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1215095 - The Flash Boys Mystery Solved

Tyler Durden's picture




 

Submitted by Sal Arnuk and Joe Saluzzi via Themis Trading,

The blog posts and defenses of high frequency trading in the past week have come with dizzying high frequency. They have taken the form of blog postings by knowns (Larry Tabb) and unknowns (Scott Locklin). Reuters, who sells high speed data, has a very influential blogger (Felix Salmon) who criticized the book before he read it. Bloomberg, who also sells high speed data, has a blogger (Matt Levine) who defends high speed trading almost daily. Modern Markets Initiative – the HFT Lobbying Group – has been writing/tweeting a blog post per hour criticizing Flash Boys. Even Irene Aldridge has weighed in very negatively on Flash Boys – again, without even reading the book. She has even gone so far as to accuse Michael Lewis of taking a secret payoff to write an anti-HFT book.

Boy… some guys say the R-word “rigged” and Charlie Munger’s rats in the granary start to panic and squeal! Flash Boys has struck many a nerve; the truth can be a bitter pill at times. And of course, the pro-HFT defenses are all made by many who are very, very staked in the status quo of our market structure.

Now, bloggers using twitter is one thing; conflicted insiders using television to make their HFT defenses are another. Manoj Narang is such a conflicted insider – which brings us to the number 1215095, which is the title of this morning’s note.

Flash Boys closes with this paragraph:

The application to use the tower to send a microwave signal had been filed in July 2012, and it had been filed by … well, it isn’t possible to keep any of this secret anymore. A day’s journey in cyberspace would lead anyone who wished to know it into another incredible but true Wall Street story of hypocrisy and secrecy and the endless quest by human beings to gain a certain edge in an uncertain world. All that one needed to discover the truth about the tower was the desire to know it.

Michael Lewis is referring to the microwave tower in Pennsylvania with the FCC license number 1215095. It is located in Potter Township, PA (Lat: 40.849278 Lon: -77.710778) The tower is used to beam stock quotes between Chicago and Cartaret, NJ faster than even the fiber optic cable laid by Spread Networks (which Spread laid because it wanted to make faster the transmission of the same stock quotes than the prior mechanism which included slower fiber cable routes). Many now argue that the microwave networks being deployed to speed up stock quote transmissions are actually makes the Spread Networks fiber route obsolete.

Who owns this tower? What about who owns this tower is mysterious, conflicted, and hypocritical?

Manoj Narang, or the entities he has stakes in, owns the tower. The application for the microwave device was filed by Converge Towers LLC, which is located at 770 Broadway, Second Floor. And while Converge Towers LLC is a subsidiary of BCG Cantor Fitzgerald, the application was filed by a misses Elizabeth Kim, who works at Thesys technologies (BCG Cantor – Thesys partnership?) (This is an interesting blog post you should look at by the way… particularly the comments section).

Who is Thesys Technologies? Thesys is an affiliate of Tradeworks, the Red Bank, New Jersey HFT operation that was hired in 2012 to license the MIDAS system to the the SEC. MIDAS, if you recall, is the data solution involving fast feeds that gives the SEC its ability to monitor quotes and trades at the same speeds the HFT firms do. Tradeworx not only provides the SEC with the fast feeds to view the limit order book as HFTs do, it also provides the analytic tools, and the framework and context to draw conclusions. MIDAS also powers the SEC’s market structure website, which consistently puts out analysis that demonstrates that HFT is not the villain it is portrayed to be.

Read this NYT 2012 article by Nathaniel Popper about Narang’s firm, and its relationship with the SEC. From that article:

-          MIDAS was created by Manoj to “help regulators respond to critics of high-speed trading.” This bias in its deployment perhaps explains what some might view as HFT-friendly findings by the SEC to date.

 

-          MIDAS cost the SEC $2.5 million up front, plus recurring fees. It is rumored to be higher than that, with the scope of the program  much larger than initially reported.

 

-          The S.E.C. will still not have the complete picture; it won’t have information on the trades executed in dark pools. MIDAS does not provide that.

 

-          The Tradeworx- SEC initiative is supposedly  managed by Glenn Nixon – who came from the Princeton Physics program.

 

-          Tradeworx makes a ton of money selling data and technology to other trading firms, including microwave towers that beam trading data to Chicago, a faster method of transmission than fiber optic cables.

Manoj’s Tradeworx and Thesys is also partnered with NASDAQ. They just recently signed a major deal that would allow them both to sell algo-testing to NASDAQ’s high speed clients, starting this year. This is in addition to the microwave thing…

With that Tradeworx – Thesys –  Manoj – Midas – NASDAQ context, watch Narang tell Bloomberg Television that speed matters less in today’s markets than it ever has in the history of markets. (15:35 in). So says the man selling speed to the SEC (the American taxpayer), HFTs, and Stock Exchanges. You can’t make this stuff up. It would be humorous if it were not so sad.

Is it any wonder that the SEC has trailed other law enforcement and political entities in examining flaws and abuse in our markets?  The tools that they have procured are sold to them by an HFT firm. That HFT firm makes even more money selling microwave high speed trading transmission to other HFTs and exchanges. You would think such in-your-face conflicts would have made the SEC think twice about their partnership with Tradeworx. You would think the SEC would especially be embarrassed by the appearance of bias from one of their partners/representatives tainting the Flash Boys debate on public television, as Manoj has done all of last week. You would think that the SEC, a body so interested in proper disclosure, would have something to say about Manoj not publicly disclosing his relationships with so many that are entrenched in the status quo.

Sigh.

What is the answer to Michael Lewis’s riddle at the end of Flash Boys? Who owns the Pennsylvania tower with FCC license number 1215095? Tradeworx does. Manoh Narang does. The creator and SEC-entrenched high speed data seller does. 

There were actually two words thrown around in the media all of last week. One of them was rigged; the other was shame. Perhaps this week we all should focus on the S word, and forget the R word.

PS – Please do not let it be lost that Lewis did not come out an tell you who owns the tower with FCC License No. 1215095; he wanted you to care enough to find out yourselves. Change will come only if you care enough to dig, and talk, and be vocal. Powerful.

- See more at: http://blog.themistrading.com/1215095-the-flash-boys-mystery-solved/#sth...

 

 

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Mon, 04/07/2014 - 13:38 | 4632851 Goldenballz
Goldenballz's picture

I wonder if HFT happens in other Exchanges like in Mexico, Brazil, etc...

Mon, 04/07/2014 - 13:47 | 4632859 Deathrips
Deathrips's picture

Shut it down, next banker to "commit suicide" did it.

 

RIPS

 

Edit: Smoke- you beat me to it...

Mon, 04/07/2014 - 13:48 | 4632891 James_Cole
James_Cole's picture

Hell of an entertaining book. 

Mon, 04/07/2014 - 13:52 | 4632900 gmrpeabody
gmrpeabody's picture

Apparently, the 5 voters out of every 100 who are paying any attention to this is less than required to produce shame.

Did I say 5...? 1 or 2 is probably more like it.

Mon, 04/07/2014 - 13:54 | 4632918 Manthong
Manthong's picture

“Slower Fiber Cable”  ??  

Um.. I think a critical technical issue is missing here.

In the real world, a long distance microwave RF tower network cannot exceed the performance of an optimally installed fiber network.

It's a bandwidth and switch thing.

 

The latency and disadvantage of a “slower” (HA HA) long haul fiber network has to be engineered in.  

How do you pronounce "QWERTY"?

Mon, 04/07/2014 - 13:58 | 4632922 gmrpeabody
gmrpeabody's picture

Not to mention they'll have a real reason to blame it on the weather.

(the sales brochure only mentioned distance..., not speed)

Mon, 04/07/2014 - 13:59 | 4632941 Manthong
Manthong's picture

Headline:

"Unexpected Fog Causes Crash"

.. in works in the Maritime world.

Mon, 04/07/2014 - 14:33 | 4633047 Divided States ...
Divided States of America's picture

you cant trust anyone (manoj) who looks like a ferengi (quark)

Mon, 04/07/2014 - 14:59 | 4633112 Oh regional Indian
Oh regional Indian's picture

Looks like many Indian's swinging a lot of power in teh US. Preet Bharara (Indian American) investigatiing the "weeasel" in th eHFT story Manoj Narang (Indian American). Ironic...

 

The slow and steady take over of America. Strange....

Mon, 04/07/2014 - 15:04 | 4633119 Manthong
Manthong's picture

Time to circle the tents?

Mon, 04/07/2014 - 15:13 | 4633146 quintago
quintago's picture

evidence: here you go dipshit.

 

http://www.youtube.com/watch?v=RI0-xthL_y0

 

Mon, 04/07/2014 - 16:39 | 4633448 Joe Davola
Joe Davola's picture

Axion's will make the microwave towers obsolete!

Wed, 04/23/2014 - 00:36 | 4685493 Xibalba
Xibalba's picture

If I ever see that Manoj cat, I'm gonna spit in his direction

Mon, 04/07/2014 - 15:27 | 4633200 Skateboarder
Skateboarder's picture

Come on ORI, no real Indians play around and get 'power' over here. These fools is all whitewashed - Bharara, Jindal, Harris, this Narang piece of gawbage. They're either benign enough to pass American muster, or they get thrown under the bus (Rajaratnam, but I understand he was Sri Lankan).

Don't really give a fuck what color this douchebag is - he's a piece of shit.

Mon, 04/07/2014 - 15:40 | 4633247 Oh regional Indian
Oh regional Indian's picture

True that Skateboaorder. Those are whitewashed Indians. I'm sure you get to see plenty of the real thing in the Bay Area.

Say, if you are looking for a change, get in touch?

via my blog: aadivaahan.wordpress.com

 

I've just launched into something very interesting. :-)

 

ori

Mon, 04/07/2014 - 15:06 | 4633123 Lewshine
Lewshine's picture

The HFT boys are also integral in keeping the market at these nosebleed levels. Kill the algo's and this fraud of a market would plunge 30% in a day.

You can watch these sell offs and see where the machines draw the line in the sand.

Don't pay any attention to "100 / 200 day support levels" - You will get killed by the machines chasing theory...Without an explanation!!

 

 

Mon, 04/07/2014 - 20:37 | 4634214 alexromanl
alexromanl's picture

I believe a whole industry begs to differ.  There is an over 3 millisecond advantage in the NY/Chicago route if you go RF instead of fiber. As the attached suggests, you can't ship gigs of data, this is just for trade execution; and, you can't use your run-of-the-mill cell-phone tower equipment, you ought to use "military-grade" settings.  This is not cheap, but highly profitable in my opinion. 

http://www.cielonetworks.com/site/white-papers.html

Mon, 04/07/2014 - 13:52 | 4632912 redpill
redpill's picture

Think of the time and capital spent on this endeavor that provides ZERO value to our economy.  This shit makes real estate agents look like the most productive members of society.

Mon, 04/07/2014 - 13:59 | 4632938 Bangin7GramRocks
Bangin7GramRocks's picture

Exactly! This is the real crime. The entire industry produces nor provides anything to society. Billions of dollars wasted to steal from other investors. What a wonderful financial system we have here.

Mon, 04/07/2014 - 14:05 | 4632956 disabledvet
disabledvet's picture

maybe that's why REIT's are still the best performing asset class YTD.

I think we may have reached "peak political motivation" here...but we'll see.
My personal view is that to avoid war in Eastern Europe (generalized...first time since WWII) is that when everyone agrees territorial integrity in Europe is inviolable that a "coalition of the willing" means business and isn't afraid of saying so in public.

70 years of peace that has only known 2000 years of war strikes me as more than enough reasons to put this genie back in the bottle.

I do fail to see the gain in making threats but not following through.

I do give credit to President Putin et al in this regard..they are not afraid to simply start something and call it nothing.

And indeed..."flight ME 370, flight ME 370" it all is.

Mon, 04/07/2014 - 14:45 | 4633073 SoilMyselfRotten
SoilMyselfRotten's picture

But, but, Bennie buttboy said it added liquiditiy

Mon, 04/07/2014 - 16:33 | 4633114 Griffin
Griffin's picture

This problem has been a menace for quite some time now.

http://www.telegraph.co.uk/finance/markets/8700226/Lord-Myners-calls-for...

 

Those HFT parasites will rape this market until its dead and then eat the corpse.

Its a bit optimistic to imagine that those banksters that have destroyed the US economy and caused problems all over the world might at some point feel shame.

Shame is a feeling reserved for the slaves, like fear and feeling small.

 

 

 

Mon, 04/07/2014 - 13:51 | 4632908 y3maxx
y3maxx's picture

...Minoj next to embrace the Nail Gun/Jump from an Office Bldg suicide.

Mon, 04/07/2014 - 14:35 | 4633051 Kirk2NCC1701
Kirk2NCC1701's picture

Manoj Narang is NOT Jewish?  WTF!?  I thought everything was their fault.  Just kidding, ok.  So lighten up, homeboys.

But, I suppose that he is a dual citizen (Indian & US).  Literally.

Mon, 04/07/2014 - 13:55 | 4632923 Stoploss
Stoploss's picture

The site is gone too.  404

Mon, 04/07/2014 - 14:06 | 4632957 Ralph Spoilsport
Ralph Spoilsport's picture

I think they just posted a garbled link above. Try this link to get to the article - http://blog.themistrading.com/1215095-the-flash-boys-mystery-solved/

Edit: It was working 10 minutes ago. (shrugs)

Mon, 04/07/2014 - 14:41 | 4633065 Uncle Remus
Uncle Remus's picture

It's working outside the US

Mon, 04/07/2014 - 15:14 | 4633152 NoDebt
NoDebt's picture

It's working inside the US.

So, I guess that means its working now.

Mon, 04/07/2014 - 14:06 | 4632961 Confused
Confused's picture

Still down. 

Mon, 04/07/2014 - 14:14 | 4632980 seek
seek's picture

Remember that they're fucking with guys that are dropping significant fractions of a billion dollars to drop their latency by 2-3 milliseconds.

Someone with that kind of network bandwidth and tech expertise and most importantly, the sociopathic belief that they're above the law, can easily take out a small blog site.

Is it down link 

Mon, 04/07/2014 - 14:09 | 4632959 Deathrips
Deathrips's picture

They forgot shame...really?

 

Release the pillory!!!

 

http://www.pilloryhistory.com/

 

RIPS

http://www.pilloryhistory.com/cs2s3.jpg

Mon, 04/07/2014 - 13:55 | 4632924 ShorTed
ShorTed's picture

Yes, these guys are trying to export it globally.  Fat profit with n risk (to them at least).

Mon, 04/07/2014 - 14:30 | 4633040 HellFish
HellFish's picture

It's spelled Cateret, not Cartaret.  Dump either way.

Mon, 04/07/2014 - 15:17 | 4633162 ParkAveFlasher
ParkAveFlasher's picture

Actually, it's Carteret.  Dump is correct.

Mon, 04/07/2014 - 17:09 | 4633542 Tom_333
Tom_333's picture

Why did a book strike a raw nerve. Evyrone I talk to has known about this for years. And it´s not like it hasn´t been written and debated before this book. Why the all this outburst of feelings? Now? What with this "probe" by FBI...? This just doesn´t make sense. Soon they´re gonna squeeze the kidney stone of wisdom that the markets in toto are rigged. So what? Everyone already knows. Has to be something else.Things falling apart and blames to be placed. Or something like that.

Mon, 04/07/2014 - 18:29 | 4633821 newdoobie
newdoobie's picture

Because Mike makes the subject enjoyable to read about. Average schmucks don't read stories unless it has a personal touch. He's a much better author than trader lol

Mon, 04/07/2014 - 18:38 | 4633847 Iam_Silverman
Iam_Silverman's picture

"Why did a book strike a raw nerve."?

Good question.  I wonder if this will have the same effect of a movie that parodies muslims.  Will there be mass protest in New York?  Will the UN and some embassies be stormed and their ambassadors killed from bunga-bunga?  Someone needs to make sure that the Wall Street Terrorists are held at bay!  Does Blackwater also supply armed guards stateside?

Mon, 04/07/2014 - 18:22 | 4633795 Clowns on Acid
Clowns on Acid's picture

The answer is a resounding YES. Just not as many actual trades / volume.

Mon, 04/07/2014 - 13:39 | 4632853 Seasmoke
Seasmoke's picture

Pull the fucking plug !!!!

Mon, 04/07/2014 - 13:52 | 4632911 McMolotov
McMolotov's picture

Pull the fucking (shitgum) trigger.

Mon, 04/07/2014 - 13:45 | 4632860 ebworthen
ebworthen's picture

Yes, whatever happened to Shame?

It served a very useful purpose.

Bring back the stockade and public humiliation.

Mon, 04/07/2014 - 13:46 | 4632882 flacorps
flacorps's picture

Shame would imply a certain unwillingness to interact with the community at large (in some sense perhaps a defense mechanism to avoid being spat upon and harangued).

However, if you're in the .01% you need not interact with the public at large, and your peers will toast your success with Dom and Cristal and there is no more need for shame.

At some point though you may wish for a cast-iron collar.

Mon, 04/07/2014 - 13:52 | 4632915 Herd Redirectio...
Herd Redirection Committee's picture

The only thing sociopaths fear is being exposed as sociopaths.

No sociopath has ever been rehabilitated in human history.

Mon, 04/07/2014 - 14:39 | 4633058 scraping_by
scraping_by's picture

Shame's a perspective thing. When Harvey Pitt, Shrub's choice to run the SEC announced the SEC would be a service organization for the stock market, he laid out the measuring stick for all official actions. Now, the SEC would be ashamed to get in the way of accumulation, whatever the reason.

Mainstream college economics now measures everything is money. More good, less bad. Those who worship money have a religious fervor so settling for less is a sin. And nobody wants to be a sinner, right?

Mon, 04/07/2014 - 13:41 | 4632862 AmericasCicero
AmericasCicero's picture

Ohhh, focus on the "S" word...I guess I don't need this whetstone after all.

Mon, 04/07/2014 - 13:44 | 4632875 McMolotov
McMolotov's picture

The Big Club doesn't give a shit about shame.

Mon, 04/07/2014 - 13:55 | 4632921 ParkAveFlasher
ParkAveFlasher's picture

"That's why I'm richer than you." - Mr. Shame, Himself, spoken out loud

Mon, 04/07/2014 - 13:51 | 4632888 Dr. Engali
Dr. Engali's picture

Shame...Lol... Like they give a fuck. The bankers held the country hostage as they stole 750 billion dollars for a bail out, then they rewarded themselves with the largest bonus season ever. Shame my ass.

Mon, 04/07/2014 - 13:52 | 4632914 Grande Tetons
Grande Tetons's picture

For a good time call 867 5309. 

https://www.youtube.com/watch?v=axLRUszuu9I&feature=kp

If they right it on the bathroom wall...it is for pulbic use. No revelation here. 

 

Mon, 04/07/2014 - 13:53 | 4632917 gjp
gjp's picture

Stole a lot more than that.  Both before and ongoing.  Shame left the building ages ago.

Mon, 04/07/2014 - 14:14 | 4632986 disabledvet
disabledvet's picture

don't forget AIG. that was 180 billion for a single company..."plus the 100 million dollar payday to the guy in London who was doing the stupid/illegal thing" plus the big Party in Beverly Hills to celebrate the bailout regime.

"Lest we all think it was all of, by and for the Bankers."

We've got a regular who's who slopping at the Federal Trough...none of whom ever planned on doing anything but throwing the USA, an entire war effort and every soldier, sailor, airman and marine who ever served ever "under the bus."

Don't mistake what's going on for lacking ambition.
Indeed if 9/11 was pre-planned then either it was the greatest plan ever...of the worst.

I still don't even know if ME 370 ever even existed actually.

Mon, 04/07/2014 - 14:20 | 4633007 logicalman
logicalman's picture

Shame is a word that doesn't seem to be in the Bankster Dictionary

Mon, 04/07/2014 - 14:30 | 4633041 Toolshed
Toolshed's picture

The only shame for banksters is............getting caught.

Mon, 04/07/2014 - 19:25 | 4633996 BringOnTheAsteroid
BringOnTheAsteroid's picture

Like "oh, what a shame I got caught'.

Mon, 04/07/2014 - 18:19 | 4633781 Clowns on Acid
Clowns on Acid's picture

Yeh Doc.. wonder why Lewis didn't write a book on that TARP shiite, and subsequent generous bonuses when they should have been in Ch 11 restucturing. Feckin' thievin' sociopaths...

This HFT shiite is just poppycock compared to the TARP and other clandestine (Goldman being given a "Banking" license) outright fraud committed by the banks and Fed.

Mon, 04/07/2014 - 13:50 | 4632899 GtownSLV
GtownSLV's picture

Have to call BS on this one. A microwave hop is only good for 40 or so miles with line of sight. Then the signal needs to be converted by base radio and re-enter the fiber back haul network anyway. Plus with all the weather considerations, MW's are no where near as reliable as fiber.

Mon, 04/07/2014 - 14:01 | 4632944 ParkAveFlasher
ParkAveFlasher's picture

So..."weather-related" actually has a grain of truth to it (wink wink)...can towers be set up in an array to "bounce" or "repeat" to effectively send the signal over the round earth?

Mon, 04/07/2014 - 14:29 | 4633039 Toolshed
Toolshed's picture

There are numerous ways to overcome those limitations. Many MW transmissions are not terrestrial point to point, like some HFT pimps want you to believe. There are numerous forms and methods. Digital is better than analog for example. MW can be beamed from station to satellite to station, or involve multiple satellite relays to reach any point on Earth. The HFT defenders are full of crap and spreading said crap far and wide. Can't have those rigged markets fail now, can we? Many more sheep to shear! Scam on!!!

Mon, 04/07/2014 - 15:19 | 4633165 ParkAveFlasher
ParkAveFlasher's picture

Global reach ... that means anyone with data that is known, can be managed.

Mon, 04/07/2014 - 14:01 | 4632946 Doom and Dust
Doom and Dust's picture

That's why they are erecting towers every 40 miles or so with line of sight. Read the fucking book.

Mon, 04/07/2014 - 14:08 | 4632968 GtownSLV
GtownSLV's picture

I don't need to read a fucking book to know something is bullshit. Every major communications company in the world is moving away from microwave to fiber because MW is slower and less unreliable.

Mon, 04/07/2014 - 14:21 | 4633011 flacorps
flacorps's picture

That must be why they just built a large antenna with two microwave dishes on it behind Tibbets lumberyard at SR 54 and US 41. To unreliably relay all those signals that will shortly be switching to fiber.

Mon, 04/07/2014 - 14:21 | 4633012 Toolshed
Toolshed's picture

You are so very full of crap GtownSLV.

Mon, 04/07/2014 - 15:13 | 4633149 gmrpeabody
gmrpeabody's picture

Microwave has issues and limits that favor fiber..., at least in the mass transfer of data.

There are some specific applications where MW would be best.

Mon, 04/07/2014 - 16:44 | 4633464 WillyGroper
WillyGroper's picture

B4 I left telco, they were converting T1 ckts @ the towers for IP back haul adding a buttload of multiplexers. In my state now, they are putting up a tower every fricken mile in prep for 5G. It's my understanding they xmit (4G) up to 21 mi. 

God help the EHS. They're going to need it. 

Mon, 04/07/2014 - 14:09 | 4632974 ParkAveFlasher
ParkAveFlasher's picture

Thanks, that answers my question. 

Mon, 04/07/2014 - 14:17 | 4632997 Toolshed
Toolshed's picture

BS is right. A quick bit of research reveals that you are either less than fully informed, or being deceptive with your comment. There are many forms of MW transmission, and many ways to overcome the drawbacks you point out. My following question seems relevant under the circumstances:

Do you have any affiliation with the HFT industry, and if so, which HFT outfit do you work for?

Well?

Mon, 04/07/2014 - 13:56 | 4632927 Yen Cross
Yen Cross's picture

   Someone needs to tie Manoj Narang to the top of that tower with a nice thick tinfoil skullcap...

Mon, 04/07/2014 - 14:20 | 4633006 Toolshed
Toolshed's picture

"  Someone needs to tie Manoj Narang to the top of that tower with a nice thick tinfoil skullcap..."

Agreed. However, would it not be more efficient to just "banksterize" the scum with a single bullet to the head? Seems like a trend we can all enjoy.

Mon, 04/07/2014 - 16:17 | 4633370 Yen Cross
Yen Cross's picture

  It fires 6000 nails in between charges. That'a a lot of dead bankers. :-)

Mon, 04/07/2014 - 14:22 | 4633014 logicalman
logicalman's picture

Not any more.

Mon, 04/07/2014 - 13:57 | 4632933 replaceme
replaceme's picture

Have you no sense of decency, sir? At long last, have you left no sense of decency?   Whoa, let me cut you right off there, sir - no.  No decency, no qualms about any of this - can I go now?  I got a hooker and just a sick amount blow to snort off her ass to get to...

Mon, 04/07/2014 - 13:58 | 4632936 alexdg
alexdg's picture

and now their blog server is down with a DOS attack. hft folks thinkg "must kill the messanger!"

Mon, 04/07/2014 - 14:01 | 4632943 BrigstockBoy
BrigstockBoy's picture

Comment on blog referenced: "Manoj Narang (Tradeworx) has featured largely in the Flash Boys “debate”, stone-cold challenging Lewis on everything and strongly praising the SEC’s surveillance capability without revealing his role with MIDAS. Hunsader claims that the SEC does not/can not delve into sub-second trades…and Manoj trades sub microsecond and maintains it’s all good, the SEC is on it. At the same time Manoj repeatedly acknowledges the whole HFT industry trades off direct feeds against the consolidated SIP price feed which, according to Hunsader, is a violation of Reg NMS. It’s all hiding in plain sight. It’s weird."

 

No, it's criminal...

Mon, 04/07/2014 - 14:01 | 4632947 malek
malek's picture

Michael Lewis must have laughed out loud that exactly Manoj Narang was invited by Bloomberg to debate him.

Mon, 04/07/2014 - 14:09 | 4632973 Confused
Confused's picture

Could not have been by chance. Either he wanted to be there, or someone else told him to be there. 

Mon, 04/07/2014 - 14:04 | 4632955 Uncle Remus
Uncle Remus's picture

You can't shame a reptile.

Mon, 04/07/2014 - 14:06 | 4632962 Silver Bully
Silver Bully's picture

"You can't shame a reptile."

Exactly. How are you going to bring shame to a 'human being' who isn't capable of feeling any? If they had shame, they would never have done this in the first place. Shining a light on them only causes them to get caught. They won't learn their lesson. They'll only set up shop somewhere else. Unless you ban them from the industry for life, or throw them in jail.

Or both.

Mon, 04/07/2014 - 14:20 | 4632960 Dr. Engali
Dr. Engali's picture

Speaking of flash boys, it looks like they are providing plenty of liquidity today. The momos are all broken trades.

Mon, 04/07/2014 - 14:17 | 4632989 trader1
trader1's picture

solution: retire all forms of short-term, speculative financial markets.  all trades are subject to a minimum 1-year hold.

 

 

Mon, 04/07/2014 - 15:36 | 4633230 gmrpeabody
gmrpeabody's picture

If that ever came to be..., you would have to change your name to bagholder1...

Just saying...

Wed, 04/09/2014 - 13:47 | 4639952 trader1
trader1's picture

that deserves a green for laughs!

actually, i would disappear from ZH if such a thing came to pass.  one can only hope...

Mon, 04/07/2014 - 18:12 | 4633748 Clowns on Acid
Clowns on Acid's picture

Are you Amish ?

Mon, 04/07/2014 - 14:15 | 4632992 Ignatius
Ignatius's picture

Modern version of intercepting the telegraph horse racing wire.

More distraction from the bigger crimes. 

If it's all across the MSM then it's usually meant to be all across the MSM.

Mon, 04/07/2014 - 14:34 | 4633050 insanelysane
insanelysane's picture

In the 1980's you needed to setup a network of people that could send a pager the insider information as it was discussed at meetings throughout the day.  Fast forward to now when you set up a network of computers to give you the data.  Remember when pagers were cutting edge technology.

Mon, 04/07/2014 - 14:20 | 4633010 Al Huxley
Al Huxley's picture

Most of Lewis' critics are just mad because he tagged them with the 'flashboys' moniker, which sounds kind of faggy, and really grinds against their 'masters of the universe' self image.

Mon, 04/07/2014 - 14:22 | 4633015 StarfishPrime
StarfishPrime's picture

Google earth link for those interested: click here

Mon, 04/07/2014 - 14:42 | 4633067 Dre4dwolf
Dre4dwolf's picture

One measly tower?

In greece, they tried to build a cell phone tower near where we have a vacation home, the village people gathered up one night and burnt it down because they said it would give everyone in the village cancer.

 

;) not advocating anything.

Mon, 04/07/2014 - 14:51 | 4633083 WTFUD
WTFUD's picture

. . .but but the SEC is on the case. . .working on our behalves. . . .are yooz insinuating they're in on the ponzi scam heist? Whooda thunk?

Mon, 04/07/2014 - 14:56 | 4633098 alangreedspank
alangreedspank's picture

So basically, as per Mediocritas explained which I think made sense, the books you poll from the current exchanges are "soft" if not outright BS since layers and layers of fake orders can be placed, and withdrawn. So HFTs are not really front running with their competitors information (which I think would have been outright criminal), but rather exploiting a flaw in the exchanges.

In this case, you can't really blame the players for kicking the ball in the new spaces after the referee widened the goal.

I think Lewis's proposition makes sense, there are market based solutions such as creations of new exchanges that of course will need tweaking as they go. In the meantime, if you bother with short term trading, well, you need to go HFT and come up with the best algos or....stop trying to reap gains in the short term.

Much less controversial than I thought IMO.

Mon, 04/07/2014 - 15:41 | 4633249 ebear
ebear's picture

"I think Lewis's proposition makes sense, there are market based solutions such as creations of new exchanges that of course will need tweaking as they go."

If I were running institutional money, I'd be routing some of my trades through IEX and doing a comparative analysis vs other exchanges.  I'd also be in contact with other institutional managers encouraging them to do likewise.  I would also let IEX know what I'm doing, thus giving them time to prepare for what would likely be a big jump in volume.

Going by the recently increased volume on IEX, I'd say something like this is already underway.  

Mon, 04/07/2014 - 15:06 | 4633124 Latitude25
Latitude25's picture

Faster than fiber optic?  Faster  than the speed of light?  LOL OK so there are switching delays and so fiber optic has switching delays that are greater than those of MWs.  At least we haven't violated the laws of physics yet but those are the only laws not violated.

Mon, 04/07/2014 - 15:19 | 4633166 cossack55
cossack55's picture

They are also bdginning to have trouble with the whole ignore the Laws of Thermodynamics thingy.  Entropy anyone?

Mon, 04/07/2014 - 15:31 | 4633206 malek
malek's picture

Light pulses in an optic fiber travel approximately 2/3 of speed of light. That's mostly because light doesn't travel in a straight line following the fiber, but zigzags by getting reflected from the surface countless times.

Speed of microwave in air is pretty much speed of light.

Mon, 04/07/2014 - 18:08 | 4633734 Clowns on Acid
Clowns on Acid's picture

Yeh but what if it rains..? Thunder storms....back to the Internet connection ?

Mon, 04/07/2014 - 15:07 | 4633129 Emergency Ward
Emergency Ward's picture

I wonder why they don't rebuild these facilities next door to each other or even in the same building?  Then they could fight over proximity in the same house.

Mon, 04/07/2014 - 15:16 | 4633144 ThisIsBob
ThisIsBob's picture

If these guys could get their hands on a Hardon Collider, they could get quotes before they happened.

 

I'm the fastest man in Siam, yes I am.

When I call on my sweethart, I get there long before I start.

I'm the fastest man in Siam, I know I am.

 

Mon, 04/07/2014 - 15:36 | 4633231 flacorps
flacorps's picture

Funniest typo I've seen all day.

Even funnier if applied to the actual name of the actual device:

"Large Hardon Collider"

Mon, 04/07/2014 - 15:48 | 4633278 ebear
ebear's picture

Sherman, set the Wayback Machine for September, 1929.

Mon, 04/07/2014 - 15:15 | 4633155 kchrisc
kchrisc's picture

I will say it again: Brad Katsuyama of the IEX will be under indictment or dead within the next three years.

He threatens too many people and $$$, has too few crony connections to pols and crats and is not a 'tribe' member.

Mon, 04/07/2014 - 15:18 | 4633164 polo007
polo007's picture

http://www.theaureport.com/pub/na/ted-dixon-what-gold-stock-insider-trading-tells-us

The Gold Report: The price of gold fell more than 6% in March. To what do you attribute this?

Ted Dixon: Gold took a one-two punch in late March. The first was the widening of the renminbi trading ban in China by 2%, which added extra costs to buying and hedging gold. The second was the surprisingly hawkish tilt of the U.S. Federal Reserve, pointing to interest rates rising a little bit sooner. Tighter monetary conditions do not usually benefit gold.

TGR: Increased import duties in India haven't reduced gold buying there. Why would China be different?

TD: I think the flows are different. In China, there is a lot of financial activity related to gold, whereas in India gold buying is cultural and driven by consumer consumption.

TGR: We've heard about greatly increased governmental buying in China, have we not?

TD: There have been rumors of that, and the Chinese media has called for the government to boost its gold reserves. That could provide a longer-term counterbalance to the shorter-term renminbi pressure.

TGR: DataQuick's latest U.S. national homes sales snapshot shows that "prices are flatlining or drifting lower while sales are sinking like a stone." Meanwhile, "The big private equity firms [are] exiting the [housing] market." These data don't suggest a U.S. economic recovery, do they?

TD: Basically, insiders are telling us that stock prices now have priced in a lot of good news, so it would be interesting to see how they react to whips to the downside. One has to be cognizant that much of the U.S. equities rally has been driven by the Fed and, arguably, has little to do with GDP growth one way or the other.

TGR: With regard to this hawkish tilt, it has been assumed for several years that we'd see higher interest rates and an end to quantitative easing (QE) only after an economic recovery. Given how weak the U.S. economy remains, can we assume that the Fed believes it is close to exhausting the utility of zero interest rates and quantitative easing?

TD: The Fed has a big ticking time bomb on its balance sheet. It is still piling up reserves, and I'd love to be a fly on the wall in staff meetings that don't get reported. I have to assume there is much concern about what happens to those reserves, particularly if the economy does surprise on the upside. In this sense, the low-altitude economy has been a blessing for the Fed.

We may have a little game of bluff going on here. The Fed is taking a hawkish stance now, saying it has to move rates up earlier, but, of course, if the economy remains weak, and the Fed has to backtrack, that opens up risks on the other side. The Fed has been running a big monetary policy laboratory over the past few years, and sometimes in laboratories accidents happen. At this point, however, the stock market seems to have assigned a very little risk premium to something bad happening.

TGR: It has been argued that if you remove the Fed's monthly stimulus from the monthly GDP report, GDP is actually shrinking, not growing.

TD: The Fed has certainly manipulated the economy. It has picked its favorite sectors, housing and autos. I believe that Operation Twist and QE have hurt the commodities base because they have favored interest-sensitive industries. Now, however, these industries will have to stand on their own two feet, and we'll see how this experiment in industrial policy works out. Usually, planned economies have a day of reckoning when stimulative measures run out of steam.

Ted Dixon is co-founder of INK Research (Insider News and Knowledge), Canada's first online financial news and research service dedicated to providing data on public company insider trading. (Free services are found on CanadianInsider.com and InsiderTracking.com.) He worked previously for Connor, Clark & Lunn Financial Group in portfolio strategy and product development, the Fraser Institute as an analyst, TD Bank as a treasury specialist and the Vancouver Stock Exchange as a floor trader. He has lectured in corporate finance at the BC Institute of Technology and is a Chartered Financial Analyst and member of CFA Vancouver. He holds a Master of Business Administration in financial management from the University of Chicago.

Mon, 04/07/2014 - 15:25 | 4633192 Qwellen
Qwellen's picture

I consider myself a mostly informed person but trying to explain this to the sheep has proven nigh impossible....Until now. Just have them go watch The Sting and it pretty much explains everything.

Mon, 04/07/2014 - 17:37 | 4633622 Zigs
Zigs's picture

The only question is who takes the phony hit at the end before they all walk away laughing.

Mon, 04/07/2014 - 15:32 | 4633218 Save_America1st
Save_America1st's picture

The "R" word...I thought he was going to say "Rigger".  lol  ;-)

Mon, 04/07/2014 - 15:35 | 4633226 Philalethian
Philalethian's picture

Crime and corruption is the normal of the modern day. They can only stand on the sloppy nasty pile of shirt for so long. The babylonic house of the moneychangers falls soon. 

The Oligarchy Doesn’t Care About Democracy, Just Rigged Markets:

http://rinf.com/alt-news/breaking-news/oligarchy-doesnt-care-democracy-j...

 

 

Mon, 04/07/2014 - 15:43 | 4633253 polo007
polo007's picture

http://truthfrequencyradio.com/how-far-will-stocks-fall-this-time-when-the-fed-decides-to-slow-down-quantitative-easing/ 

From the time that QE1 was announced to the time that it ended, the S&P 500 rose from about 900 to about 1,200.

When QE1 ended, the S&P 500 fell back below 1,100.

In a panic, the Federal Reserve first hinted at QE2 and then finally formally announced it. That round of QE drove the S&P 500 up to a bit above the 1,300 mark. 

Once QE2 ended, there was another market correction. The S&P 500 fell all the way down to 1,123 at one point. 

In another panic, the Federal Reserve first announced“Operation Twist” and then later added QE3. Since that time, the S&P 500 has been on an unprecedented tear. At this point, the S&P is sitting at about 1,800.

Mon, 04/07/2014 - 15:56 | 4633254 epwpixieq-1
epwpixieq-1's picture

Oh boy. Their using Hertzian radiation, to transfer signals, is so 20th century slow, and wastefully from resources point of view. Transferring this information via terrestrial electric vibrations, as Tesla did, would make all these type of radiation transfer of information looks like a childish game. Of course, this is not to say that their scalping is good, but hey, if you do something like this at least use some innovating technology, so after your demise ( at some close point in the future ), something useful is left out of your insane wealth transfer.

Imagine, what kind of backup Tesla would have had if J.P. Morgan had realized, in the future his bank can do flush trading with Tesla's technology. He probably would have thought twice and would not have deprived resources and bankrupted Tesla, second time (after the first time burned his lab).

Mon, 04/07/2014 - 15:56 | 4633307 Diplodicus Rex
Diplodicus Rex's picture

Why can I not find most of the information posted in this article? Am I looking in the wrong place?

http://wireless2.fcc.gov/UlsApp/AsrSearch/asrRegistration.jsp?regKey=261...

 

Mon, 04/07/2014 - 18:32 | 4633826 ThroxxOfVron
ThroxxOfVron's picture

The microwave tower isn't supposed to WORK.  It's a fucking .GOV boondoggle; an expensive mirage of high tech gadgetry designed to siphon off tax payer funds and promote non-existant enforcement capabilities.  The enormous price tag of the tower is only exceeded by the outrageous long term maintenance and management contract and the repackaged bundle of mircro-soft/c+ derived cobble of color-coding 'analytics' software...   Foggy day, blue screen of death; $3,600/hr. emergency tech call for a system hard-reset from the hidden button inside the bulky plastic case with the little x86 in it...

Mon, 04/07/2014 - 20:24 | 4634181 SweetDoug
SweetDoug's picture

'

'

'

I am reading this article to my dear ol' Mud'da. She's worth a boatload, but got out of the market for exactly the reasons above.

She just said, "It's gonna get worse."

You can't make this shit up anymore.

The dirty shitrats are playing everyone off against the middle.

You don't think the weasels at Thesys are making sure the HFT stuff they don't want the SEC to see, doesn't get seen now, do you?

 

Na-aa-aa-aah…

 

•?•
V-V

 

 

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