• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Jon Stewart On HFT: "It's Not American; It's Not Even Capitalism. It's Cheating"

Tyler Durden's picture


Jon Stewart is stunned by the world of HFT (where "stock exchanges sell the right to advance information to high frequency traders [by locating their computers closest to the exchange]") and the mainstream media's immediate jump to defend it "as good for us", but as Michael Lewis explains "anyone whose livelihood is dependent on Wall Street [from CNBC, FOX and even the SEC] is invested in this... it sounds like a conspiracy."

In this excellent interview, The Daily Show doubter asks "we have set a standard for share buying (you can't but 1/100th of a share) so why not set a standard for frequency of trading?" Lewis stoic response sums up our world perfectly, "in a sane world, we would... but the money is too big," and adds that indeed that is what IEX is doing. The HFTs "function on volume and volatility" alone and "they know the prices before you do... which is illegal if it's a person, but as a computer, meh?"

Michael Lewis and Jon Stewart Part 1: What is HFT? "HFT is a middle-man in a transaction they have no business being in.. it is totally unnecessary Wall Street intermediation" How does it work? "The stock exchanges in this country sell the right to advance information to high frequency traders [by locating their computers closest to the exchange]" What is front-running? "front-running as a person is illegal, but as a computer, meh"



Michael Lewis and Jon Stewart Part 2: Conspiracies - "It's Not American; It's Not Even Capitalism. It's Cheating", Trading Frequency standards, and independent exchanges


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Wed, 04/02/2014 - 09:27 | 4616945 1stepcloser
1stepcloser's picture

Hey Jon remember to apply ("It's Not American; It's Not Even Capitalism. It's Cheating")

 this to obummer care the next time you promote it on your comedy show.  Jack off!

Wed, 04/02/2014 - 09:44 | 4617010 asteroids
asteroids's picture

They did have nice things to say about Canadians. The only thing to do is to cash out and wait until we have a fair market as so many hedge fund managers have done. Todays markets are planned and managed by banksters and politicians.

Wed, 04/02/2014 - 09:49 | 4617030 onewayticket2
onewayticket2's picture

msnbc (morning joke) guest spilled the beans.....

the story is getting promoted because the democrat party strategy is to "Bain Capital" any republican candidate.


jon lipshitz isnt "stunned".....this isnt "news".....and it's not about HFT.....


Wed, 04/02/2014 - 09:58 | 4617070 SafelyGraze
SafelyGraze's picture

take-home message:

Dudley Do-right has taken on the bad guys on behalf of mom and pop

he is a hero

all is safe now

good thing we have heros 

heros like Dudley Do-right


Wed, 04/02/2014 - 10:11 | 4617123 madbraz
madbraz's picture

Bill Dudley Do Right...for banksters only

Wed, 04/02/2014 - 11:26 | 4617411 Georgia_Boy
Georgia_Boy's picture

It makes me wonder what is really going on behind the scenes. In an election year, all of a sudden there's a move afoot to take away one of the profit machines of Wall St., which finances the incumbents. Why the concern for muppets like me?

Wed, 04/02/2014 - 12:40 | 4617667 SDShack
SDShack's picture

Bingo. Look at all the headlines in the last 48 hours. HFT is bad is everywhere. Russia is in a fight with JPM over blocked payment transfers, that JPM is pre-emptively saying is related to US sanctions against Russia, even though this isn't part of the sanctions. Anyone wonder what Russia has on the West Financial System... maybe via Snowden... that is being threatened to be outed? Something has TPTB really worried.

Wed, 04/02/2014 - 10:06 | 4617087 Dark_Horse
Dark_Horse's picture


I have known about HFT since 1999. I discussed the technology with a company that was setting up a direct connection with CBOT at that time.

This is old news to some people, but it's only been getting out to the public very recently. The amount of money siphoned off the trading is staggering and have been going on a long time. The gov't didn't want to intervene, because it makes the market look active, when in truth it's been in a real decline from real trading, and volumes are made up with predatory trading. It's gets ugly when the HTF automated trading is working against other HTF's. Then there's the bad strategies that are implemented which amplifies a coding logic bug/hole.


Wed, 04/02/2014 - 10:17 | 4617149 Divided States ...
Divided States of America's picture

Its only been brought to the public now because HFT market has been overdone and saturated...its not as easy to skim the sheeps anymore with so much competition.

I am sure there is some new technology out there right now that some firms are using that is skimming the sheeps as we speak and we wont know about it till a decade later when its at the end of its life. This cycle keeps repeating itself...aka sheeps gets slaughtered in perpetuity.

Wed, 04/02/2014 - 11:54 | 4617501 MrPalladium
MrPalladium's picture

With the index fund dominance of individual portfolios and the buy and hold inability of institutional investors to go to cash, it is inevitable that trading volumes will decline. But then given the volume and number of HFT firms, at some point with declining investment volume it is inevitable that the HFT cannibals will begin eating each other, and that is why the squid has abandoned the waters infested solely with other HFT sharks.

Wed, 04/02/2014 - 12:26 | 4617629 silverserfer
silverserfer's picture

don't forget HFT is mechanism that bernank used to levitate stawks. Enabled them to make market what they say it is. Got to get sheep back into 401K no matter what. 

Must.. keep.. ponzi.. going..

Wed, 04/02/2014 - 10:34 | 4617226 stocktivity
stocktivity's picture

It's all Bullshit!!! Been saying that for a long time. Michael Lewis just wrote a book about it.

Wed, 04/02/2014 - 09:49 | 4617024 toys for tits
toys for tits's picture

Thank god ZH requires anonymity to comment.  Otherwise everyone would be attacked for an idea that others disagree with that's totally unrelated to the topic at hand.

Stewart has his faults but take the media victories where you can get them.  This is one and making Cramer look like the douche nozzle that he is will always make Stewart a hero to me.

Wed, 04/02/2014 - 10:13 | 4617133 Tortuga
Tortuga's picture

Stewart is a blood sucking fucktard doing it for ratings so his gravy train is not derailed.


Wed, 04/02/2014 - 10:22 | 4617171 balanced
balanced's picture

So we all (ZHers) know and say that HFT is cheating. Jon Stewart says it's cheating, and he's vilified for it. WTF is wrong with you morons. I think that most of you are assholes, but I don't vilify you when you make a statement that I agree with, because it MAKES NO SENSE TO DO SO.

Wed, 04/02/2014 - 12:13 | 4617564 Chewybunny
Chewybunny's picture

Cuz he's a Jew. 

Wed, 04/02/2014 - 12:25 | 4617615 lunaticfringe
lunaticfringe's picture

meh. I think Stewart is just another statist, that's why I villify him. Well, that and his arrogant smugness. I'm ok with the asshole handle just so long as that means we don't have to share a teepee.

Wed, 04/02/2014 - 12:33 | 4617650 TN Jed
TN Jed's picture

Hear hear.  It's the same give and no-take white noise that has crushed all political debate.


You cannot honestly expect the opposition to give consideration to any of your issues unless you do the same. 

Wed, 04/02/2014 - 12:51 | 4617706 MedTechEntrepreneur
MedTechEntrepreneur's picture

John L Stewart is being vilified for his selective outrage...he is throwing a populist wingding over "wall street is rigged".... the government, whom Stewart loves, is stealing not pennies per trade but thousands upon thousands with the threat of force and imprisonment!...THAT is what is offensive...fuck you Stewart. 

Wed, 04/02/2014 - 10:28 | 4617202 toys for tits
toys for tits's picture

Totuga, here's something you might not know.

Everyone who works on TV does it for the ratings, otherwise they won't be there.  TV is the only way to reach the masses by the way.

Wed, 04/02/2014 - 11:22 | 4617393 putaipan
putaipan's picture


do you remember the case of the "young turks"? ratings were strong and on their way up...he was promised career advancement but also told to cool it and tow the line. he refused.

build a better mouse trap my ass. i learned this when my supermarket had invented a better potato chip. freaking delicious and less than half the cost. as soon as its popularity was obvious,it was 'dissapeared'. the store would make more by charging the big players for shelf space. so much for "free markets".

Wed, 04/02/2014 - 12:21 | 4617596 RafterManFMJ
RafterManFMJ's picture

Gentlemen, we've finally found a commander for the People's Revolutionary Army - Potato Chip Battalion.

Wed, 04/02/2014 - 13:34 | 4617850 acetinker
acetinker's picture

Sir, you are an asshole!  It takes one to know one ;)

Wed, 04/02/2014 - 10:23 | 4617175 Uncle Remus
Uncle Remus's picture


making Cramer look like the douche nozzle

Like he needs any help.

Wed, 04/02/2014 - 10:37 | 4617233 RevRex
RevRex's picture

 Obama is  your hero , probably Fidel and Che also...

Wed, 04/02/2014 - 10:49 | 4617278 Greenskeeper_Carl
Greenskeeper_Carl's picture

He is still a leftist douche bag with an agenda that runs contrary to most people on here's ideals. He says shit like this now because it suits them, and because its out in the open now, nothing they can do about it. Now they can blame the next market crash on this instead of the federal reserve and govt. that's all this is. Also, I am a big Peter schiff and Andrew Napolitono fan, and the way Stewart twisted their message and didn't give them a fair hearing was disgusting. Watch those if you want to see how this guy thinks. He is a statist authoritarian that deserves no praise from ZHers.

Wed, 04/02/2014 - 09:50 | 4617037 lordylord
lordylord's picture

I'm surprised a libtard like Stewart even stated that this isn't capitalism.  Usually these fools like Stewart blame all the ills of society on capitalism in order to push their socialist/facist agenda.  Meanwhile, I haven't smelled a whiff of free market capitalism in my lifetime and neither has he.

Wed, 04/02/2014 - 10:01 | 4617083 onewayticket2
onewayticket2's picture

Sr Senator Dick Durbin said on the floor of the Senate yesterday that socialist obamacare is great because "it's better than the free market"


these are some whacky leftists in power these days.....

Wed, 04/02/2014 - 10:23 | 4617176 Chupacabra-322
Chupacabra-322's picture

Michael Lewis explains "anyone whose livelihood is dependent on Wall Street [from CNBC, FOX and even the SEC] is invested in this... it sounds like a conspiracy."

No, it's blatant, in your face CRIMINAL you asshole.

Wed, 04/02/2014 - 11:07 | 4617345 tonyw
tonyw's picture

There are no free markets.

In health care the big cos have essentially bought the legislators so that laws are written for their benefit, not the benefit of consumers.


Wed, 04/02/2014 - 12:20 | 4617594 TN Jed
TN Jed's picture

How many times have we heard people state here and other financial boards something along the lines that the market seems to move solely against them and not to worry, the price will move up because they had just sold their entire position.  I know I've experienced it as if it had a 6th sense or was personally stalking me.  Well, it seems we were ALL correct.  Kudos again ZH and TD.

Wed, 04/02/2014 - 10:32 | 4617214 Hohum
Hohum's picture


Why in the world do you think "free market" healthcare is best?  Do you think it's best for everybody?

Wed, 04/02/2014 - 10:39 | 4617240 RevRex
RevRex's picture

Why do you socialist ticks and leeches feel you should be rewarded for failure and productive folks should be penalized for success? 


I know yopu are too cowardly to answer honestly....

Wed, 04/02/2014 - 11:25 | 4617297 lordylord
lordylord's picture

"Why do you socialist ticks and leeches feel you should be rewarded for failure and productive folks should be penalized for success?"

Failure implies that these people tried to be successful at some point.  Don't give them that much credit.  As if the mere fact that they breathe and consume entitles them to the benefits, luxuries, and labor of hard working individuals.  Give me a break.  These people are thieves and want nothing more than a free ride.



Wed, 04/02/2014 - 12:02 | 4617530 Caobei
Caobei's picture

I dunno...What industry hasn't the USA bailed out or subsidized in the last 30 years you snarky little shit. 

Wed, 04/02/2014 - 12:36 | 4617658 lordylord
lordylord's picture

No buisiness or industry should ever be bailed out by the taxpayer.  They should be left to fail.  A gangrene leg isn't left to kill the rest of the body?  Is it?

Wed, 04/02/2014 - 13:51 | 4617936 blackholes
blackholes's picture

Here in Canada, most people don't mind paying for universal healthcare, and would hardly regard it as rewarding failure. Quite contrary, most view it as a basic right afforded to all, as we understand that some will always have it better than others.

This meme that productive folks are penalized (and failure being rewarded) is slightly misguided, IMO.

Disdain for your neighbour seems to be a very American thing, and it's quite alarming (being a neighbour and all).



Wed, 04/02/2014 - 14:40 | 4618150 lordylord
lordylord's picture

1) "Most people" means that a minority is being victimized. 

2) If I produce more and earn a greater income, I am taxed more.  The brain of a socialist must turn itself inside out to make statements like yours.

3) I love my neighbors and I VOLUNTARILY engage in trade with those of the community.  I have disdain for those who STEAL from me or FORCE me to engage in trade.


You must learn that it is NEVER ok to steal or use force/violence/coercion against another person.  No matter the cause, it is wrong. Don't try to act high and mighty because you voted to steal the wealth and labor of another.  Shame on you.



Wed, 04/02/2014 - 15:08 | 4618264 blackholes
blackholes's picture

You, sir, are hilarious.

You make these statements assuming everyone comes from a level playing field, which you know damn well is very far from the truth.

You are also confusing universal health care in general with marginal tax brackets (a strawman argument at best), which leads me to belive that your point of view is also confused.

A minimum wage janitor (a "hard" worker if I've ever seen one) should not have to forgo their life because they cannot afford proper surgery, just as rich people (who ALWAYS come across their wealth through hard work and greater production, right?) should not get preferential treatment simply because they can afford it.

A healthy workforce is a productive workforce is a prosperous workforce.

Sure, maybe YOUR proposed system is flawed, but that doesn't mean it should be written off wholesale.


Wed, 04/02/2014 - 15:56 | 4618453 lordylord
lordylord's picture

Your rational is FULL of holes. 

1) In a free market capitalist system, everyone is on a level playing field.  Government, which you so love, choosing winners and losers does not make a level paying field and causes inequality.

2) Doctors provide a service.  They can charge whatever they like for that service.  Healthcare doesn't permeate throughout the atmosphere like oxygen.  Your janitor is not entitled to free healthcare.  Healthcare is not a right. EVERYONE has access to healthcare, but it is true that not everyone can afford it.  Stealing from others to pay for your healthcare is STILL wrong.

3) A rich person is rich (ideally) because he PROVIDED goods and services to his fellow man.  Why should this man be penalized?  Rich people who are rich by other means (e..g HFT) are able to do so BECAUSE of government not due to the lack of it.

4) Let's give a janitor a $100,000 surgery so he can go back to sweeping floors.  Sounds productive to me.  Go be charitable with your own money.

You have to realize, government is actually the cause of many problems and not the answer.  What has government EVER achieved without force/theft/coercion?  Your system will come crashing down.  Eventually you will run out of other people's money.  Guaranteed.

Wed, 04/02/2014 - 16:02 | 4618497 lordylord
lordylord's picture

Speaking of hilarious things, it is funny that you never addressed the fact that stealing from one and giving to another is morally wrong.  Or do you not think so? I would love an explanation from someone who thinks it is OK to steal and coerce and authorize violence and force against those who do not agree with you.

Wed, 04/02/2014 - 16:25 | 4618595 TN Jed
TN Jed's picture

Where does this kneejerk reaction of wanting to create a "level playing field" come from?  Must be pretty cushy knowing your scary southern neighbor provides such a large buffer zone leaving you free to forgoe defense and play pattycake with each other. News flash: life ain't fair.  Not everybody makes first team.  Some people are born into wealth and some people are born into Canada, yes? Nobody gets to pick the hand they are dealt, they just play it.  But if I catch you trying to pass cards under the table, we got problems.

Wed, 04/02/2014 - 16:34 | 4618625 lordylord
lordylord's picture

Only in the mind of a socialist is taking from those who produce and giving to those who don't is "fair". Man, the mental gymnastics these people do.  They still never address the fact that theft and force is morally wrong. 

Wed, 04/02/2014 - 16:57 | 4618691 TN Jed
TN Jed's picture

To be charitable is an admirable quality in an individual and a natural result of a successful community free to choose such.  Legislating charity however, is in itself, a violent act.  How do they square that?  Those tender hearted people are just too niave to realize their good intentions are being played by TPTB.

Wed, 04/02/2014 - 17:13 | 4618731 lordylord
lordylord's picture

Wise words.  But remember, that the baker need not do any act of charity in order to benefit his community.  They are already full on bread thanks to him. 

Nice little pictorial:


Wed, 04/02/2014 - 16:37 | 4618630 Kelley
Kelley's picture

Health care is not a government right.


Never has been - never will be.


It might be a moral obligation to help, but it's not for the government to get involved.

Wed, 04/02/2014 - 10:26 | 4617193 Uncle Remus
Uncle Remus's picture

Capitalism. "That's a name I've not heard in a long time. A long time."

Wed, 04/02/2014 - 15:48 | 4618417 ilion
ilion's picture

Why is HFT cheating? After J Ass-smile Corzine I thought everything is legal in the USA.

Wed, 04/02/2014 - 09:27 | 4616946 buzzsaw99
buzzsaw99's picture

cheating, what a nice way to say it.

Wed, 04/02/2014 - 09:32 | 4616957 Ignatius
Ignatius's picture

This whole episode is a weapon of mass distraction.

People have not a clue of how deep this goes....

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