High Frequency Talking: Santelli Vs Pisani

Tyler Durden's picture

As the day began with every Joe, Jim, and Harry claiming to be an expert in HFT and having prophesied all of this long ago, we thought it would be intriguing to track just how well the retail investor was edumacated on the 'rigging of markets'. It didn't take long before Bob "I'm not trying to be an apologist for HFT, but..." Pisani explained that investors should not be concerned and another talking-head popped up on CNBC to proclaim, "being a little bit front-run is not a problem... remember, it's legal." Henry Blodgett made his 'takes one to know one' bubble perspective adding confidently that "the concept that the market is rigged is crazy." Crazy indeed - until the FBI gets involved. But we leave it to Rick Santelli who summed it all delightfully in a death-match with Pisani, "I'm sorry but if a large group of people can take that one cent all day long, day-in and day-out, then there's a problem."

 

Damage Control... begin... Cramer "we railed against them and we exposed them over and over" - hhm...not sure we remember the "railing against them" or the "exposing" of any negative implications of them but go on.... And then Cramer goes on to rewrite history...

"I had maybe 100 shows devoted to it on Mad Money saying it's wrong, saying basically it is rigged without using the word rigged. It's interesting it got on 60 Minutes with a powerful author, and people are shocked."

 

 

And The Appetizer... "Rigged? For sure it's an overstatement! ... it's only a penny..." Sure, it's only a penny - so just what is the size of arb that is illegal for front-running.. and of course here's the kicker, "we want more confidence in the US stock markets"

 

The Palate Cleanser - Pisani and Sully explain how it's all ok... "not that we're defending HFT or anything" but stay long and don't worry about that scary man on TV talking about rigging markets... (the caveats and qualifiers in each and every sentence alone are worth the price of admission)

 

And the main course of the evening! Beginning at around the 2:00 mark, Santelli has enopugh of listening and pitches in as Pisani and the crowd

Hey Bob, by the way, usually it's the Fed everyone has said rigged the market. What about the Lewis' allegations flying around?

 

Pisani: I have a laundry list of things I'd like to see change but that's different than claiming the market is rigged.

 

Santelli: You have been getting a lot of kudos and I thought what you wrote was phenomenal - BUT...

 

Santelli: When I listened to Michael Lewis, the implications he had was more on the side of the HFT. It is rigged for them to make money and skim that one cent just like you said. I didn't get the impression he necessarily said the whole system was rigged, but then again you can't be just a little pregnant...

 

Pisani/Other: But Rick, you're a sophisticated trader. That is slicing the onion too thin. That's not what the public is going to come away thinking. The public will say, honey, it's not safe to invest in the market. He told us it's rigged. The implications are somehow the average investor, it's not safer for them to be in the market. That's not true.

 

Santelli: But the average investor thinks the SEC is watching out for the marketplace. I'm sorry but if a large group of people can take that one cent all day long, day-in and day-out, then there's a problem.

 

And Scene...

 

It seems more damage control is coming... but don't worry retail investor, CNBC has your back...