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...

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CrashisOptimistic's picture

 

I heard a discussion elsewhere.  It went like this.

"Sure.  This stuff can move the market over the course of a day.  But to suggest that it has lifted the market for five years is silly."

The reply was:

"If it moves the market over the course of a day, and then the next day does the same thing and the next day and the next day, every day -- doesn't that add up to five years?"

Serfs Up's picture

It's really, really simple....how much did the HFT firms make over the past 5 years?

That is the cost of having them around.

Period.

They skimmed billions and added nothing useful to the ""markets"" (which now require double quotes because they bear no resemblance to the word associated with them).

They are allowed to exist by the regulators, and the owner class (who also pay for the usefully ignorant and distracting comments from people like Blogett) because TPTB can use them for their momentum ignition rallies out of nowhere, which would otherwise be difficult to perform using plan oild humans.

The cost of having a controllable market is a few billion skimmed each quarter.  It's a steal of a deal when you print money out of thin air.

Berspankme's picture

Haven't watched that channel in a long time. Still would like to schtickel that Mandy Drury but I digress. Pissani is a douchebag, Cramer is a douchebag and where is that little brit assclown Hobbs? Fuck Sully, he's a pindick little fuck. CNBC is like watching a cartoon on Saturday morning. Did I mention I'd like to play hide the weenie with Mandy?

barliman's picture

 

Billions? They wouldn't do this for billions ... they were making billions under W.

Their Chosen One was put in place so they could COLLECT (no risk involved) TRILLIONS from the Fed, ECB, PBOC, etc.

Pop Quiz: What's the interest on the Fed's $ 4.7 trillion at 5% versus the 0% they've been charging? That's their chump change.

Monkey spanking? Doesn't YouPorn have a comments section?

CNBC is in the propaganda business. If their propaganda continues to fail ... they will be replaced.

Sudden Debt's picture

1 cent may not look much

BUT WHEN THERE'S 100 HFT TRADERS TAKING 1 CENT YOU LOST ALL YOUR MONEY!!!

AND THAT'S WHERE THE QUESTION IS!

IT'S NOT JUST ONE CENT. WHAT IF 20 HFT TRADERS ARE TAKING 1 CENT ON YOUR TRADES?

THAT'S 20 CENTS!!!!

AND WHAT IF YOU BOUGHT 1000 SHARES? THAT'S 200 DOLLARS!!

I DON'T LIKE ANYBODY STEALING 200 DOLLARS FROM ME!!!!

SO DON'T DOWNPLAY IT TO "1 CENT!

GetZeeGold's picture

 

 

Bob Pisani is still alive?

 

Well that's good.....I guess.

TruthInSunshine's picture

cnBSc Kabuki Theater for the ever shrinking pool of sheeple retail "stawk investors."

Philalethian's picture

Any one would be foolish to continue to play games of chance against machines. Time to just go home and say no more.

When the media and the system team up to cheat, steal, and repetitively harvest from the criminality and corruption, it is only an indicator of a larger problem. Until the head of the evil hydra beast is put to rest, the machines will keep on going, and someone will be counting.

Just look at the examples the supposed leadership sets down for any semi-conscious 12 year old to see plainly as the wickedness it is, yet the real problem is, there are no men left to stand up to the plate and DO THE RIGHT THING to stop the criminality. No one cares to end the evil that is ending them all.

Sad, darn sad to be a modern observer in the wacky-world where the money masters know the system is "rigged" and still play the daily griding game over and over that continues to perpetuate the cheating, which they are now complaining about. Who the heck wants to trade with a bunch a cheaters, and liars anyways?

http://www.youtube.com/watch?v=z99iVXJ8OtA

 

 

Ironmaan's picture

Pisani and anyone saying its only a penny is an ass. If its only a fucking penny then the HFT's should stop it ASAP so as to maintain confidence in the markets. Its only a penny. Fucking thieves.

TruthInSunshine's picture

It's "only" a penny multiplied by many billions of times per day, as in hundreds of millions of dollars per day, as in billions of dollars per month, as in tens of billions of dollars per year.

And besides, having a select few "market participants" be able to see the bid AND ask before orders are transacted, and then parastically shaving those trades is like, totally efficient & Kapitalism at its finest.

rbg81's picture

From "Office Space":  It's like taking a penny out of the "pennies for everybody" tray--but we take it out of a much bigger tray and we do it a couple of million times per day.

Fred Hayek's picture

Oh, like Superman III?

10mm's picture

Two Italians.  One docile,  the other Siciliana. 

fonzannoon's picture

OH. MY. GAWD... can we please put this issue to bed already? 

Nobody cares. As a matter of fact, this whole stupid hft story only proves one thing. As long as the market is rigged to go up, retail will happily get sexually harrassed on the way up. Just don't rig it and have it go down.

 

NoDebt's picture

I think it was about a year ago, maybe two, Sandy Weil came on CNBC and basically said "Break up Citigroup.  I was wrong, the model doesn't work, it's too complicated for anyone to manage"  Given he was the architect who built that Rube Goldberg monstrosity in the first place, everyone fell out of their chairs.  One of banking's own had turned on them!  (The horror, the horror!).

THIS is new.  THIS was a game changer.  NOTHING would be the same after that for the banks.

Flash forward a month from that point... nobody even remembers he said it.  It's total effect: ZERO.

NidStyles's picture

Words do little when the ones being opposed have the "legalized" control of everything that moves.  

Troll Magnet's picture

That's because back then, like now, nobody watched CNBC.

RaceToTheBottom's picture

Sandy Weil was having trouble sleeping that night.  Penance is a lot more than one interview.

homiegot's picture

Kramer is a POS.

sunnyside's picture

He knows, and it gets him off.

FieldingMellish's picture

That is being unkind to shit.

 

Meanwhile. Gold spike down. BOOM! $1275 is the level to watch. Should that break meaningfully, say we close the week below that, then $1180 is on the cards. If $1180 does not hold for the triple bottom, $1050 is the target and Goldman Sachs wins. If that happens we should be back above $1100 very quickly. VERY quickly.

CrashisOptimistic's picture

Why?

Why do gold nazis decide in utterly bizarre fashion that articles having NOTHING whatsoever to do with gold deserve gold comments.

toys for tits's picture

Because it's fun to purchase when it's on sale.

KickIce's picture

It has everything to do with gold, without the QE/HFT "markets" tank and there is a mad scramble for gold.

sunnyside's picture

So many of them believe that they are entitled to it.  Remember, its God's work.

Kaiser Sousa's picture

all day long i watched those piece of shit CNBULLSHIT cocksuckers attempt to dismiss the impact this HFT Fraud Market is having on all retail investor/the 401k trapped lab rat citizenry who never had a clue...

especially Bob PISSon - me Pissani constatly sayin how the mom and pop investor had nothing really to fear and that all is well....it was fucking enraging...

too bad though..cat out of bag and has been but even  "Joe Q. Moron" is scratchin his ass now and sayin "what the fuck - man????"

told ya'll...the MoneyChangers CONfidence house of cards has fallen...tic, mother fuckin toc'............

keep stackin...i will be after the phony paper price attack - when tomorrow?????

OldPhart's picture

Stopped ALL 401-k contributions in 2008.  Watched that nest egg swell from unbelievable rates, over 30% last year.  There is nothing real about this.

CrashisOptimistic's picture

Find a way to own farmland.

It may be confiscated like anything else, but at least it makes sense.

fonzannoon's picture

I'm working on a plan to confiscate farmland. It just seems like a lot less work.

UselessEater's picture

You got some serious competition in high places, my friend.

WhyWait's picture

What effect would the "Robin Hood Tax", say 0.25% on all stock and bond transactions, 0.1% on all derivatives transactions, have on high frequency trading, assuming it could be effectively collected?

I would guess it wouldn't be a popular on this list, but it could raise a whole lot of money to spend back into the real economy, for example on infrastructure.

Just sayin'

FieldingMellish's picture

There would be an exemption for high frequency transactions. Only the little people pay tax.

 

PS The hummingbirds have returned!

Blankenstein's picture

Yep just kill the private sector employees that have to save and invest because they have NO PENSION.  This wouldn't be applied exclusively to the 1%, it would be applied to all the rest of us who have to try and save enough to last throughout our senior years.  

Seasmoke's picture

Now I understand why they never got rid of the penny !!

chinoslims's picture

There is always a penny to be made somewhere.

 

NoDebt's picture

Not when stocks traded in sixteemfs.  Not that many years ago.

Theta_Burn's picture

Sorry Rick.. another soundbite FAIL, this shits been going on for yrs. NOW you think its a problem?

Good news though Rick, of all the chodes in those vids you were the lesser jagoff..

gmrpeabody's picture

Actually..., he's been harping on it for years.

NDXTrader's picture

Can your broker do it? Of course not, why? Because everyone who's not knee deep in conflict of interest knows it's wrong to trade on that information. The fact anyone can defend it shows how far into the Wall St matrix they are

NoDebt's picture

HFT exists because regulators ALLOW it to exist.

Regulators allow it to exist because they are lobbied by large financial interests to allow it to exist.

Large financial interests want it to exist because without it 70% of all trading volume on the exchanges evaporates.

Without 70% of the exchange volume existing, the exchanges all go broke.

Without the exhanges the big banks and other financial interests (The Fed) have no place to play the REAL GAME of "hide the sausage" that goes far beyond chiseling a penny off of every trade.

CrazyCooter's picture

THAT is interesting ... anyone in the thread seen a chart of exchange volume with HFT churn netted out? I don't know much about this particular subject, but I think ZH harps from time to time on lack of volume.

If the Fed is on track to own the Treasury market, maybe their henchmen are also on track to own the damn stock market too.

I think that would be an interesting post if someone did it up properly. Tylers?

Regards,

Cooter

Retronomicon's picture

If a one cent skin isn't rigging, is five cents?  It's really not the amount that matters, but the principle.  

NOZZLE's picture

I heard Limbaugh discussing this and I was frankly shocked that he took the attitude of "okay you were front run by a broker dealer who was holding your market order who first executed for himself and then sold his position to you taking off only a few cents.  I frankly think he was confused and did not understand how insideous that practice is.  

I was a victim of front running by Paine Webber floor traders in the S&P pit back in the late 80's, their attitude as recorded by a device hidden in an FBI agents class ring was "Fuck Paine Webber's customers".  They would see a bid stack of market orders hit the floor and instead of executing at market, they would buy, cause the market to go up a tick and then execute the customer's order from what they had just bought or sold.

ILLILLILLI's picture

Rush is fine with it since they only "stick it in a little bit"...

ebworthen's picture

It is rigged you dolts - you are just desperate for Mom and Pop to think it isn't.

fonzannoon's picture

Eb fwiw I totally disagree. You can tell from these clips and many others that CNBC is just dying to come out and say "Of course it is rigged you fkin morons! Now get in! WTF are you waiting for!"

ebworthen's picture

I can sse that, a duual-pronged approach.

nmewn's picture

"...and another talking-head popped up on CNBC to proclaim, "being a little bit front-run is not a problem... remember, it's legal."

So was slavery.