, Gary Chensler, current CFTC chairman, has more recently countered that “… it is inappropriate to speculate on data that the Commission will be releasing in the future—data that none of the Commissioners has seen. News reports that the CFTC will release a study reversing the agency’s position on energy speculation are both premature and inaccurate.”
 
http://csis.org/publication/energy-speculation-cftc-and-position-limits
 

The CFTC proposed rules on January 1, 2010 that would set position limits on certain exchange traded energy derivatives and are aimed squarely at financial speculators. The CFTC’s plan to rein in speculators needs to overcome some high hurdles and the global nature of the energy market. The CFTC only regulates certain exchanges in the U.S., and limiting positions on exchanges could push trading into opaque over-the-counter (OTC) derivatives or even out of the U.S. all together, in either case, outside the purview of the CFTC. The limited powers and regulatory range of the CFTC does leave the new position limits with rather limited scope and feels like a regulatory barrier with all the efficacy of Swiss cheeses. Nonetheless, the new rules will affect speculators that want to swim in the deep liquidity of U.S. derivatives markets, as the rules target four major energy contracts that trade on the Chicago Mercantile Exchange’ New York Mercantile Exchange (NYMEX) and the IntercontinentalExchange (ICE).
 
http://currents.westlawbusiness.com/Articles/2010/02/20100225_0020.aspx

[htp]

Intraday market plunge today was due to the Fed audit bill. Now that the bill is gutted, Wall Street having won another decisive battle, the market should resume its meltup.

It's not a computer glitch, nor does it have anything to do with Euro contagion, imho.

[GoldmanSux]

Well, then, you know jack shit. 450 down to 600 down to 950 down in the blink of an eye is not a market, its the matrix. Non human.

[htp]

It has ceased to be a market long time ago, where have you been?

It's pointless to talk about computer trading programs without mentioning who controls these programs and to what purpose.

[GoldmanSux]

You said it was due to the Fed Audit bill. Stand by your idiotic comment.

[htp]

What I meant is those who control the market (by way of computers) manipulated the market today in order to blackmail congress into gutting the Fed audit bill. And they succeeded. Is that clear now?

This is essentially the same of what happened end of 2008, when Wall Street tanked the market to get the TARP. Does that sound idiotic to you?

[i.knoknot]

hmmm - that theory was thrown out there a few times today. not sure why he laid into you with such vitriol. a little out of character.

re: your theory - at this point, anything seems plausible. anything.

[Paranomos]

I don't buy this theory. Simply the bunch of crooks running the ponzi market decided to flush out the the legions of small specs who had refused to give in the nonsense of European debt contagion and GS scum investigation, in preparation for the next leg up.

[zapdude]

First post here, but have been reading & reading for several months.  The quality of analysis, clear-cut delivery of the message, and zeal for finding the truth here @ ZH are hands-down unequalled anywhere else that I've found.

Keep up the awesome work TD - your "Buy. Physical. Gold. Now." article several weeks ago motivated me to move 20% holdings into physical bars (safely secured with my 00 buckshot shells).

Today's market crash / failure only reinforced what you and the fellow fans here have already convinced me of - this Ponzi Train will one day derail, permanently.  I just wanted to say a huge "Thanks" for showing how jacked up things actually are (in spite of all the hype) so that I'm not the "dumb money" that I used to be.

[Renfield]

Zap, to quote Morpheus, welcome to the real world...

[chet]

If this is an HTF problem, what are the mechanics of the market making that acute rebound right after? Anyone understand how the instant rebound would fit in with the HTF explanation?

[Young]

The god d*mn CNBC first blames it on a trader with a fat finger, then they spend the last two hours of trading talking about how this crashed the market. The S&P500 was already down 3 percent before it tanked. Just sweep it under the rug.

[Hillbillyfreak]

Electronic market makers are to "blame".  Fat finger - bs.  Comupter error - bs.  Erroneous trade - bs.  Significant distribution/shorting by market makers in mid-April has now been offset by lower prices, to the benefit of the market insiders.  Trillion dollar loss for some equals trillion dollar gain for others.

[estrader]

To say I want everyone to burn that has participated in this fraud of a manipulation run up is an understatement.  I hope they LOSE EVERYTHING!

[Paranomos]

F*&ck*ng a**holes ... deleting my comment, i knew you were gov shills.

[Tripps]

COngrats ZH and TD, you nailed it MANY months ago. we just had a black swan event today. amazing

[JW n FL]

The reason only the AAA rated corp's are making money is because they are feeding at the 0% Fed Window... and thusly on themselves... which is not sustainable, but the market gets pushed upwards and the little guys will be suckered into coming back in at which time the sell off will occur...

Casino economics? not really, but yes really all at the same time.

Things to come...

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http://wallstreetandtech.com/photos/NYSE-Datacenter/index.jhtml;jsessionid=3ZNNVVGUDKIMZQE1GHPCKH4ATMY32JVN?cid=nl_wallstreettech_daily

Who needs the little guy with...

Data on the five-fold growth of derivatives to $516 trillion in five years comes from the most recent survey by the Bank of International Settlements, the world's clearinghouse for central banks in Basel, Switzerland. The BIS is like the cashier's window at a racetrack or casino, where you'd place a bet or cash in chips, except on a massive scale: BIS is where the U.S. settles trade imbalances with Saudi Arabia for all that oil we guzzle and gives China IOUs for the tainted drugs and lead-based toys we buy.

?  U.S. government's maximum legal debt is $9 trillion

?  U.S. mutual fund companies manage about $12 trillion

?  World's GDPs for all nations is approximately $50 trillion

?  Unfunded Social Security and Medicare benefits $50 trillion to $65 trillion

?  Total value of the world's real estate is estimated at about $75 trillion

?  Total value of world's stock and bond markets is more than $100 trillion

?  BIS valuation of world's derivatives back in 2002 was about $100 trillion

?  BIS 2007 valuation of the world's derivatives is now a whopping $516 trillion

http://www.marketwatch.com/story/derivatives-are-the-new-ticking-time-bomb?pagenumber=2

And.... of course the lobby is very well funded... NOT the little guys Lobby of course... the multiple hundred Trillion dollar derivatives Lobby, is well funded... read below (as a start for most of you I hope).

If Gensler were to get his way, "all transactions in standard contracts" would "be required to be conducted on regulated trading facilities or exchanges."

The House passed a bill on December 11 that would increase transparency somewhat but that does not, in Gensler's view, go far enough.   He charges that lobbyists from the Chamber of Commerce and the National Association of Manufacturers managed to keep end-user exemption.  He proclaimed, "Corporate America is on one side of the debate, I’m on the other."  But he also proclaimed that "It is the Wall Street banks that benefit from the so- called end-user exemption from transparency, not the businesses that use derivatives," which would seem to indicate that he has a different idea of what's good for business than the people who run said businesses.

This is a situation where the American public has no position on the issue — indeed, the vast majority have no idea there even is an issue —  and in which the interested parties will therefore dominate the debate. Given the way our system works, it appears Corporate America will get their way, at least for now.  They've moderated the House bill and it's virtually inconceivable that the Senate will move it further in Gensler's preferred direction.

http://www.acus.org/new_atlanticist/derivatives-market-20-times-size-american-economy

So... Little guy's or main street... nothing but Tax Bills and big boys... who use our tax dollars to lobby against us... winning and winning big... Thank God the Sheepeople have been dumbed down and cannot grasp what is going on!

The Banks are using profits to pay for their Lobby? not the 0% Fed Window?

http://www.wired.com/threatlevel/2009/08/bank-lobbyists/

**** "In the first three months of 2009, the financial sector spent $104.7 million to lobby Congress and the administration, down 8% from the same period last year" ****

http://online.wsj.com/article/SB124640640747376775.html

So that I am clear... 2008 was a vintage year for Banks? they made soooooooooooooooooooooo much money on 2008 that in the first 3 months of 2009... they could drop $104.7 MILLION DOLLARS?

http://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008

[Bokkenrijder]

Shot across the bow?

Ok, could this "glitch" have anything to do with the vote today in the German parlament about the Greek bailout?

http://www.faz.net/s/Rub3ADB8A210E754E748F42960CC7349BDF/Doc~EDB896674C3...

This "glitch" started when various networks were showing images of riots in Greece on TV, and in the end the DOW roughly ended where the "glitch" started.

A Greek bailout means a weaker Euro and a relatively stronger Dollar: higher bond prices and lower yield.

[Grand Supercycle]

MAY 1st:

"The weekly DOW chart shows an expanding wedge indicating a significant move is probable... this remains an overbought bear market rally and the uptrend could falter at any time.

http://www.zerohedge.com/forum/latest-market-outlook-0#comment-326767

[mogul rider]

Well

Now you know why the smart people are buying gold and taking delivery. It is absolutely the ONLY THING that is real is this matrix driven hell hole. I touch it and I know it is real, it isn't derivative, it isn't leveraged, it isn't matrix born.

You guys lost a fortune today and my bags of 9999 pure coins gained 30 bucks all the while I watched the horror unfold.

I am not gloating, I am warning all of you, I STRONGLY, no EMPHATICALLY recommend you protect yourself.

Financial Armageddon has arrived and it will eat you and your family!

No I"m not a gold bug - I a simple man who doesn't like when society and fuck ass quants try to blow smoke up my ass.

[i.knoknot]

not as subtle as some, but literally and figuratively... on the money. best to you.

[No More Bubbles]

This pig didn't "almost die" - it fucking died!

The volatility is going to whipsaw and destroy many people all the way down.......

[Grand Supercycle]

Posted May 1st - a week before the crash.

 '11,250 / 300 is an area of significant resistance and if this level can’t be breached it should signal the end of the March 2009 bear market rally - the weekly DOW chart shows an expanding wedge indicating a significant move is probable - this remains an overbought bear market rally and the uptrend could falter at any time - the VIX index continues to give bullish warnings which is bearish for equities - long term charts of key equity indexes continue to give bearish warnings and the March 2009 lows will be breached in my opinion - USD Index bullish warnings since 2009 on the weekly and monthly chart have not changed and further USD strength and thus EURO weakness is still expected '

http://www.zerohedge.com/forum/latest-market-outlook-0

http://stockmarket618.wordpress.com

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