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The New York Times Unleashed On High Frequency Trading

Tyler Durden's picture





 

High frequency trading has official gone mainstream. From the New York Times:

"It is the hot new thing on Wall Street, a way for a handful of traders to master the stock market, peek at investors’ orders and, critics say, even subtly manipulate share prices.

It is called high-frequency trading — and it is suddenly one of the most talked-about and mysterious forces in the markets.

Nearly everyone on Wall Street is wondering how hedge funds and large banks like Goldman Sachs are making so much money so soon after the financial system nearly collapsed. High-frequency trading is one answer."

(Their activities were described by an investor at a major Wall Street
firm who spoke on the condition of anonymity to protect his job.)

Read the whole thing here.

hat tip Nicholas

 


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Thu, 07/23/2009 - 22:36 | Link to Comment andy55
andy55's picture

 

 

It would be very interesting to see some analysis on what the Naz and NYSE get, profit wise, from HFT (and what they'd stand to lose from HFT reform). In other words, it'd be useful get a real feel for what the split of profits is for each exhange.

 

Thu, 07/23/2009 - 23:29 | Link to Comment Anonymous
Thu, 07/23/2009 - 22:34 | Link to Comment Bob Dobbs
Bob Dobbs's picture

Well, that's the price of fame and glory isn't it?  From Zero Intelligence to trusted source in 24 hours!

Thu, 07/23/2009 - 22:34 | Link to Comment Anonymous
Fri, 07/24/2009 - 11:26 | Link to Comment dnarby
dnarby's picture

BOY, wouldn't it be nice if they were so dissapointed with Obama's 'Nope, no Change' policy that they went ahead with it anyway?

Thu, 07/23/2009 - 22:35 | Link to Comment EconomicDisconnect
EconomicDisconnect's picture

I think of the scene in "Die Hard" after the first cop is shot on by the robbers:

"Welcome to the party pal!!!"

 

Now open your eyes and see a world of wobders and mystery unveiled.

 

ZH or ZI,

thanks for the busting open of this swollen pimple we call "The Market".  What a sham.

Thu, 07/23/2009 - 22:37 | Link to Comment FischerBlack
FischerBlack's picture

Tyler, it doesn't matter who got this story out there first, but we all know it was you. Keep turning over stones and stomping the balls out of whatever crawls out.

 

Please, for all our sakes.

Thu, 07/23/2009 - 22:39 | Link to Comment Anonymous
Thu, 07/23/2009 - 23:29 | Link to Comment agrotera
agrotera's picture

The army for righteousness is bigger than even all of the folks who regular ZH.  I think that is why the Federal Reserve hired an x-enron lobbyist.  The only hope the establishment aholes that you refer to have to keep their slimmy operations in place is to do such a great PR job this growing number of people, who care about right and wrong,  go to sleep and forget what is eating at their guy...i don't see that happening.

Yes, as  Bob Dylan said, "... the times they are a changin."

Thu, 07/23/2009 - 22:47 | Link to Comment Lothar the Rott...
Lothar the Rottweiler's picture

MSM getting pounded.  Truth will out.  Some will win, some will stay duped until the inevitable.

On a long enough timeline...

Thu, 07/23/2009 - 22:48 | Link to Comment Anonymous
Thu, 07/23/2009 - 22:49 | Link to Comment GoldmanSux
GoldmanSux's picture

CNBC must be red faced. When was the last scandal they broke? They are enablers.

Thu, 07/23/2009 - 22:49 | Link to Comment deadhead
deadhead's picture

Nice to see the NY Times pick up on your stuff, TD.  Great job by you and ZH. And a special thank you goes out to those good folks who are sending info to TD.  As has been said, the only way to disassemble corruption is for the insiders to come out and be heard.

Thu, 07/23/2009 - 22:52 | Link to Comment Anonymous
Thu, 07/23/2009 - 22:55 | Link to Comment deadhead
deadhead's picture

Nice explanatory article by the grey lady with a good example on intel/broadcom play of last week.

I note to anyone interested that the article is on the main page of their online site.

Thu, 07/23/2009 - 22:58 | Link to Comment curbyourrisk
curbyourrisk's picture

Take that Charlie DuecheBag!  ZeroHedge might not get credit for BREAKING this news....as NYT will want that....But someone has to TEACH the reporters what the real stories are....  Tyler Durden and his compadres are doing just that.  Meanwhile.. Charlie and Maria...well they can just continue on air love fest.....

Thu, 07/23/2009 - 23:18 | Link to Comment Shaza (not verified)
Thu, 07/23/2009 - 23:03 | Link to Comment agrotera
agrotera's picture

Good news Tyler!

With the complex nature of all of this, the only way to make any progress in corrective action, may be for you to take everything on a silver platter to the SEC and Justice department, including what and how to investigate because frankly, the size and scope of this probably exceeds any of our current regulatory body's ability to "cope" with.  If you do all of that, there is no excuse, just like the Madoff screw up by the regulators. 

 

And while you are at it, would you please consider opening another case study with recommendations,  to bring awareness of the abuses that are probably transpiring with the PPT in action? of.

Thu, 07/23/2009 - 23:18 | Link to Comment Shaza (not verified)
Thu, 07/23/2009 - 23:37 | Link to Comment agrotera
agrotera's picture

I agree Shaza--EXPONENTIALLY bigger than Madoff! 

I think we are all victimized to shell games, fraud and massive crimes by this cozy financial-government superpower that seems to not have any oversight...except for one trump card the US citizens have--when the country realizes that every bill that is passed that perpetuates all of this, and every legal action that is NOT taken to correct matters, they will be able to note that the puppets in Washington (all except for a few in the house of representatives) HAVE to be voted out, and replaced by people who want to dismantle this corrupt machine that has officially turned our country into a banana republic!

Yea, Shaza, i want to go to the premiere too!  I am sure Tyler and Marla will remember all of us!

Thu, 07/23/2009 - 23:58 | Link to Comment Anonymous
Fri, 07/24/2009 - 01:17 | Link to Comment Anonymous
Fri, 07/24/2009 - 01:24 | Link to Comment agrotera
agrotera's picture

you mean they have no idea that this has never been identified as a problem before so it shouldn't be examined?

Fri, 07/24/2009 - 01:21 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Another "Anonymous" supporting HFT. According to you they are providing a public service.

Then why is it so profitable?  Shouldn't competition drive profitability down?

Or maybe it really is a scam.

Fri, 07/24/2009 - 07:47 | Link to Comment SWRichmond
SWRichmond's picture

Anonymous #13679,

 

I know you don't want to hear this, but if people paid $1 a share, would they take a longer view?  Would the act of buying those shares more likely actually be "investment" that took place in a "capital market" where "investors" lent their "capital" to businesses that actually used the money for plant and equipment (capital stock), made a useful product, and brought it to market at a competitive price?  Would those "investors" do fundamantel analysis of the companies business model?  Would the share price actually reflect something real?

 

Oh the fucking horror.

Thu, 07/23/2009 - 23:04 | Link to Comment Anonymous
Thu, 07/23/2009 - 23:12 | Link to Comment spekulatn
spekulatn's picture

Pimm Fox had the Pipeline guy on his show today after the close. HFT was the topic.

http://www.bloomberg.com/tvradio/tv/tvtoday.html

 

"MARK IT ZERO, DUDE"

Thu, 07/23/2009 - 23:12 | Link to Comment I need more cowbell
I need more cowbell's picture

My first album, 1967, the Doors ( hmmm, this actually explains a lot )

This is the end
Beautiful friend
This is the end
My only friend, the end

Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end
Ill never look into your eyes...again

Can you picture what will be
So limitless and free
Desperately in need...of some...strangers hand
In a...desperate land

Lost in a roman...wilderness of pain
And all the children are insane
All the children are insane
Waiting for the summer rain, yeah

Theres danger on the edge of town
Ride the kings highway, baby
Weird scenes inside the gold mine
Ride the highway west, baby

Ride the snake, ride the snake
To the lake, the ancient lake, baby
The snake is long, seven miles
Ride the snake...hes old, and his skin is cold

The west is the best
The west is the best
Get here, and well do the rest

The blue bus is callin us
The blue bus is callin us
Driver, where you taken us

The killer awoke before dawn, he put his boots on
He took a face from the ancient gallery
And he walked on down the hall
He went into the room where his sister lived, and...then he
Paid a visit to his brother, and then he
He walked on down the hall, and
And he came to a door...and he looked inside
Father, yes son, I want to kill you
Mother...i want to...fuck you

Cmon baby, take a chance with us
Cmon baby, take a chance with us
Cmon baby, take a chance with us
And meet me at the back of the blue bus
Doin a blue rock
On a blue bus
Doin a blue rock
Cmon, yeah

Kill, kill, kill, kill, kill, kill

This is the end
Beautiful friend
This is the end
My only friend, the end

It hurts to set you free
But youll never follow me
The end of laughter and soft lies
The end of nights we tried to die

This is the end

 

19 fucking 67- and these modern silly-ass posers think they are the shit ( is that the right vernacular of da youts a taday? ).

Thu, 07/23/2009 - 23:27 | Link to Comment GoldmanSux
GoldmanSux's picture

Weird scenes inside the gold mine= the Fed.

Thu, 07/23/2009 - 23:42 | Link to Comment deadhead
deadhead's picture

I'll counter with...."when life looks like easy street there is danger at your door"

 

The Grateful Dead

Fri, 07/24/2009 - 00:38 | Link to Comment GoldmanSux
GoldmanSux's picture

Goddamn, well I declare, have you seen the like?

Their walls are built of cannonballs, their motto is don't tread on me.

Thu, 07/23/2009 - 23:12 | Link to Comment Shaza (not verified)
Thu, 07/23/2009 - 23:22 | Link to Comment Anonymous
Thu, 07/23/2009 - 23:39 | Link to Comment Anonymous
Thu, 07/23/2009 - 23:49 | Link to Comment Anonymous
Thu, 07/23/2009 - 23:49 | Link to Comment KidDynamite
KidDynamite's picture

that's a total falsehood.  If 'bots or anyone else are buying or selling stocks at insane levels, it should make your job easier to do.

Thu, 07/23/2009 - 23:55 | Link to Comment Anonymous
Fri, 07/24/2009 - 00:10 | Link to Comment Anonymous
Fri, 07/24/2009 - 00:20 | Link to Comment Anonymous
Fri, 07/24/2009 - 00:06 | Link to Comment Anonymous
Fri, 07/24/2009 - 00:13 | Link to Comment Anonymous
Fri, 07/24/2009 - 00:23 | Link to Comment Anonymous
Fri, 07/24/2009 - 00:31 | Link to Comment Anonymous
Fri, 07/24/2009 - 04:03 | Link to Comment Anonymous
Fri, 07/24/2009 - 01:27 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

and yet another "anonymous" poster supporting HFT.

Fri, 07/24/2009 - 00:08 | Link to Comment Anonymous
Fri, 07/24/2009 - 01:24 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Aaaaaannnnnndddd.

Yet another "Anonymous" supporting HFT.

Thu, 07/23/2009 - 23:28 | Link to Comment Anonymous
Thu, 07/23/2009 - 23:53 | Link to Comment Anonymous
Fri, 07/24/2009 - 00:13 | Link to Comment Zro
Zro's picture

Access to Goldman's algo would prove to be very interesting at this point. A complete understanding of it could entirely invalidate their arbritrage strategy

Fri, 07/24/2009 - 00:15 | Link to Comment Dr Hackenbush
Dr Hackenbush's picture

US –vs- China (the manipulation Olympics) 

Fri, 07/24/2009 - 01:13 | Link to Comment Anonymous
Fri, 07/24/2009 - 01:29 | Link to Comment Anonymous
Fri, 07/24/2009 - 01:52 | Link to Comment GoldmanSux
GoldmanSux's picture

Dude, you are already out of date. Refresh or go the home page. Surely you can't be opposed to bringing some light to the darkness. Thru the pool, darkly.

Fri, 07/24/2009 - 09:44 | Link to Comment Anonymous
Fri, 07/24/2009 - 02:09 | Link to Comment Anonymous
Fri, 07/24/2009 - 03:09 | Link to Comment Miles Kendig
Miles Kendig's picture

And the hits just keep on rolling...... On WZIR.....

 

Fri, 07/24/2009 - 07:10 | Link to Comment Bruce Krasting
Bruce Krasting's picture

TD et al: The times quoted a source saying that the HFT is worth 21 bil a year to the players. We know that GS is half the flow so maybe they are half that gain too??? That can't be right. GS does not make 10 b in total?? So what is a good number for the returns on this Biz???

Fri, 07/24/2009 - 07:13 | Link to Comment Anonymous
Fri, 07/24/2009 - 07:31 | Link to Comment erich
erich's picture

Great story.  Wonder why the NYT can write coherent stories while this blog takes up so much more space without actually explaining things?

Fri, 07/24/2009 - 09:38 | Link to Comment Anonymous
Fri, 07/24/2009 - 09:43 | Link to Comment Anonymous
Fri, 07/24/2009 - 11:07 | Link to Comment Anonymous
Fri, 07/24/2009 - 13:09 | Link to Comment PrDtR
PrDtR's picture

Trying to find my mojo regardless of what the big guys do.. playing w/my algorithms to game theirs.. doesn't work as consistently as I'd like, but.. it is working!

 

Sun, 07/26/2009 - 06:35 | Link to Comment PrDtR
PrDtR's picture

..and here is a critical view from a Forbes.com contributor..

 http://www.forbes.com/2009/07/24/goldman-sachs-high-frequency-intelligen...

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