• Marc To Market
    09/23/2014 - 11:39
    Is the Great Republic been on the verge of fragmenting as classic political philosphy said was the fate of all large republics?   
  • williambanzai7
    09/23/2014 - 11:10
    Some of you were no doubt aware that the latest round of Nobel Laureate ballistic mayhem commenced on the day after September 21: The International Day of Peace!

Dark Pools

Tyler Durden's picture

The Big Picture For Gold And Silver





With precious metals back at 4-year lows against a backdrop of gold migration from west to east, paper vs physical divergences, 'disappearing' Comex positions, dark pools in London, collateral grabs, and massive monetary policy extremist actions; we thought the following two presentations worth considering. Tocqueville's John Hathaway delves into the darker corners of today's gold markets while Mike Maloney reminds us of the big picture behind gold and silver as wealth insurance. The failure of a monetary system is never a smooth road - it is rocky and undulating, with twists and turns that don't appear on any map. But the destination is always without question, despite suppression efforts: Gold will inevitably respond to an expanding fiat currency supply. That simple.

 
Tyler Durden's picture

Have We Reached A Financial Singularity?





Encouraging and supporting asset bubbles is essentially the only force remaining to keep the system intact as we know it.

 
CalibratedConfidence's picture

Micro-Structure & Exchanges: A Complicated Relationship





Direct Edge wasn’t the only exchange, nor the first exchange, to do what it did, which was the creation of symbiotic relationships between exchanges and HFTs.  

 
Tyler Durden's picture

A Brief Note On The Difference Between Trading And Investing





Investing in oneself and enterprises one actively controls may now be the only legitimate deployment of capital that qualifies as an investment in the traditional sense - that is, capital isn't being risked in rigged gambling halls and Ponzi schemes.

 
Tyler Durden's picture

Flash Boys' Katsuyama Blasts Back At Ex-CFTC Chilton's "Incorrect Claims"





On July 7, Bart Chilton, a former commissioner of the Commodity Futures Trading Commission, wrote an article about high-frequency trading for the New York Times's DealBook. He argued, in effect, that because high-frequency trading has become so central to the stock market, it must be serving some necessary purpose. This is false...

 
Tyler Durden's picture

Frontrunning: July 29





  • EU finalises Russian sanctions as BP warns of impact on business (FT)
  • Geopolitical Risk Rises for Global Investors (BBG)
  • Jaded Argentines brace for looming debt default (Reuters)
  • In Argentina, Mix of Money and Politics Stirs Intrigue Around Kirchner (WSJ)
  • Mom ‘Trusting God’ for Ebola-Infected U.S. Doctor’s Life (BBG)
  • Thanks NSA: Tech Companies Reel as NSA's Spying Tarnishes Reputations (BBG)
  • Goldman unit eyes foray into China amid metals financing scandal (Reuters)
  • Cash out time: London’s Gherkin Tower Offered for Sale by Its Lenders (BBG)
  • Apenomics strikes again: McDonald’s Japan axes profit guidance amid food safety scandal (FT)
  • Do you see what happens Larry when you are the only USDJPY bid? Nomura Profit Falls More Than Estimated on Broking Slump (BBG)
 
Tyler Durden's picture

Barclays Wants Dark Pool Complaint Against It Dismissed, Says "Nobody Was Harmed"; NY Attorney General Disagrees





File this one for the bizarro files. After Barclays was caught lying to its "sophisticated" clients about how it handles their order following the lawsuit by NY AG Schneiderman, the bank, having suffered an epic 75% collapse of trading volume in its dark pool, has decided to fight back and earlier today filed a motion to dismiss the dark pool complaint against it. Its main argument, as reported by the WSJ, is that the attorney general's complaint "fails to identify any fraud, establishing no material misstatements, no identified victims and no actual harm." In other words, Barclays alleges the dark pool participants were smart enough to figure out Barclays was lying to them when it promised their order flow wouldn't be offered up to predatory algos.

 
Tyler Durden's picture

Lights Out At Barclays' Dark Pool: Volume Plummets By 79% From Highs





A week ago, when we commented on the latest publicly available data for Barclays' fraud-embroiled LX dark pool, whose volume as we reported had tumbled 37% in the week of the lawsuit announcement, we said that the downward volume trend "is about to get a whole lot worse for Barclays as the trickle becomes an avalanche." Sure enough, following today's reported by Finra's ATS database for the week of June 30, we find just that, and one can largely say lights out to Barclays LX operation, whose total shares traded plummeted from 197 million (and 312 million the week before) to a paltry 66.4 million, a two-week drop of 79% from its recent highs, putting it, in 12th total dark pool volume place, below ITG and above BIDS trading. So much for any ambitions of becoming America's top dark pool. Last on the other hand...

 
Tyler Durden's picture

US Offers Immunity To Junior FX Manipulators In Exchange For Ratting Out Their Seniors





In another indication that the ongoing FX probe is picking up steam, or at least preparing for primetime public PR consumption, the FT reports that US prosecutors are offering immunity deals to junior traders in London. The quo for this quid: rat our the senior staff involved in what has previously been reported to be years of currency manipulation (recall "How Wall Street Manipulates Everything: The Infographics"). And continuing the tradition of the DOJ only focusing on European banks, because apparently nobody in the US ever engaged in manipulation of anything, ever, the "US Department of Justice staff have flown to the UK in recent weeks to interview foreign exchange traders, who have been offered partial immunity in exchange for volunteering information about superiors, people familiar with the situation said."

 
Tyler Durden's picture

Gold Near 4-Month Highs As FOMC Warning Sparks Buying Scramble In Stocks





Stocks trod water for most of the day until the Fed said they would take the punhbowl away and that markets were complacent and that triggered buying in stocks, bonds, and gold. VIX was the catalyst (just as we saw at the actual FOMC meeting) and we would not be shocked to see a major volume dump after-hours in VXX (as dark pools unload their manipulations). The Dow ripped higher, desperate to reach 17,000 and prove that 'wealth' was back - but failed (although it did manage to get back to unch from the payrolls). Treasury yields limped higher, spiked higher on FOMC then dumped to the low yields of the day by the close (0-1bps lower on the day). Precious metals leaked lower into FOMC but spiked notably after with gold closing near 4-month highs. Oil was sliding into the minutes and did not bounce to close at its lowest in 2 months. VIX did its best to remind everyone that when the FOMC speaks, it's always good market news.

 
Tyler Durden's picture

What Has Driven The VIX Higher In The Past?





A nervous peace prevails in the financial markets as central banks sit on their throne, fingers at the ready on the liquidity switch. As UBS' Bhanu Baweja notes, most volatility buyers have been 'rolled' into their graves. As they have explicitly targeted risk premia in addition to rates, a lot more hangs on the monarchs of monetary policy today than it has in previous cycles. While growth and inflation are both low, they are not necessarily uncertain; and although every crisis is different, certain patterns tend to repeat and certain events have reliably driven volatility higher.

 
Tyler Durden's picture

Why An End To Dark Pools Would Be A Clear Nightmare For The Fed





Be careful what you wish for. As the Fed imbibes a sense of confidence in its ability to manage any bumps in the road on its perpetual bubble-blowing mission through the use of macro-prudential policies (big words that truly mean nothing) as stock valuations surge and the repo market is experiencing severe problems; it can always point to VIX as an indicator that all is well in the world and no real risk exists. The problem is - the world is beginning to wake up to the 'odd' micro-structure of the US equity markets and how 'dark pools' are beginning to dominate trading volume. As Barclays faces major legal problems over its alleged dark pool lies, lies, and more lies, the Fed must be growing concerned... as the following chart shows JPMorgan indicates there is evidence of an inverse relationship between equity volatility and the share of off-exchange trading.

 
Tyler Durden's picture

The Impact Of The World Cup On Stock Markets, In One Chart





What "harsh weather", aka completely unpredictable cold snaps and snow during the winter were to Q1 US GDP, which somehow cratered from an expected 2.5% increase to a -2.9% collapse (a $200 billion negative swing in the US economy due to weather, let that sink in for a second), the Brazil world cup may be to the stock market. At least that is the following chart from Bloomberg, highlighting the "World Cup Syndrome" shows.

 
Tyler Durden's picture

Caught Rigging Gold And Dark Pools, Barclays Begs To At Least Keep FX Manipulation





2014 has not been kind to Barclays: first, the UK bank proved countless goldbugs right when it was first caught rigging the gold market (the first documented case, not the last) and a few short weeks later, the New York Attorney General crucified the bank for misleading its Dark Pool clients, and letting their order flow be, quite lucratively, front run by "aggressive" predatory algos - something it explicitly had stated it won't allow. So with one after another revenue stream crashing before its eyes, what is the Chairman of the scrambling bank to do? Why beg to at least keep the FX manipulation going. What follows is not from The Onion.

 
Tyler Durden's picture

VIX-Manipulating HFT Algo Is Booted From Dark Pool, Exposed For Whole World To See





VIX was monkey-hammered lower once again today, lifting stocks vertically to Russell 2000 record highs and The Dow within a point of 17,000. The question is who (or what) is doing it. Nanex seems to have found out who... It appears the un-visible hand of VIX manipulation (that we have shown previously) has been forced into the open public markets as Barclays goes dark. Simply put, massive bursts of 1-lot TVIX orders flood and delay the markets enabling HFTs to manipulate the tail that inevitably wags the market (via VXX, SPX options hedges and leverage) and now that the dark pools are disappearing, we see it all in real-time.

 
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