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High Frequency Terrorism

CalibratedConfidence's picture




 

Given the Presidential Twitter attack, this material from July 14th 2012 may be relevant for some:

There is a real fear in the markets now and it is not being caused by Europe, LIEbor, Linda Green, London Whales, etc.  The fear is focused on the structure of how prices are discovered and assets/risk are transferred to willing participants.  Bad algorithms have been treacherous in the past, to put it lightly.  The debate has been focused so much on the ways exchanges have destroyed their reputations by selling enhanced data feeds with your trade information in it.  Every time you trade, your order is routed to a given location to be matched and whether it executes AON, filled 100 blocks in 5 minute intervals at VWAP, cancelled and readjusted stop limit, adjustments to limit order prices/sizes, etc, is recorded and given an account number. 

 

This data is grouped and sold by exchanges and market centers to participants with computer capable of processing and utilizing the encoded "enhanced data feed".  This insight into quantifiable market participant behavior is on a material level and could be argued as being insider information.

 

Now imagine the smartest minds we have focused on and picture their intent not being keen on ROI but on chaos and havoc.  Imagine someone has all this information regarding given perceptions of all participants within the US capital market structure, from equities to futures to commodities to currency to bonds for any given millisecond.  Imagine that the Russian gov't, Chinese gov't, and Iran gov't had access to this information and in a coordinated effort decided to attack and manipulate the US markets through high speed access and rapid flows of orders that could trick machines and send errant signals regarding the reality of the market at any given time. 

 

The recent mess with Facebook and BATS have shown the vulnerabilities of our exchange centers and regulators.  Most of the national focus here in the US has been portrayed as something that is contained with our boarders, however should something more sophisticated (Stuxnet and Flame?) be deployed within our market structure (perhaps through those shell brokerages tied to Al-Queada we've heard about) only then will the focus change.  We need to recognize and consider the probability of something like this happening.

 

Page 2, Paragraph 3 of Economic Warfare: Risks & Responses:

Perhaps its time we pressure the CFTC and SEC to reach a definition already on HFT and get their shit in line.  This whole mess of a capitalist market is primed to collapse at any moment.  No one is ready, not the exchanges, not the regulators, not the participators, not the governments, no one.  We have no back up should assets prices drop like they did on May 6, 2010 and not rebound.  Imagine more MFG's and PFG's vaporizing client money as commodity prices go haywire, like the Oil Complex did.  As "normalcy bias" continues to grip those involved in the debate, we must focus on the shared vulnerability to damage by a rouge nation or coordinated behavior by nations fighting a battle that isn't on a the typical battlefield.  Picture World War 3 being a financial war, not a weaponry war.
 
Think about it.
 
 

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Mon, 10/28/2013 - 21:11 | 4099792 rsnoble
rsnoble's picture

Rogue Nation? The US?

Mon, 10/28/2013 - 17:56 | 4099131 Son of Captain Nemo
Son of Captain Nemo's picture

If you make the deliberate choice to do nothing about this Fukushima Is Here

Then how would you expect a Government that uses the same terrorists to promote war including attacking it's own in order to yield ever larger defense contracts and homeland security boondogles that we keep witnessing time and again since 9/11 to cease?

The technology for robust internet security has been out there for more than 15 years including DNS SEC and IPv6 with mandates by the Federal Government to implement them in 2007 -Why haven't they?...

Mon, 10/28/2013 - 17:43 | 4099110 Full Patata
Full Patata's picture

Shock & Awe. A financial 911-like event would be a(nother) carte blanche

Mon, 10/28/2013 - 16:16 | 4098824 monad
monad's picture

Irregular financial warfare, as opposed to 100 years paying tribute to the FR despots? 

"If my sons didn't want war there would be none." - One of Mayer Bauer's wives

The IRS/BATF is an agent of a foreign corporation that has been inflicting soviet demoralization measures on working Americans since 1942. QE is an additional crime that includes those who do not pay tribute on income. The federal government has been engaged in high treason continuously since 1914. WTFU!

Mon, 10/28/2013 - 15:10 | 4098572 lasvegaspersona
lasvegaspersona's picture

This implies a way out....

Mon, 10/28/2013 - 16:57 | 4098991 Tall Tom
Tall Tom's picture

I did not gather that. What I read is that there is a substantial risk. I read into it that it will be exploited when the time is advantageous for the attack.

 

My bet is that the target is Japan. If Japan falls then the rest of Western Banking will collapse like the House of Cards which it is.

 

There is no way out. You know it and I know it. There is no way out.

 

Get Gold and Silver. That may not even be enough. (Food is perishable and only lengthens your ultimate demise if it melts down completely, preppers. You must be able to replenish your stocks and sustain.

 

Anyone in a city, as myself, is doomed unless we can escape. Gold and Silver might provide for that escape.

Mon, 10/28/2013 - 20:15 | 4099605 WhackoWarner
WhackoWarner's picture

Escape?  Well I would suggest, even though uncomfortable to the sun tan crowd....that Alaska;  Parts of BC.  Northern Canada.  Yukon.  NWT.

 

Mon, 10/28/2013 - 21:09 | 4099788 Kahn E. Lingus
Kahn E. Lingus's picture

Absolutely correct. When we go mad max, you want to be in the most inhospitable place you can find to wait for the die-off. While the packs roam the south during the January, not so much in the upper latitudes.

Mon, 10/28/2013 - 21:40 | 4099874 WhackoWarner
WhackoWarner's picture

These places may be safe not due to what you perceive.  These "inhospitable places" have nutured a culture and flowing life for centuries.

 

So should you even think to escape to any of these places; bring our A game not any more "conquering BS". 

 

That happeed already with very little respect.  Bring your talent yeah.  And leave your attitude behind.

Mon, 10/28/2013 - 20:12 | 4099594 WhackoWarner
WhackoWarner's picture

I think you are right.  And a city is a poor spot to be unless you have gardens that produce food and a chicken coop.

And running to many places just puts you into another "harms' way. 

 

Maybe stock up on gin.  Gold and silver may take you places but where do you go?

 

Mon, 10/28/2013 - 15:08 | 4098568 theprofromdover
theprofromdover's picture

Didn't the munificent Squid admit in court that it had the bestest HFT software to manipulate the markets -lucky it wasn't in the wrong hands.

Mon, 10/28/2013 - 15:25 | 4098616 logicalman
logicalman's picture

If it's in the tentacles of the squid it IS, to mix terminology a bit, in the wrong 'hands'

Mon, 10/28/2013 - 15:05 | 4098553 Tall Tom
Tall Tom's picture

Watch Japan as that is the lynchpin where it all will crumble. They are the first to open and an attack on a Sunday Afternoon will bring a large delay in the time to respond for the USA.

Tue, 10/29/2013 - 05:20 | 4100578 sky wing 2010
sky wing 2010's picture

many already said that Japan will collapse around 2015~2017.

Mon, 10/28/2013 - 21:18 | 4099814 Kahn E. Lingus
Kahn E. Lingus's picture

It happened once before:

Sunday December 7, 1948, 12:48 pm New York / Washington time

Tue, 10/29/2013 - 03:44 | 4100517 Tall Tom
Tall Tom's picture

Duplicate

Tue, 10/29/2013 - 03:42 | 4100516 Tall Tom
Tall Tom's picture

Seven Tears earlier.  Isn't it funny that History rhymes?

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