No, It's Not The Nat Gas "Fractal" Algo: Nanex Discloses The Very Ominous Implications Of Today's Berserk Crude Algo

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Thu, 07/07/2011 - 17:08 | 1434118 Superslam
Superslam's picture

Fractal fracking, bitchez! Oh wait...crude oil? Um...never mind.

Thu, 07/07/2011 - 18:16 | 1434346 Contura
Contura's picture

The bottom one looks like the dog in Dire Straits "money for nothing" MTV-video from the 80´s....

Thu, 07/07/2011 - 21:09 | 1434690 tom a taxpayer
Fri, 07/08/2011 - 01:19 | 1435140 Fish Gone Bad
Fish Gone Bad's picture

If you have (inside) information, and trade on it one week in advance, it is insider trading. 

If you trade on it, 1 day in advance, it is insider trading.

If you trade on it, 1 hour in advance, it is insider trading.

If you trade on it, 1 second in advance, it is high frequency trading.

Fri, 07/08/2011 - 01:30 | 1435152 Ahmeexnal
Ahmeexnal's picture

JPig will use the algos to bring silver price down so they can cover their shorts.

As soon as they do, they will go long and you know the rest of the story.


Thu, 07/07/2011 - 17:07 | 1434122 gjervis
gjervis's picture

lets just plank

Thu, 07/07/2011 - 17:07 | 1434123 nope-1004
nope-1004's picture

Bankster whores.  No conscience, no morality, just white-collar crime.


Thu, 07/07/2011 - 17:57 | 1434302 Saxxon
Saxxon's picture

It's ok; I'm out.  These electronic markets are simply infected with RAGE and will have to burn themselves out fighting with one another.

Thu, 07/07/2011 - 18:03 | 1434314 LeBalance
LeBalance's picture

you are not out.  you live in the impact zone.  :)

Thu, 07/07/2011 - 21:58 | 1434745 Goldilocks
Goldilocks's picture

Do you mean financial impact? … & / or something else …

Imagine the aftermath of nuclear bomb sabotage (like Fukushima) at one of USA’s massive semi spent nuclear material garbage dumps / holding facilities.

USAs handler’s seem to have had a love affair with creating / collecting gargantuan piles of extremely lethal poisons … despite a plethora of better technologies & ideas. (they have been forward thinking indeed & going long the apocalypse)

& Now that the potential dooms-day-devices (the world’s biggest dirty bombs) are in place … we’ll concede to anything. As for our (USA’s) sovereignty, what the hell good is that, when we have massive bombs parked up our collective asses?

</sarc on> Now get back to work, pay taxes, & tow the line … or else, booom. </sarc off>

No place to run to … no place to hide. (less those planning on leaving planet earth via spaceship, stargate, or whatever …they might say, “go on, you’re special”, but more likely,  you will be “the special”, food that is)(sorry about the austerity / harshness of this message)

Back to reality … Perhaps those ghost cities & such in China have a purpose, after all.

</sarc on> Long live the dollar! USA!… USA!….USA!… </sarc off>

Ohh yah, one more thing… one wrong move & the country gets it. Do what he say, do what he say … (black humor, I know … sorry about that too!)(why did I even bother posting ;-)

Fri, 07/08/2011 - 01:57 | 1435179 Oh regional Indian
Oh regional Indian's picture

Nice riff, good change of pace there Goldi. :-)


Thu, 07/07/2011 - 19:00 | 1434425 SubjectivObject
SubjectivObject's picture

Pimps ..... bankster pimps .... the real monsters.

Thu, 07/07/2011 - 17:09 | 1434140 DaddyO
DaddyO's picture


Great Art Work!


Thu, 07/07/2011 - 17:10 | 1434142 ThoughtCriminal
ThoughtCriminal's picture

Cubist algos ... Suprematism algos ...

Thu, 07/07/2011 - 17:21 | 1434196 wandstrasse
wandstrasse's picture

abstract expressionism, the last three could be from the great Clyfford Still:

Thu, 07/07/2011 - 17:32 | 1434235 Miss Expectations
Miss Expectations's picture

This whole thread makes me feel all twombly..

Thu, 07/07/2011 - 17:41 | 1434264 wandstrasse
wandstrasse's picture

Twombly passed away recently. I made an extra unconscious doodle during a phone call in memoriam.

Fri, 07/08/2011 - 05:29 | 1435342 Jacks Creation
Jacks Creation's picture

Who on earth would flag that as junk? Some disgruntled hyper-realist? Wtf.

Thu, 07/07/2011 - 17:10 | 1434145 jm
jm's picture

So what the hell... stay out of indexes and liquid trades?

Thu, 07/07/2011 - 17:16 | 1434167 hambone
hambone's picture

More generally, avoid earth and mankind.

Thu, 07/07/2011 - 17:25 | 1434205 wandstrasse
wandstrasse's picture

transform into a sycophant. that is what I did.

Thu, 07/07/2011 - 17:33 | 1434237 ebworthen
ebworthen's picture

Or an angrily alcoholic hermitic luddite misanthrope.

Thu, 07/07/2011 - 17:38 | 1434250 hambone
hambone's picture


Thu, 07/07/2011 - 17:57 | 1434301 Troublehoff
Troublehoff's picture

i'd love to


but unfortunately, there is this thing called 'money' that i seem to perpetually need for essentials such as food, shelter and the purchase of mothers day cards etc...

for that reason, I am forced to work in a job, I'd prefer not to do and socialise with people I would otherwise avoid

...and i'm one of the 'lucky' ones

oh the humanity!

Thu, 07/07/2011 - 18:52 | 1434408 CrazyCooter
CrazyCooter's picture

This is as good a place as any to toss out my random $.02.

Some quick background before I shoot my mouth off. My first job out of college was writing "productivity tools" for semi-conductor mask layout. I went on to work in semi-conductor manufacturing. Most of the last 15 years of my life, I have written software of some variation or another, spanning multiple platforms, languages, and problem spaces/industries. I am sure that all sounds like Greek, just like some ZH posts I earnestly try to digest but just don't get (like those charts above - I just stare and feel dumb).

I love what I do and I am blessed to be able to move around as much as I have (i.e. going from semi-conductor to telecom to reservation systems to insurance to ... you get the idea). This "travel" has given me very unique perspectives on many things. My point is that I think I have a damn good fundamental understanding of "information technology" or "humanities ability to process information as a society". I want to share something, which may or may not augment this post/thread:

Technology is a tool. It is neither good, nor is it evil. It is men who are good or evil.

What I fear is present here is a group of men/women who are developing warfare systems, without realizing this is what they are doing. These tools are for rape and pillage. But there is no code of honor here. There is no concern for collatoral dammag. I think the scope of what is being allowed, due to regulatory capture, is far more insidious.

Let me digress once more ...

There have been a couple times in my life when I whacked the <ENTER> key and was shortly filled with dread. The metal taste in your mouth, bowling ball in your stomach kind of dread. The kind of feeling you get when you KNOW you just fscked up bad or that bad things are imminent. Real bad things. Cost the company lots of money bad. In all cases, I was able to recover (and not get my ass fired). I have since developed a distinct habit of being quite paranoid and thoughtful when making changes to live software systems.

Along those same lines, how many gun owners will admit to accidentially discharging a weapon? I have. I did it once. I was at a range, pointed down, but I was used to lever action (I was young) and it was my first semi automatic. I lowered the barrel of the 30-06 after making my first shot and discharged into the ground teen feet in front of me. None of the men present said a thing; they must have seen my face (I knew gun safety basics). But it was that same feeling; I could have killed someone.

There will come a time when these men/women will set lose an algo, with the intent of profit, and this whole shit show will seize up and divide by zero. That <ENTER> will not yield profit, but will instead set forth a chain of destructive events that races out of control. For those in the control room of these RnP algo's, I hope you aren't sociopaths. I hope you get that sense of dread, of fear, of knowing what you did. I hope you go to your grave, cowards, hiding from what you have done like Nazis fearful of every door knock, of every phone call.

For those of you who are in finance/investment/daytrading/whatever; think long and hard about the writing on the wall. Are you satisfied doing what you do? Are you productive?

When you are satisfied, you are successful. For that is all there is to success is satisfaction. – Will Rogers

The Weimar had this same period, with so much brilliance at work shuffling paper. When the game is up, well, I guess I should say "if" the game is up, make sure you have a seat. I would further note, seats won't be for sale, you need to snag one before the music stops.

Best wishes to all,


P.S. I am an angry, alcoholic, hermitic, luddite, misanthrope. True story.

Thu, 07/07/2011 - 19:05 | 1434437 SubjectivObject
SubjectivObject's picture

Thanks for that.

Thu, 07/07/2011 - 19:16 | 1434458 disabledvet
disabledvet's picture

at least you're angry.

Thu, 07/07/2011 - 19:22 | 1434446 TrafficNotHere
TrafficNotHere's picture

I did not consider the possiblities of these algorithms being used as economic weapons.

Crap, want to take down a company stock, or a country's markets and following, its economy... hell, just insert enough mess into a market, flash crash here and there... so the people lose confidence...


Fri, 07/08/2011 - 05:34 | 1435348 Jacks Creation
Jacks Creation's picture

Slow wars, silent weapons.

Thu, 07/07/2011 - 19:15 | 1434454 UGrev
UGrev's picture

As as a software developer as well, I too stare at these graphs and just go "deer in headlights".. but I am on your page here, brother. It's software as a gun for sure! Sometimes we geeks just do shit because we can and don't think about what it can really do. Nuclear science followed a similar same path. A powerful and wonderful new technology that could be used for good or evil. 

I don't know about you, but I've been contacted by no less than 3 companies looking for algo devs. I told each to fuck off because I knew exactly what they were doing. Warfare indeed; and I wanted nothing to do with it. 

Thu, 07/07/2011 - 23:35 | 1434974 aerojet
aerojet's picture

I think you're wrong.  It's not software as a gun.  These people are exploiting a software system in ways it wasn't designed to handle except through regulatory oversight.  The regulators are not doing their jobs, however.  We could end algorithmic trading tomorrow if we wanted to by simply adding delays to all those orders so that it would be impossible  to HFT or front run orders.  The trouble is, they are the only ones left trading and whenever the algos shut off, liquidity disappears. 

I just don't see it as weaponized software.  It's more some kind of fodder for a Bruce Sterling novel or something. 


Thu, 07/07/2011 - 19:19 | 1434465 Fukushima Sam
Fukushima Sam's picture

Just so you know, it's okay to write the word "fucked" here.

And I know the <ENTER> key thing.  That is always a bad feeling.

Fri, 07/08/2011 - 09:42 | 1436105 SoNH80
SoNH80's picture

My old man once erased a custom COBOL program he wrote by hitting "Enter."  He spent Thanksgiving 1989 wandering the house drunk, in his bathrobe.

Fri, 07/08/2011 - 20:20 | 1438760 TheRipper
TheRipper's picture

THAT is funny!  Nearly a beer-through-nose incident. 

Thu, 07/07/2011 - 19:28 | 1434481 ebworthen
ebworthen's picture

Thanks Cooter.

Yes, technology is a tool and science is knowledge.  Do we use them for good or evil?

Nitroglycerine - deadly explosive or help prevent a heart attack.

Splitting the atom - killing billions or creating energy.

I suspect these gyrations are a form of warfare; either between trading desks or between nations.

They are probes for weakness and advantage, or for manipulators here or abroad. 

They are either nefarious for profit, or traps being triggered.

We can hope they are signs of regulation and sniffing out the bad guys; but based upon the actions of Wall Street and Washington 2001-2011 I kind of doubt it.

Thu, 07/07/2011 - 23:52 | 1435008 CrazyCooter
CrazyCooter's picture

Feynman talked about that some in his classic interview ... I originally got the link to the YouTube off of ZH ... I put it up on my blog ...

Most folks won't like my blog. I am a crazy nutjob that packed it up to Alaska, but I think I got a swell deal.

Feynman has it figured out with tech, listen to what he has to say.

My other favorite source is Danny Hillis (he has a great book called "the pattern on the stone" for any older geek wanting to pass down a bit of insight into the profession) who wrote an article called "The Big Picture" back in '99.

Much like Stewart Brand says over at ForaTV, there are patterns in nature whose cycles are measured in many generations. We are at an inflection point in our species history; I think the outcome will surprise everyone. It always does in these situations.



P.S. For geeks that miss their "elenco electronics kit" as a gift idea for nephews (and the occasional neice), check out Thames and Kosmos, which have the following:

Right now, I am the "best uncle ever".

Disclosure, I have one sister (no kids) and a brother (my niece and two nephews)

Wait til they get "panning for alaska gold" dirt for xmas this year! <cackles madly> Dirt. Water. Gold lust. Mom's house. GrandMa's live for this kind of history. My mom will have to set up a bucket station in the house so they can flip out and try to sort the gravel from the goodies with the pan I give them with the dirt. :-)

Cheaper than flying and lots more street-cred ... plus, gold bugs gotta start somewhere!

P.S.S. Feel free to steal these gift ideas. :-)

Fri, 07/08/2011 - 14:05 | 1437477 ebworthen
ebworthen's picture

Thanks, good stuff.

Thu, 07/07/2011 - 20:36 | 1434615 magis00
magis00's picture

Right on Cooter -- thanks for sharing. 

Thu, 07/07/2011 - 21:07 | 1434687 Mec-sick-o
Mec-sick-o's picture

From your post, you'll probably like to read some of Ayn Rand work or novels, specially her 2 bestsellers, if you haven't read them yet.


Thu, 07/07/2011 - 21:29 | 1434724 takinthehighway
takinthehighway's picture

Thanks, Cooter. Certainly food for thought.

Thu, 07/07/2011 - 21:47 | 1434764 tom a taxpayer
tom a taxpayer's picture

Good insights, Cooter. Thanks for sharing.

Thu, 07/07/2011 - 23:39 | 1434980 aerojet
aerojet's picture

You're a bit over-dramatic.  Firing a round into the dirt in front of you isn't the same as pointing the rifle in the wrong direction and doing same.  You have to break two of the rules for anything bad to happen. 

The whole runaway algo scenario you describe will not happen.  We've had flash crashes and all the exchanges do is roll back the trades and return everything to normal. 

Fri, 07/08/2011 - 03:37 | 1435285 StychoKiller
StychoKiller's picture

Perhaps, but what will the exchanges do when it's EVERY trade...for days/weeks on end??

Thu, 07/07/2011 - 20:00 | 1434538 rsnoble
rsnoble's picture

I'm there dude.

Thu, 07/07/2011 - 20:11 | 1434564 toady
toady's picture

that's what my wife calls me!

Thu, 07/07/2011 - 17:26 | 1434210 MsCreant
MsCreant's picture

+500 trillion, located in a dark cesspool, rotting somewhere in the Caribbean Islands.

Funny shit!

jm is bright but still thinks you can anticipate these thieves, go with their flow, and earn. I have been saying this, jm and I had a nasty exchange over it a long time ago (though I respect him a great deal) but the longer you try to play their games the more likely you are to get burned. IF THEY PISS YOU OFF, GET OUT OF THE FUCKING MARKETS KIDS.

Thu, 07/07/2011 - 17:31 | 1434234 jm
jm's picture

That wasn't so nasty, was it... oh wait.

So how ya been MsCreant?


Thu, 07/07/2011 - 17:44 | 1434273 MsCreant
MsCreant's picture

Doing better. House destroyed by a passing Tornado when tree hit it, doing the whole insurance, rebuild trip. Living in a rental. But we are safe and good and I am still prepping for the worst. Storm may be a blessing in disguise, I have been forced to reevaluate everything. 

You guys who do this and can make it work are so bright, I can't help but feel that your intellect and (no offense) balls could be better applied somewhere else, solving real problems instead of trying to outscam the scammers. I love your breed if I am honest about it, but kinda hate what you do. Don't take it personally (doubt you will).

Hope you and your family are well.

Thu, 07/07/2011 - 17:54 | 1434292 jm
jm's picture

Sorry of the circumstances, but happy that your spirit is solid.

You are very kind.  All work is nothing more than a spiritual quest to unlock hidden mysteries of the universe, some more mundane than others.

Good luck in all ways.

Thu, 07/07/2011 - 18:16 | 1434347 Marley
Marley's picture

Sorry to hear of your misfortune.  Glad to hear you and yours are safe.

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