The first casualty of the Obama "transition" is now known: SEC chair Mary Jo White, under whose watch the market became an momentum-igniting, stop hunting mess thanks to the limitless proliferation of HFTs, whose lobby had succeeded in thoroughly penetrating and capturing the market regulator, is leaving at the end of the Obama administration.
"The group has repeatedly made bullish announcements about OPEC intervention during periods of low liquidity (e.g. US holidays), and whenever short positions become large. If prices continue to slip, the chances for bullish OPEC headlines grow, which could lift prices briefly even if there is no follow through." - Morgan Stanley
"The research shows that HFT market makers in both Bund and DAX futures markets temporarily reduce liquidity... the different behaviors of active and passive high-frequency trading firms indicate a heightened risk of periods of short-term excessive volatility, which could encourage market upheavals as far as flash events."
A fascinating study reveals that heavy rainfall literally adds to market liquidity, for one simple reason: it reduces the overall adverse influence of HFTs, predating market orders, and soaking up what little liquidity is left.
Navinder Sarao, the British futures trader accused of casuing to the “flash crash” of May 2010, is to face extradition to the US after losing a legal battle in the High Court. His offences carry sentences totalling up to 380 years.
"The advent of non-bank liquidity providers such as HFTs has reduced bid ask spread and increased market efficiency in FX markets, but at the cost of lower market depth and withdrawal of liquidity provision in periods of stress."
"QE need not be confined to bond instruments in our mind. By limiting themselves to bonds, central banks are indeed deemed to face quantitative constraints given declining government bond issuance even as spread product issuance has increased" - JPM
The SEC announced that BofA/Merrill Lynch agreed to pay a $12.5 million penalty for "maintaining ineffective trading controls" that failed to prevent erroneous orders from being sent to the markets and causing at least 15 mini-flash crashes between 2012 and 2014.
"I’m now firmly in the camp that not only will the Fed not raise this year – they may not raise again for years. For they are not only “painted into a corner” via their own misdoings – they are chained there by Wall Street. They’ve missed the window..."
April 2015, Zero Hedge: "Gregg Berman will find a hospitable and well-paid position after spending 6 years defending the well-paying HFTs lobby. In all likelihood Berman will join the NY Fed's shadow trading desk and the world's most leveraged hedge fund, Citadel itself." September 2016, WSJ: "Gregg Berman joins Citaldel."