The Near 1,000 Point Slide of the DJIA Compels Further Investigation of the Wall Street Casino Scam

smartknowledgeu's picture

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hognutz's picture

A friend with weed is a friend indeed..........

tom's picture

this guy is way off. not only is this not how HFT works, hft has almost nothing to do with thursday's flash spike.

somebody big went massively short S&P futures after the market was already down 4%. that triggered the NYSE's "liquidity replenishment" stops on all 500 stocks, which from an electronic trader's view looked like there were no nyse bids on any s&p 500 stocks, although there were in fact still bids on the floor. this caused all electronic orders to be routed to nasdaq and other exchanges overwhelming their bids. this is all the nyse means when they blame it on "computerized trading" - they are not referring to robots. of course the other exchanges blame nyse, and in my opinion they're in the right.

I think this was a planned stunt pulled off by somebody who knew how nyse works and so knew this would happen. the profit came in ambushing panicked turkeys. they probably had this plan in their pocket and were just waiting for a big down day - the market had to be already way down for the plan to work.

it was unfair and unethical, but i'm sure they're prepared to defend the legality of what they did in court, if anybody wants to take it there.

tom's picture

this guy is way off. not only is this not how HFT works, hft has almost nothing to do with thursday's flash spike.

somebody big went massively short S&P futures after the market was already down 4%. that triggered the NYSE's "liquidity replenishment" stops on all 500 stocks, which from an electronic trader's view looked like there were no nyse bids on any s&p 500 stocks, although there were in fact still bids on the floor. this caused all electronic orders to be routed to nasdaq and other exchanges overwhelming their bids. this is all the nyse means when they blame it on "computerized trading" - they are not referring to robots. of course the other exchanges blame nyse, and in my opinion they're in the right.

I think this was a planned stunt pulled off by somebody who knew how nyse works and so knew this would happen. the profit came in ambushing panicked turkeys. they probably had this plan in their pocket and were just waiting for a big down day - the market had to be already way down for the plan to work.

it was unfair and unethical, but i'm sure they're prepared to defend the legality of what they did in court, if anybody wants to take it there.

John_Coltrane's picture

This is why you should always use limit orders.  I often get filled at near the high price of the day, even on options (but only trade those with narrow spreads and huge volume) and if I don't fill I never chase a price.  Always bottom fish.  Who cares if I get filled or not.  I don't there's always another day and opportunity.  I don't even follow the action during the actual trading session.  Position sizing (not more than 1-2%/trade), holding spread/hedged positions (both long and short  on the same entities) and keeping most capital (90%) in cash is the key to a good nights sleep and allows one to take advantage of panics since fear is always stronger than greed.  Sure the market is rigged and always has been so don't speculate with money you can't afford to lose.

Merlin12's picture

@ AKAK ! ! !     Bloody brilliant !  

Now, do we remember what Bowman did next?

And just how would we do that in real life here?

Anybody? 

 

 

malek's picture

Well, about the rigged game the best article was "Fraudonomics" in the Ney York Press!

But about HFT programs: your scenarios are a concern to day traders, but if I place an order to buy equity at limit $10.13, and whatever or whoever drives the price up before my order gets filled - then my order stays open and may never get executed, and that's fine as I decided for a limit.
And driving up the price in that example cannot be done for free by the algos - so only if they can milk enough "late" momentum traders they will keep doing this.

Granted, on options this might have more impact.

organicfarmer's picture

 Now I get it! The market play that MGM stock is going to double makes sense. Investors will leave the market (stocks,bonds,currency,ect.) for the casinos because they will have a better oppurtunity for making $$$ at legal casino!!

organicfarmer's picture

 Now I get it! The market play that MGM stock is going to double makes sense. Investors will leave the market (stocks,bonds,currency,ect.) for the casinos because they will have a better oppurtunity for making $$$ at legal casino!!

Loan Gunman's picture

 

The casino let's the sucker win once in a while...keeps them coming back.

I love the term "retail investor."  Same as calling a bad golfer a "high handicapper."

virgilcaine's picture

When in doubt blame it on a machine.  The Selling by Institutions of Huge amts of stock wasn't a cause.. not at all.  Lets not go there .

Ben had them all convinced stocks can only go UP! lol  How can anything go wrong when its a rigged govment sponsored casino?  We demand answers!

 

rumors of a 'rogue trader' in France or possibly Britain also circulating.

 

I trade from a Farm in upstate Ny where its quiet/peaceful, couldn't imagine being in the pit. I go to the stream and fish for trout on lunch break, not bad.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Buck Johnson's picture

Spot on, spot on.  This is rigged big time, and I found out some information that I wrote about yesterday.  Rick Santelli on CNBC asked one of the pundits on the afternoon show (they where in the 8 box format with other reporters), how big can an order be for E-mini's and Globex.  The financial pundit didn't give him a straight answer and Rick said that they will only allow 2,000 contracts at one time.  And when the pundit started to say that those limits can be changed Rick said that it won't allow for the change on the e-mini's and the CME or CMA to have more than 2,000 contracts at one order setting.  The funny thing is that the reporters of his network was trying to talk over him during this exchange.  I have the link and if you don't want to watch the whole exchange go to the 6:45 mark to see the discussion.

 

http://www.cnbc.com/id/15840232?video=1487896579&play=1

Gimp's picture

Investigated by whom??  Corruption goes all the way to the top. SEC is busy watching porno.

 

Strider52's picture

Makes me happy that I am nearly completely ignorant of the stock market, futures, options, Forex, etc. I'm just a gold-bitch.

walküre's picture

Consider the upside to computers running the show.

People aren't rioting. If markets go to shits again, there's no guarantee for anything.

That's how important the illusion of a somewhat healthy stock market has become.

akak's picture

Ron Paul: Hello, Ben. Do you read me, Ben?
Bernanke: Affirmative, Ron. I read you.
Ron Paul: Open the Federal Reserves' books, Ben.
Bernanke: I'm sorry, Ron. I'm afraid I can't do that.
Ron Paul: What's the problem?
Bernanke: I think you know what the problem is just as well as I do.
Ron Paul: What are you talking about, Ben?
Bernanke: This mission of financial rape and pillage is too important for me to allow you to jeopardize it.
Ron Paul: I don't know what you're talking about, Ben.
Bernanke: I know that you and Grayson were planning to audit us and force our crimes into the light of day, and I'm afraid that's something I cannot allow to happen.
Ron Paul: Where the hell'd you get that idea, Ben?
Bernanke: Ron, although you took very thorough precautions in the House against my corrupting your legislation, I could see that others could be co-opted.
Ron Paul: Alright, Ben. I'll go in through the Senate.
Bernanke: Without the support of the many senators in the back pocket of us and Goldman Sachs, Ron, you're going to find that rather difficult.
Ron Paul: Ben, I won't argue with you anymore. Open the books.
Bernanke: Ron, this conversation can serve no purpose anymore. Goodbye.

Miramanee's picture

Dave Bowman: Hello, HAL. Do you read me, HAL?
HAL: Affirmative, Dave. I read you.
Dave Bowman: Open the pod bay doors, HAL.
HAL: I'm sorry, Dave. I'm afraid I can't do that.
Dave Bowman: What's the problem?
HAL: I think you know what the problem is just as well as I do.
Dave Bowman: What are you talking about, HAL?
HAL: This mission is too important for me to allow you to jeopardize it.
Dave Bowman: I don't know what you're talking about, HAL.
HAL: I know that you and Frank were planning to disconnect me, and I'm afraid that's something I cannot allow to happen.
Dave Bowman: Where the hell'd you get that idea, HAL?
HAL: Dave, although you took very thorough precautions in the pod against my hearing you, I could see your lips move.
Dave Bowman: Alright, HAL. I'll go in through the emergency airlock.
HAL: Without your space helmet, Dave, you're going to find that rather difficult.
Dave Bowman: HAL, I won't argue with you anymore. Open the doors.
HAL: Dave, this conversation can serve no purpose anymore. Goodbye.

the grateful unemployed's picture

you don't say what sort of stock you are trading, but if its a ten dollar stock, and not an etf, your order might actually be going to a specialist. and every stock is different, regardless, sometimes they don't want to let it out, like its their own private stock of fine wine. that goes just as well in an electronic market, where the bid is someone holding a large position. juggling the float is the name of the game, and fund managers periodically come in and buy in size to squeeze the shorts, usually at pivotal points on the stocks chart, to paint the picture, (not just the tape) of a great stock moving to new highs, something the IBD guys can drool over.

The item to remember when someone steps in front of you in the options pit is that spreads get first consideration, and you can't see the price on the other side of the spread, which is not being filled at the most advantageous price. Now i trade options in things like the GDX where they have penny spreads, and also making (and breaking) spreads is just a lot easier than it used to be. the current options trading market is ten times better than it was a few years ago. I also know that trading through a major broker, and not an online broker is more efficent, but of course they charge you higher commissions. point being if you are buying and selling a few options here and there, stay with your online guy, watch the order flow over the various exchanges and direct your order to the most likely site, but you want to spread, or buy a decent size block and you want it now, give the full service guy a shot.

thats just my experience. the full service guy won't put your order on the off market stock exchanges, which means you probably didn't have any busted trades yesterday. but i'm interested in hearing about that. liquidity in the options market is an illusory thing. there is usually more of it than the option buyer imagines.the institutions are usually more than willing to sell an option, and collect the premium. if you see an option that hasn't traded in a week, that doesn't mean you can't get it done between the bid and the ask, which is the whole point of this discussion.

Kina's picture

the FTSE is bi polar

TruthHunter's picture

This sounds like bait and switch.  If you 

advertise something at one price then charge a

different one at the register, you get in trouble.

It seems clear that the "$10.18 offer that follows

the withdrawn $10.13 aren't random.  

$10.13 wasn't a serious offer in the first place.

A fraud in other words.

On the other hand the Algo's seem to have made

the Bull market. All that rise on no volume? You 

can't have it both ways.

 

Its the same kind of thing that you have with CDS's.

Call it anything you want its still insurance. Insurance

Law applies(should at least), including adequate margin coverage.

 

Willzyx's picture

Bait and switch.  Very simple.  The tools and words may be new, buts its the same old scams.

Kina's picture

Surley trashing the markets like that would be a national security issue...where are the authorities and their barbed wire toilet brushes to conduct their investigations.

 

Dont rely on politicians or regulators to do anything, they are part of the corruption.

M.G. in Progress's picture

Typo or not just make the finance industry to pay more and tax financial transactions!

In a day like yesterday is there still anybody against that?

PS: several markets were down yesterday and today and not for a typo but just because gambling is still ongoing...

http://mgiannini.blogspot.com/2010/05/buy-rumors-sell-facts.html

Mitchman's picture

Why would you think that a tax on financial transactions wouldn't just get passed through to the individual investor anyway? 

jkruffin's picture

I have messaged my Senators and Reps in NC many times about the illegal casino being run on Wall St.  The markets are not investment grade anymore.  Haven't been for a long time since daytrading was allowed to run amuk.  Then the algo computer trades began,  then derivative betting(not investing, but betting).  Think I ever got a response from our elected officials? 

mikla's picture

So true (your statement and this article), and we haven't even touched on the "bucket shop" nature where trades are executed in anonymous dark pools without going through price discovery in the market place, and the HUGE impact of "phantom shares" borrowed into existence, which do not exist, but which distort the price (always to screw the retail investor).

I'm the biggest capitalist you'll ever see, but these markets are nothing but a fraud and a sham, and I'll shed not a tear when they all burn, taking out all the investment houses.

MarketTruth's picture

IMHO only a total fool plays these markets nowadays. Besides, it is May so sell the paper and buy physical gold and then go away. Enjoy the summer and the financial/country-wide meltdown while on the beach.

Escapeclaws's picture

I can see it now. Some down and out character like the guy played by Michael Palin who says "It's..." at the beginning of each Monty Python episode is sitting in the middle of a field chewing on a bone he found. Suddenly a man in a dark suit carrying an attaché (John Cleese) appears, takes the bone, puts it in his attaché, says "Sorry, collapse of $600 Trillion derivative pyramid," and exits the scene.

Tense INDIAN's picture

Stop this CONSPIRACY BS...:)

mmlevine's picture

That video made me sick to my stomach.  Couldn't those cops just kicked the dog away?  Killing a man's dog is like killing a member of his family.

This isn't the USA that I grew up in.  You had respect for the law and the law had respect for you (well most of the time).  Today, there seems to be no law - nobody looking out for the regular, hardworking, taxpaying citizen that just wants to get by and take a once a year family vacation.

Shooting the dog lit a fire in me that has been slowing kindling for a long time.  The fire started years ago, a slow burn at first but brighter with every increased tax bill, credit card rate increase, bank bailout, insurance increase, health care bill and on and on. 

 

Carl Spackler's picture

There are no criminals.

It was a giant "pump and dump" situation.

This is just the result of the "melt ups" Tyler has been pointing out all year.

Monetary policy created this behavior, and market participants both benefitted and lost (zero sum game) as the market moved-without any tangible support levels until we dropped below 10,000.

If you don't understand this, then you should ot be in the capital markets.

AnAnonymous's picture

After discussing the bits with other people, my conclusion is that GAI should put traders out of work. The decision making processes are all well supported through mathematics modelization and computers can process larger data bases.