This page has been archived and commenting is disabled.

Did Cliff Asness Just Blame Zero Hedge For Starting The Anti-HFT Movement?

Tyler Durden's picture




 

Five years ago, we were the first to bring the world's attention to the staggering profitability of several firms that engaged in 'high frequency' trading that presented themselves as 'liquidity providers' and suggested (in our ever so humble way) that mark liquidity was in fact shrinking and this could lead to a 'black swan of black swans' long before the flash crash was even dreamed of. Fast forwarding to today, after hundreds of articles, not only is the mainstream "getting it" but such behemoths as Cliff Asness - who happens to run one of the world's biggest quant funds - are forced to pen a WSJ op-ed to explain it's all a fallacy and blame a lowly blogger (or digital dickweed) for starting all this naysaying five years ago.

Asness explains in the WSJ Op-Ed...

A few nights ago, CBS's "60 Minutes" provided a forum for author Michael Lewis to announce that Wall Street is "rigged" and for the sponsors of a new trading venue called IEX to promise to unrig it. The focus of the TV segment was high-frequency trading, or HFT, an innovation now over 20 years old.

 

The stock market isn't rigged and IEX hasn't yet generated a lot of interest. In our profession, what we saw on "60 Minutes" is called "talking your book"—in Mr. Lewis's case, literally.

Forgive us for a moment as we note, in passing, that for someone to accuse a person of talking their book, when that someone has a more than vested interest in computerized, "quant" trading whose success is a function of its secret sauce remaining forever in the dark (Mr. Asness may deny running a HFT shop but there is of course no way to verify this externally) and where the lines between one HFT strategy and another is a very thin if lucrative one, is somewhat hypocritical.

A gentle reminder of what the HFT firms do here

But Asness puts the blame for this tornado of trading tumult squarely at the feet of...

The onslaught against high-frequency trading seems to have started about five years ago when a blogger made a wildly exaggerated claim about one firm's HFT profits.

So there it is, thanks to a blogger (Zero Hedge) five years ago, the reality of the US equity market's 'rigged' nature has been dragged kicking-and-screaming into Joe "I'm long TWTR" Sixpack's living room by Michael Lewis, Brad Katsuyama, Nanex, Themis and a host of other reality-seekers.

Of course, we'll give the last word to Mr. Asness:

Our bet is that high-frequency trading comes out on top as it offers more investors better execution. But we have zero problem being proven wrong by the marketplace.

 

How HFT has changed the allocation of the pie between various market professionals is hard to say. But there has been one unambiguous winner, the retail investors who trade for themselves. Their small orders are a perfect match for today's narrow bid-offer spread, small average-trade-size market. For the first time in history, Main Street might have it rigged against Wall Street.

Indeed... or perhaps, just perhaps, Asness realizes that Goldman is on to something and his 'firm' and its kind are about to scapegoated out of existence.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 04/01/2014 - 22:30 | 4615947 NoDebt
NoDebt's picture

Stop it.  I'm getting all misty.

Tue, 04/01/2014 - 22:31 | 4615950 swanpoint
swanpoint's picture

U Bitchez!

Tue, 04/01/2014 - 22:33 | 4615953 massornament
massornament's picture

Yeah... I blame you guys too... YEAH TYLERS!!

Tue, 04/01/2014 - 22:40 | 4615960 wee-weed up
wee-weed up's picture

Three cheers for the Tylers!

Now watch out for drones, guys!

Tue, 04/01/2014 - 22:44 | 4615976 ZerOhead
ZerOhead's picture

"Our bet is that high-frequency trading comes out on top as it offers more investors better execution"

 

So if I understand this correctly... these HFT outfits spend billions each to compete against themselves for micro-second advantages to better execute more investors? 

Yup... that sounds about right.

Tue, 04/01/2014 - 22:48 | 4615987 HoofHearted
HoofHearted's picture

So let me see if I get this right?

There's one guy talking his book against another guy talking his book...and then there are the Tylers who don't seem to gain too much by writing about HFTs...well, except that we all fall for that shit and then they have lots of loyal readers to see the chicks in t-shirts that we're supposed to buy through GoogleAds. (Have any of you bitchez bought any of the t-shirts? Anyone else want to buy the girl that takes a pill to forget about caring or whatever it is she was doing? I thought so.)

So, who you gonna trust?

Tue, 04/01/2014 - 23:02 | 4616008 francis.sawyer001
francis.sawyer001's picture

There is a lot of comedy here, but the funniest part is that anyone that mattered in this game would waste one nano-second on this site of adolescent circle-jerkers.

*

Most of the commenters now have a 2+ year life and essentially are the same person saying the same stuff, over&over,

All is a fraud on HFT yes, but all is a fraud on ZH as well to feed shit to google and generate nickels.

Funny that 'truthiness' gets you banned on ZH,

But fuck, its hypocrisy to point to the flaw in others, when your own shit stinks so bad.

Tue, 04/01/2014 - 23:06 | 4616019 Skateboarder
Skateboarder's picture

I said all I had to say, i.e. I lamented. Then I shat the fuck up. Now I just make silly comments.

All is null and void except the things you produce and the memories you make happen.

Tue, 04/01/2014 - 23:19 | 4616054 mickeyman
mickeyman's picture

Tyler keeps misspelling "Assness"

Wed, 04/02/2014 - 01:58 | 4616268 fonestar
fonestar's picture

And fonestar is the biggest virtual dickweed on the digital dickweed blog.

Wed, 04/02/2014 - 10:45 | 4617259 El Diablo Rojo
El Diablo Rojo's picture

To Hoofhearted:  I have purchased several t-shirts for the wife and I from that website.  Yes, I find them funny.  But I also stopped all the popup ads too.  Someone posted Ghostery and I have it on every computer. 

Being on a website you are bitching about, that's really funny.

Tue, 04/01/2014 - 23:21 | 4616057 NoDebt
NoDebt's picture

Ok, Frank.  Fair enough.  So I gotta ask... what are you still doing here, then?

Tue, 04/01/2014 - 23:30 | 4616078 Skateboarder
Skateboarder's picture

Fascination with the abomination. Even hedgless_horseman is watching from the sidelines, I'll bet. What happened to our fearless Texan friend?

Wed, 04/02/2014 - 10:40 | 4617243 El Diablo Rojo
El Diablo Rojo's picture

I miss his garden/ cheese/ dinner plate pictures.  They were so out of place that they fit perfectly.

Wed, 04/02/2014 - 15:24 | 4618334 fedupwhiteguy
fedupwhiteguy's picture

Ditto....I was wondering the other day where he went too. I've noted before that quite a few of my favorite commentators have been leaving the confines of this site. I miss them all.

Tue, 04/01/2014 - 23:30 | 4616079 tarsubil
tarsubil's picture

It's like I just saw a ghost.

Wed, 04/02/2014 - 09:57 | 4617064 MontgomeryScott
MontgomeryScott's picture

Who put that crab there?

What crab?

That one, right there! Crabs are smart. They always work in pairs!

http://www.youtube.com/watch?v=RnoPZqC6Bfs

Frankly, I enjoy ads with women wearing skimpy t-shirts, unlike some (who enjoy ads with men wearing leather, who usually post using names close to, but not the same, as those whom you might recognize; from their official desks in the bunkers of Haifa and Alexandria).

You think you saw a ghost, but, um, you saw an AVATAR of them.

Wed, 04/02/2014 - 01:55 | 4616263 hobopants
hobopants's picture

I love the entitlement mentality seen here. What makes you think whoever runs this thing owes you an ad free open forum?It's their site and they can run it how they like. You don't like it? The internet is a big place, go elsewhere. They seem to be doing a good job respecting the first amendment judging by the fact that the obnoxious shit you're posting is still here.

Wed, 04/02/2014 - 10:04 | 4617098 MontgomeryScott
MontgomeryScott's picture

http://www.zerohedge.com/users/francissawyer001

So, one week 13 hours...

IT ISN'T HIM.

Don't feed it.

Wed, 04/02/2014 - 02:26 | 4616312 infinity8
infinity8's picture

I'm w/Skateboarder and, nickels is better than pennies, no?

Wed, 04/02/2014 - 08:28 | 4616684 Agstacker
Agstacker's picture

Have you never heard of ad blocker you fucking moron?

Tue, 04/01/2014 - 23:42 | 4616109 dogbreath
dogbreath's picture

my dog

Tue, 04/01/2014 - 22:51 | 4615988 fonzannoon
fonzannoon's picture

some notable quotes from the article 5 years ago

"The market is going up until it isn't. That's all I know."

 

"TD, your observations may be correct, but if you follow them through to the ultimate conclusion you'll understand why it doesn't matter. 

The US stock market is too big to fail. It is our bank, our life insurance, our retirement plan, our college savings fund, the retirement plans of our police forces and our firefighters. It's our hopes and dreams and worst fears all rolled up in a big ball. That's how this depression is different from the 30's. This time the stock market can't be allowed to drag along the bottom for a couple of decades, or even for 5 years. 

Inflation of course is worse, but it's like a force of nature in the eyes of the public. Everyone will get their payoff and they'll gripe about the fact that it buys nothing. But that's minimal compared to the outrage they'd feel in an outright default. When it comes to theft, people think in nominal terms, not real terms. 

So when push comes to shove, our government will use Goldman and others like them to sustain the stock market, at any cost. It's just dollars. And if the players don't like their marching orders, well then, as Mr. Obama said, it's pitchfork time."

Tue, 04/01/2014 - 23:02 | 4616000 ZerOhead
ZerOhead's picture

Actually if I remember correctly he said "I'm the only thing standing between you and the pitchforks".

This tells you a lot about where his loyalties are.

http://abcnews.go.com/blogs/politics/2009/04/obama-to-banker/

Tue, 04/01/2014 - 23:19 | 4616056 Al Huxley
Al Huxley's picture

I'm not sure that the owners care that much about the life insurance, retirement plan, college savings funds, police andfirefighter retirement plans, etc....

Tue, 04/01/2014 - 23:24 | 4616065 NoDebt
NoDebt's picture

Well, when you put it that way it sounds all bad and stuff.

Wed, 04/02/2014 - 03:25 | 4616366 StychoKiller
StychoKiller's picture

After observing a few Nanex dissections of what HFT is and is doing, I bit the bullet and cashed out my IRA , eating the penalties and taxes.  Then the flash crash in May 2010 proved my conclusions were sound:  There ain't NO WAY to win against the 'Bots!

Wed, 04/02/2014 - 07:31 | 4616539 BigJim
BigJim's picture

 So if I understand this correctly... these HFT outfits spend billions each to compete against themselves for micro-second advantages to better execute more investors? 

Yes, funny, isn't it... these HFT shops come into the market without having any 'product' to sell, and walk away with billions in profits, and yet somehow aren't engaging in zero-sum extractive activities.

Wed, 04/02/2014 - 07:42 | 4616550 Ghordius
Ghordius's picture

if it's profitable... it must be good and proper  /s

Wed, 04/02/2014 - 07:43 | 4616552 negative rates
negative rates's picture

Crazy isn't it?

Tue, 04/01/2014 - 22:38 | 4615963 Looney
Looney's picture

I betcha, in five years Zero Hedge will be also blamed for Ukrainians joining Russia and living well above the EU standards…  ;-)

Looney

Tue, 04/01/2014 - 22:50 | 4615991 ZerOhead
ZerOhead's picture

But firstly it will be blamed for everyone leaving and not paying the IMF bankers.

Tue, 04/01/2014 - 22:43 | 4615968 ZerOhead
ZerOhead's picture

.

Tue, 04/01/2014 - 23:18 | 4616053 holmes
holmes's picture

I blame Bush.

Tue, 04/01/2014 - 22:46 | 4615984 Freddie
Freddie's picture

Another reason why I cancelled WSJ and Barrons back in 2006 or maybe earlier.  F***ing joke newspapers.  Pro-amnesty, pro-NWO.

Wed, 04/02/2014 - 00:09 | 4616153 ReactionToClose...
ReactionToClosedMinds's picture

am very close to doing what you did (have subscribed to both since late 1980s) ......in fact my wife is sick of me bitching about  how they've changed.    But I figure I gotta read 'conventional wisdom' somewhere......and the NYTimes editors are just too lazy for my tastes (not even getting to their over-the-top agenda bias).   WSJ is like reading B'berg anymore ...why are they following that mistake?

Wed, 04/02/2014 - 01:43 | 4616254 mccvilb
mccvilb's picture

All the newz that's fit for jooz.

Tue, 04/01/2014 - 22:50 | 4615992 dtwn
dtwn's picture

I like Michael Lewis, I read the Big Short and enjoyed it.  I haven't read this latest book but looking forward to it.  That said, I doubt that Michael gives ZH a shout-out, which is much deserved and probably should be given in the interest of journalistic integrity and full reporting.  

 

Would be really nice to see ZH and their version of truth/reality hit the mainstream (or close to it).  However, knowing what I know about people (sheeple), they can't and don't want to handle the truth.  Plus, paradoxically, if ZH really hit the mainstream, would it destroy it in a sense?

 

Anyway, it's too late to think about such things.  The longer the sheeple slumber (and the longer the criminal politicians and oligarchs keep this farce going), the longer I have time to prep.

I tip my glas of cheap whisky/coke to Tyler(s) with this small victory of the truth being revealed and hitting the mainstream.  Even if full recognition/credit isn't fully documented.

Shit, it'd be kinda funny if Micheael Lewis was one of the Tylers. . . . . .

Tue, 04/01/2014 - 23:04 | 4616016 Rubbish
Rubbish's picture

He doesn't appear to have a fetish for obese chicks in thongs.

 

Gold Bitchez

Tue, 04/01/2014 - 23:08 | 4616026 RaceToTheBottom
RaceToTheBottom's picture

A double Irish Jamesons to thank the Tylers for pushing these issues.  While the SEC and the FBI will do nothing this time, Eventually after a few more decades of doing nothing, people will start getting mad and doing something about it.

Wed, 04/02/2014 - 00:23 | 4616175 holdbuysell
holdbuysell's picture

"Would be really nice to see ZH and their version of truth/reality hit the mainstream (or close to it)."

I think it already has when you have magnates and the established MSM attacking ZH. I believe it's only a matter of time before more people gravitate to the blogosphere and find the quality sites for news, knowing that the MSM is a bunch of shills and propaganda.

I was thinking the other day that it would be interesting to see the relationship mapping of all the blogs, with the hypothesis that the high quality ones are gradually congealing together through shared stories and analysis. The hypothesis is that they connect to the MSM only to grab facts that require capital to obtain but provide helpful input to detailed analysis for one to critically consider the full picture.

ZH does exactly that and its connected sites do similarly.

As far as the MSM talking heads, they are in deep denial for as Upton Sinclair said, to paraphrase, 'it's difficult to get a man to understand something that his salary depends on him not undertanding.'

Tue, 04/01/2014 - 22:33 | 4615954 NoDebt
NoDebt's picture

"Nobody puts Zero Hedge in a corner."

(Double-dipping with comments here tonight)

Tue, 04/01/2014 - 22:34 | 4615955 JustPrintMoreDuh
JustPrintMoreDuh's picture

Damn you digital dickweeds!

Tue, 04/01/2014 - 22:42 | 4615973 Mr Pink
Mr Pink's picture

It appears we have all graduated from internet trolls to full fledged digital dickweeds. I feel so proud

Wed, 04/02/2014 - 05:12 | 4616441 Incubus
Incubus's picture

took me 15 years to move up from internet troll to digital dickweed. 

 

It's all downhill from here.  This is the peak of my life.

Tue, 04/01/2014 - 22:35 | 4615956 ArkansasAngie
ArkansasAngie's picture

If this doesn't take those SOBs down ... well ... geez ... let me put my tin foil hat on and ... la la la la la la

screw'em

Tue, 04/01/2014 - 22:35 | 4615958 dexter_morgan
dexter_morgan's picture

This HFT stuff seems to be a ruse to take blame away from the Fed, these firms just haven't gotten the memo yet?

Tue, 04/01/2014 - 22:37 | 4615964 NoDebt
NoDebt's picture

It is, Dex.  But you take your victories where you can when you're not in "The Club"

Tue, 04/01/2014 - 22:55 | 4615999 francis.sawyer001
francis.sawyer001's picture

Well Obama's term is almost over, the masses want
blood and no banker has gone to jail.

So why not at the 11th hour criminalize computer trading,
and then pick a NSA player like IEX to be the
appointed 'honest man', and wipe out all the other
players.

Look at it this way, NSA now has all INTEL, the next
logical step would be for NSA to handle all trading.

This guy Nakafuckayami, is just like Snowden a
fucking PROP, then so are all the people on the MSM screen.

Wed, 04/02/2014 - 06:43 | 4616500 negative rates
negative rates's picture

All the world is a stage, and most of you are desperately under rehearsed.

Tue, 04/01/2014 - 22:36 | 4615961 sleepingbeauty
sleepingbeauty's picture

How dare you (Tylers) shine a light in our dark little corner.

Tue, 04/01/2014 - 22:38 | 4615965 Cognitive Dissonance
Cognitive Dissonance's picture

Funny how every exchange wants to talk about narrowed spreads and no exchange wants to talk about front running and other HFT techniques that nickle and dime.....OK, penny and two penny every trade they can find.

Tue, 04/01/2014 - 22:47 | 4615986 NoDebt
NoDebt's picture

Drill through the bullshit.  The IMPLIED argument is that HFT is the CAUSE of the narrowed spreads (never any proof offered of that, of course).

Do you believe that?  I don't.  I think decimalized trading and computerized trading (even excluding HFT) accomplished that all on it's own.  

Oh, and let's not forget that they provide "liquidity".  Yeah, the kind that evaporates at the slightest hint that something's gone cock-eyed in the market.  The bid and ask are there until you try to trade on them.  Then they disappear like a fart in the wind.

Wed, 04/02/2014 - 01:57 | 4616267 mccvilb
mccvilb's picture

Disappear is right, and then at 4:01 EST when the 100 share max bids and offers fade away, the dark pools add a couple of hundred thousand executions to the day's tape - where did those magically materialize from? it's an effing miracle!

Don't forget the Code Talkers throwing up 10,000ths of a dollar smoke signals to other tribe members.

Wed, 04/02/2014 - 00:26 | 4616177 NaN
NaN's picture

The front-running sure seems like an automated backroom dealing.

In macro terms, it is obviously rentier behavior.

 

Wed, 04/02/2014 - 03:42 | 4616362 Urban Redneck
Urban Redneck's picture

 

The part about HFT being decades old is oddly true, since the master function underlying all HFT algorithms is:

 

FV   =   P (1  +  r / n) ^ (Y x n)

 

Most human beings think in terms of n being 1, although even the ancients of finance realized n is more often/accurately 360 (and bond guys are smarter than equity guys), the dawn of internet era and birth of the ETRADE baby expanded the range of n to 3 x 10^3 (3000) for the astute amateurs.  But the tech boom and Reg NMS have moved pumped things up to ludicrous speed for the institutions since 1 year is 3 x 10^10 milliseconds or 3 x 10^16 nanoseconds, those huge extra orders of magnitude allow for imperceptibly small skims (r) to yield absurdly high digital returns (or more often just amazingly high (and consistent) returns with minimized portfolio risk.  

 

One could fix the markets but it isn't possible to put the put the genie back in the bottle, and the banksters' machines can now steel money faster than people can make it, so if God (or TPTB) decide to reenact Matthew 21:12-13 what new temple does the devil setup shop in? 

Wed, 04/02/2014 - 03:46 | 4616389 Haus-Targaryen
Haus-Targaryen's picture

This is perhaps the most under appreciated comment on here. 

I hate HFT, but sadly it is here to stay.  Even if the FBI finds that HTFs are acting on inside knowledge, all the HFTs have to do is public their data-steam on some pay-to-play website (thus making it public info) and they make  even more money by

1) HFT'ing
2) Cash from morons signing up for the PTP service thinking they will be faster than a super computer and eek out precious seconds on the average etrade joe.

Tue, 04/01/2014 - 23:22 | 4615966 Shad_ow
Shad_ow's picture

 "Killing the messenger?"

Keep pounding the drum and take notice of lamp posts and tall buildings.

Tue, 04/01/2014 - 22:40 | 4615967 Seasmoke
Seasmoke's picture

Sounds like another Consipracy Fact Check Mark for ZeroHedge. 

Tue, 04/01/2014 - 22:42 | 4615970 FieldingMellish
FieldingMellish's picture

"The further a society drifts from the truth, the more it will hate those who speak it." - George Orwell

Tue, 04/01/2014 - 22:51 | 4615993 francis.sawyer001
francis.sawyer001's picture

"To know who the enemy fears most, you must only
look to those they censor and silence".

*

HFT is the ultimate dog&pony show ran by
team-opposition.

"Wall Street 'Rigged'? I'm Shocked" - Casablanca

The bogey man in this show is of course computers,
and yes computerized trading will NOT go away, and
software Algo'S WILL ALWAYS BE written by the likes
of Diebold, if we can't have honest voting, why in
fucking hell, would you expect honest trading
software?

Tue, 04/01/2014 - 23:25 | 4616069 bardot63
bardot63's picture

Wait until youi see the manipulated gold and silver markets unwind.

Wed, 04/02/2014 - 01:48 | 4616257 quasimodo
quasimodo's picture

Remind me to quote your post to my great grandkids.

Wed, 04/02/2014 - 02:09 | 4616286 mccvilb
mccvilb's picture

We gold bugs have been getting our asses handed to us with no end in sight. Dollar will have to take a Dixie first.

Tue, 04/01/2014 - 23:43 | 4616111 Quus Ant
Quus Ant's picture

Computers will get the blame, but we are the bogey-m(e)n.

Tue, 04/01/2014 - 22:56 | 4615974 ebworthen
ebworthen's picture

Wow, who paid Mr. Assness to write that?

Or is he one of the deluded Pisani's of the world?

Yeah, all ZH's fault, that they pointed out the market rigging FIVE YEARS AGO.

The abject lack of public trust in the giant Ponzi couldn't possibly have anything to do with individuals being hung out to dry while CONgress bailed out banks/insurers/corporations and foreign nations, the FED juiced Wall Street with $7 Trillion of taxpayer debt, and Jon Corzine roams free.

*cough*

Wed, 04/02/2014 - 01:18 | 4616231 aldousd
aldousd's picture

Are you kidding? He runs an HFT fund. He's trying to save his own ass. I really don't give a flying fuck about front running; however, I think that's just the first, most easily explained of the situations here. I definitey do not buy that there is such a thing as a 'liquidity provider.'

Wed, 04/02/2014 - 01:30 | 4616241 Excursionist
Excursionist's picture

No one paid Cliff A. to pen the op-ed.  He doesn't need the money.  AQR is a (figurative) gold mine for him, and he's simply protecting it.

Really disappointing to see such a piece come from him.  Having read a decent amount of his writings, I believe him to be a solid thinker with a libertarian penchant for finding and acting on truths.

Unless those truths adversely impact his P&L, apparently.  <sigh>

Love his quote about being receptive to the invisible hand of free markets proving HFTs wrong, obsolete, valueless, etc.  He'd have you believe there's a market to begin with that could invalidate the HFT business model.  Kind of like Nikita Khrushchev saying he's open to the markets proving nuclear weapons to be bad.

Wed, 04/02/2014 - 03:45 | 4616387 ebworthen
ebworthen's picture

Thanks guys, did not know the specifics.

Talking his book, eh?  I'm shocked I tell you, shocked!

Tue, 04/01/2014 - 22:42 | 4615975 dexter_morgan
dexter_morgan's picture

digital dickweeds of the world unite!

Tue, 04/01/2014 - 23:58 | 4616137 old naughty
old naughty's picture

Ok, let's all change our names to digital dickweed-1, -2, -3...

show them !

Tue, 04/01/2014 - 22:42 | 4615977 I am a Man I am...
I am a Man I am Forty's picture

I'm putting Asness in charge of a new fund called go fuck yourself.

Wed, 04/02/2014 - 00:10 | 4616152 MsCreant
MsCreant's picture

Tao de ass ness.

Wed, 04/02/2014 - 03:47 | 4616392 Flagit
Flagit's picture

Fuck&Fund

Fuck n' Fund

go Fuck&Fund yourself.

Tue, 04/01/2014 - 22:44 | 4615981 The Fonz...befo...
The Fonz...before shark jump's picture

Fuck you Cliff Assholeness....

How many retail investors in the market today compared to pre 2008?....

Oh and thanks to a certain blogger (ZH) you have had more eyeballs read you stupid article than the usual couple of hundred or so that care to read your trite...

You Cliff just like the HFT and many others on Wall Street are stealing a living....

Find a better way to live your life

Tue, 04/01/2014 - 22:54 | 4615996 The Wisp
The Wisp's picture

And I bet they really hate having to read this Blog, to find out how much we Know  :)

Tue, 04/01/2014 - 22:54 | 4615997 stant
stant's picture

god i love this place.

Tue, 04/01/2014 - 22:56 | 4616001 Carbon Beach
Carbon Beach's picture

The pilling on will only get worse against Lewis and Katz. It will be interesting to see what narrative wins the day. For the long term the fix is in.

Tue, 04/01/2014 - 22:57 | 4616003 Amish Hacker
Amish Hacker's picture

"Digital Dickweed" would be a great user name on ZH. Can't wait to see the avatar.

Tue, 04/01/2014 - 23:14 | 4616042 Bear
Bear's picture

I'm sure HFT trolls have been wandering around ZH for a long time ... but it aint The Bear

Wed, 04/02/2014 - 05:27 | 4616454 grekko
grekko's picture

The "Johnny Holmes" of the financial blogosphere! (New motto for ZH)

Tue, 04/01/2014 - 23:08 | 4616023 WillyGroper
WillyGroper's picture

Mercy buckets Tyler for your PSA, prowess & prose.

Regardless of your motive, you'll go down in history as a mover & a shaker.

WB7 too.

Thanks for the sanity in an insane world.

Tue, 04/01/2014 - 23:22 | 4616061 Typing Typer
Typing Typer's picture

Assness? Are you shitting me?

Tue, 04/01/2014 - 23:55 | 4616132 holdbuysell
holdbuysell's picture

As a reminder, His Assness is related to His Buttholeness.

But His Buttholeness is the black sheep in the family so no one talks about it.

Tue, 04/01/2014 - 23:25 | 4616068 Central Wanker
Central Wanker's picture

Now this is what I call "momentum ignition"!

Tue, 04/01/2014 - 23:26 | 4616070 I am a Man I am...
I am a Man I am Forty's picture

Charging a fee for a trade I get, but bid ask spreads should go the way of the dinasour.

Tue, 04/01/2014 - 23:31 | 4616080 Femme Meatwad
Femme Meatwad's picture

The strategies attributed to HFTs have existed in some form or another in prior market epochs, and many of those same strategies don't require HFT. The common denominator is trust, and the behaviors of the broker-dealers with whom a great deal of trading business is concluded. Ergo Michael Lewis' ally with, and prominent notation of, Goldman during his showing brought about considerable credibility questions.

 

Wed, 04/02/2014 - 00:44 | 4616204 NaN
NaN's picture

The trust was sacrificed when the big investment firms went public. They used to be partnerships with skin in the game for a reason, as pointed out by Michael Lewis in The Big Short.

 

Wed, 04/02/2014 - 05:24 | 4616452 grekko
grekko's picture

Me thinks that Goldman just sees the writing on the wall for HFTs and is trying to ride the wave to respectability, which ain't going to be easy.

Tue, 04/01/2014 - 23:48 | 4616118 holdbuysell
holdbuysell's picture

The louder the squeals, the more money is at risk.

Asness shows the way with 'beyond-The-Who-concert' squeal intensity.

 

Tue, 04/01/2014 - 23:50 | 4616124 spekulatn
spekulatn's picture

Strut your digital dickweed like you just don't care, ZH.

Badge of honor, me thinks.

Who be next?

Wed, 04/02/2014 - 05:22 | 4616451 grekko
grekko's picture

That digital dickweed is one hung SOB today.  Strut Tyler, strut!

Tue, 04/01/2014 - 23:53 | 4616127 holdbuysell
holdbuysell's picture

Bottom line:

The markets are not safe. An unrecoverable 2010 Flash Crash type of event is only a matter of time.

Tue, 04/01/2014 - 23:55 | 4616129 chindit13
chindit13's picture

Methinks the lady doth protest too much.

Wed, 04/02/2014 - 00:05 | 4616147 smcapmachine
smcapmachine's picture

Nope. The only thing anyone should blame zerohedge for is losing them more money over the past 5 years than any financial advisor on planet earth. Sad but true

Wed, 04/02/2014 - 01:20 | 4616234 aldousd
aldousd's picture

Actually no, they shouldn't. Because ZeroHedge is not a financial advisor, and they aren't giving financial advice.

Wed, 04/02/2014 - 07:49 | 4616558 TooRichtoCare
TooRichtoCare's picture

Hey, I'm generally a big fan of ZH but I too will call a spade a spade, there have been major periods when this blog has left me with a very strong negative feeling about an over-priced market that's imminently due to collapse, and how it's all built on steroids & the Fed's sugar-rush yadda yadda yadda, and if I had just simply kept my money in the markets I'd be siginifcantly richer.  

Probably your finest moment however was during the complete shit-show you created about Morgan Stanley's exposure to France during the Euro crisis in 2010-2011.  Your constant articles about how NET exposure was irrelevant and how Morgan Stanley's GROSS exposure to France meant that MS was essentially insolvent, was a major factor in driving the price from 20 down to 12....and yet it was all a crock.  Anyone who bought MS during that sell-off and anyone who ignored the cheerleading from ZH, zealously egging on the demise of a major US institution, made a massive amount of money as MS then rallied up to the current 30s level!

I don't see the whitewashing of the entire HFT algo trading sector with the same brush as being your finest moment. Manipulation and creating a false & misleading impression are already illegal.  The question should simply be whether firms have the adequate surveillance and monitoring tools to detect the bad behaviour and put a stop to it.  But you don't need yet another layer of regulations. Spoofing and layering etc are already banned, regardless of whether the perpetrator is an HFT firm or otherwise.  Go ask Michael Coscia if he thinks the regulators are cluelessly allowing market abuse to go on.

Wed, 04/02/2014 - 10:56 | 4617302 Seize Mars
Seize Mars's picture

TooRich
Posting from mobile so I don't have time to debunk all of your lies and misleading straw men. To quote inigo Montoya, allow me to splain, no that would take too long let me sum up.
Fuck you.
It's always correct, appropriate and relevant to say it like it is. Morgan Stanley should be trading at zero you douchebag. Sure you will have made more money by being in the stock market than out if it. Then one day you get Corzined.
Truth is treason in the empire of lies.

Wed, 04/02/2014 - 11:22 | 4617391 TooRichtoCare
TooRichtoCare's picture

Posting from a mobile is somehow stopping you from debunking my "lies"? That's hilarious.  I think you'll find that it's your low IQ and general lack of information that's stopping you from debunking anything!

Explain to me why MS should be trading at zero, dick-wipe...go on...try it...I challenge you to even come close to the most basic stock valuation analysis exercise.  You probably couldn't articulate why a frikkin can of beer costs what it does, let alone a diversified financial business.  

Where the hell do these numbskulls come from...

Wed, 04/02/2014 - 11:32 | 4617431 Seize Mars
Seize Mars's picture

MS=0 Comes from the quaint and old fashioned thing called Article One, Section 10 of the US Constitution. Only gold and silver can be money.
Poof! Morgan Stanley and all its works and all its ways disappear into a sulphurous vapor.

Wed, 04/02/2014 - 11:42 | 4617459 TooRichtoCare
TooRichtoCare's picture

Yeah, well good luck with that...so I suppose you're short JPM, C, GS and all the other Banks as well by that logic.

Or perhaps the reality is you're some punk kid who's about to get yelled at for playing on mommy's computer again...

Wed, 04/02/2014 - 11:55 | 4617508 Seize Mars
Seize Mars's picture

Good luck with what? Enforcing the USConstitution, which is the law of the land? Who knows, maybe our brave men and women will actually uphold their oaths. Nah, that would be risky, and after all they are cowards.

Anyways, if by "short banks" you mean "not having anything to do with them at all," then yes I am "short." If you mean playing the douchebag-rigged stock "market" then no.

Good luck getting Corzined.

Also, I'm a punk in a basement? What? I am? That's the best you've got? At least I called you a douchebag, right and proper.

Please point out where I misunderstood that whole article one section 10 thing.

Wed, 04/02/2014 - 12:01 | 4617528 TooRichtoCare
TooRichtoCare's picture

Sorry dude, I didn't realise you were mentally impaired.  I don't think it would be fair for me to continue this discussion.  You somehow think that "enforcing the US Constitution" has something to do with how banks should be valued, and how their stock should be priced.  And your comeback, calling me a douchebag, is indeed hilarious for its superior wit and intellect.  You should feel good about yourself for having come up with such a brilliant retort. Good luck going through life with such a devastating mental disadvantage.

Wed, 04/02/2014 - 13:23 | 4617806 espirit
espirit's picture

You chose one pill over another, did you not?

Remember the steak may taste real...

 

 

Wed, 04/02/2014 - 14:30 | 4618098 Seize Mars
Seize Mars's picture

Oh I'm mental alright.
Anyways do me a solid: answer this question about article one, section ten. Did I misread or misunderstand it? What is it's meaning, in your eyes?

EDIT: oops was trying to reply to TooRich. After all I'm retarded

Wed, 04/02/2014 - 00:24 | 4616155 mrmister
mrmister's picture

I think there are laws in this country against truthiness.

You just cant go around telling everyone your bank is broke or the stockmarket is rigged or your government is breaking the Constitution.

THAT IS ILLEGAL. ;)

But seriously, why the marketing push of this stuff now? We all have known this stuff for how many years? Dog and Pony show.

Wed, 04/02/2014 - 00:17 | 4616164 LongMarch
LongMarch's picture

Dear HFT guys,

We don't hate you because of a silly blog. We hate you because you're  fucking thieves.

Ps-Please go and play with some  nailguns. 

Wed, 04/02/2014 - 00:20 | 4616165 Wait What
Wait What's picture

it's only ok to talk your book if you're raping muppets or selling into your every buy recommendation on CNBC. otherwise you need to STFU. /s

Wed, 04/02/2014 - 00:33 | 4616186 NaN
NaN's picture

The WSJ worships big money, unfair advantage, and exceptionalism. That's what makes it an honor to be called out by them. Congratulations, ZH.

 

Wed, 04/02/2014 - 00:48 | 4616209 401K of Dooom
401K of Dooom's picture

Congratulations Tyler!  You have put another nail into the coffin of the mainstram media.  You are well on the way to helping to eliminate the good-old boy media network that has manipulated this world for the last thousand years.  Keep up the good work!  Btw, do me a favor and when the NYT goes out of business, purchase one of their offices to use as a blogging condo.

Wed, 04/02/2014 - 01:55 | 4616264 ptoemmes
ptoemmes's picture

Lowly Blogger 1, Cliff Asness 0.  But do play on Cliff if you insist.

 

 

Wed, 04/02/2014 - 02:01 | 4616273 inky
inky's picture

I blame Zerohedge for making me turn my computer on every morning to read the truth.

Oh wait..

Sorry..what i meant to say was = Thankyou Zerohedge ( Tylers )

Wed, 04/02/2014 - 03:16 | 4616357 disabledvet
disabledvet's picture

I see nothing wrong with the Federal Government taxing what is clearly in-economic behavior. Other than the fact that Government engages in uneconomic behavior.

again...why do we have a postal service again?

Wed, 04/02/2014 - 03:46 | 4616391 StychoKiller
StychoKiller's picture

The Post Office is one of the few things mandated by the US Constitution -- read it ya jerk!

Wed, 04/02/2014 - 03:27 | 4616370 CHX
CHX's picture

" ...it offers more investors better execution" . I love this ambiugous wording, one can give it the meaning "it offers (us) an easier execution of more investors"... Too true, too true.

Wed, 04/02/2014 - 03:46 | 4616390 slackrabbit
slackrabbit's picture

Awesome!

Wed, 04/02/2014 - 03:47 | 4616393 disabledvet
disabledvet's picture

making all the right enemies too!

Sam and Dave "Hold on, I'm Coming" is where we're at folks!
"Don't you ever feel sad...we all need!
When times are bad!
When they day is coming
And your in doubt
Like A River of Truoble
About to drown....
HOLD ON!
I'M COMIN'!
HOLD On!
I'M COMIN!

Wed, 04/02/2014 - 05:07 | 4616440 Manipuflation
Manipuflation's picture

Now on to the rigged PM markets and all of the bullshit that goes on there.

Wed, 04/02/2014 - 05:28 | 4616455 grekko
grekko's picture

Hey Tyler, my vote for Pulitzer goes to ZH this year!

Wed, 04/02/2014 - 05:29 | 4616456 Baby Eating Dingo22
Baby Eating Dingo22's picture

As long as market keeps levitating, Joe 6 Pack of Dasanti/PoopsiDiet/Strawbucks Double Grande is laughing at Michael Lewis and the issue will remain as significant as Courtney Love's period.

But when the computers and the markets crash, it will put all the "Who Shot Kennedy" papers on the bird cage floor.

Wed, 04/02/2014 - 05:39 | 4616465 MickV
MickV's picture

It's not rigged because of HFT. HFT is the result of the "riggedness " of the "wealth effect", caused by billions given to the insiders with the implied imperitive of pumping equities so that Obama can look like he cured the "biggest financial disaster since the Great Depression". If the criminals did not pump equities then they wouldn't get the sugar from the FED, and since volumes are very low, HFT must be used to keep blowing the balloon. (and of course the carry trade).

Wed, 04/02/2014 - 07:04 | 4616518 barndoor
barndoor's picture

"For the first time in history, Main Street might have it rigged against Wall Street."

 

There are no words.....

Wed, 04/02/2014 - 07:39 | 4616544 Ban KKiller
Ban KKiller's picture

HFT? LSMFT, if I can find a place, that is.

Wed, 04/02/2014 - 08:02 | 4616574 NuYawkFrankie
NuYawkFrankie's picture

They Hate Us For Our 'High Frequency Trading Algorithms'...

Wed, 04/02/2014 - 08:09 | 4616595 Seize Mars
Seize Mars's picture

Assness is a Phoney libertarian. He spouts about free markets but he gets paid from rigged ones.
I've heard his rants when he was upset about the screwing of GM bond holders.
Well how things change. Fuck you Assness.

Wed, 04/02/2014 - 08:11 | 4616606 FreeNewEnergy
FreeNewEnergy's picture

Well, yesterday was fun, if not mainly a fantasy. Episodes like we all saw on CNBC will probably never be repeated. It came too close to the truth about the markets. Three days of calling the market "rigged" are about all the MSM and Wall St. banks and HFTs can handle.

I was at first encouraged that maybe a door had been opened to the fraud and the lies, but, after a solid night's sleep, I see CNBS talking about today's worthless ADP report and Friday's jobs report, so, back to business as usual, it appears.

The theft will continue. The FBI and SEC will do nothing.

This episode has given me adequate perspective, however. I am happy that I don't have an IRA, a 401k or any kind of retirement plan. My plan is to garden, maybe expand to farming, and become expert at alternative energy - wind, solar, small hydro. And, no, I will not connect my solar panels to my meter. If I have to rewire the entire house, the grid will get not one watt from my effort.

In a sense, I have given up fighting. Buying more silver (I already have a nice cache) makes no sense. Investing in good tools, alt energy and my own skills does. Fuck Wall Street, Cliff Asness and the people who inhabit and profit from it. I want nothing to do with them.

What I really want is to be free from regulations, taxes and the power-hungry power companies. That's my fight, my resistance to a society that is complacent to their own demise.

Green Acres is the place to be. Farm livin' is the life for me. Land, spreading out so far and wide; keep Manhattan, just give me that countryside.

Keep the faith, fellow digital dickheads. And grow more broccoli, damn it!

Wed, 04/02/2014 - 08:12 | 4616613 El Hosel
El Hosel's picture

I, for one, have just about had it with all the Assness.

Wed, 04/02/2014 - 09:22 | 4616900 swmnguy
swmnguy's picture

All I know about HFT, and indeed about the reality of how our markets work as opposed to the propaganda, I learned on ZH.  And I'm not sure I understand it.

But I'm pretty sure that the rigging of the markets goes far beyond HFT.  It seems likely to me that, as with all scams, the rigging depends on unequal information.  HFT is just a mechanism to extract maximum advantage from that unequal information.

When Bernie Madoff went down, the media was all enraged about the widows and orphans who lost all that money, like Jerry Seinfeld and Steven Spielberg.  Of course, not mentioned was why all those supposedly sophisticated investors gave Madoff so much money to play with.  Was it because they believed he was generating 25% annual returns every year by legitimate means?  I highly doubt it.  They gave him their money because they knew his resume, and they thought they would benefit from his insider trading.  They were hoping they could profit from being buddies with Madoff, and they thought it was their entitled riight as insiders, legalities and ethics be damned.  It was very telling that the outrage was not that would-be scammers got scammed; it was about the fact that no trades were going on at all.  Insider trading would have been tolerated.  But the fact that there were no trades at all called into question the fundamental basis in faith of the whole system.  Can't have that.

Same with HFT.  These guys think they're entitled as if by birth to front-run every trade, see everybody else's cards, and they believe it is their right to never give a sucker an even break.  And what, we're surprised these guys are criminals?

The real problem is the extent (total) to which these guys have bought control of the mechanism of governance.  The real problem from their perspective is that word has leaked out, and they're running out of suckers to fleece.  Mom and Pop are broke, having been skinned already, and all the big boys can do now is sharp each other using Fed money.  Anyone can see that's a dead end with a shrinking lifespan. 

Wed, 04/02/2014 - 09:20 | 4616902 Mediocritas
Mediocritas's picture

Someone tell me that the first 's' is silent in Asness. Please let it be true.

Wed, 04/02/2014 - 09:54 | 4617051 Downtoolong
Downtoolong's picture

For the first time in history, Main Street might have it rigged against Wall Street.

And you know what else, when my 90 year old grandmother puts on her makeup she really is prettier than Taylor Swift.

Cliff. 

Question: Why do these guys like Cliff try so hard to convince us they are the world’s biggest bullshitters? Don’t they realize it’s already obvious to everyone?

Wed, 04/02/2014 - 10:44 | 4617254 teslaberry
teslaberry's picture

years of reading about the 'HFT' 

problem on zh has made me realize its not such a bad problem. it's just more theft. it's not the source of theft....

 

if you want to change the hft, you have to go for the jugular, you gotta shut down the fed. it's that simple. 

 

if the fed gets shut, so does the tbtf banks. 

 

hence----------you need political circustances resulting in a witch hunt against the banks. which means you need the public to get impoverished quicker. which means you need more theft to make that happen. 

 

the faster the money of the the 99.99 percent gets stolen by the .01 percent the quicker this all comes down. 

 

so i for one, SUPPORT hft, as it is helping to accelerate the speed of approaching market collapse. 

 

I don't see why people at zh cannot get over their stupid thoughtless anger at 'unfair' market theft. as if that is the cause of their problems......

obviously if you don't like hft, don't participate in the stock market nad you have nothing to worry about.

Wed, 04/02/2014 - 23:53 | 4620027 MEAN BUSINESS
MEAN BUSINESS's picture

Congratulations! Tyler Durden. Now get to work! lol,  and hats off to all the FC commentarians : )

Do NOT follow this link or you will be banned from the site!