This page has been archived and commenting is disabled.

Why The NYSE Debacle Mattered

Tyler Durden's picture




 

Submitted by Mark St.Cyr,

On Thursday this past week there were a few attempts at crisis management that should go into textbooks (as well as history books) everywhere in years to come as: Crisis Management 101.a – Lessons in Ineptitude.

The responses as to settle the angst in an ever-growing skeptical, as well as frightened investing class was not only inane as demonstrated by the responses (or better yet; lack there of) given at the NYSE by way of “answering” as to why it halted its operation for nearly 4 hours. Was only outdone by what many view as the near insane when one views the steps taken in China to “calm” their markets. Those steps?

Not only did China halt trading in as many as half (reports vary from around 30% to as high as 50%+ depending on the index) of all listed companies trading on their indexes. It’s been reported not only has selling one’s shares been publicly demonized – you can now be arrested with the threat of imprisonment. Add to this, it’s also been reported: if you sold previously this year – you have to buy it all back. Now! Or: see previous sentence. However, “you” is still subjective at this moment. Exactly who at this time is not entirely clear. (i.e., personal, broker, company, etc., etc. Maybe all?) We’ll have to wait and see. Or – till they come to their door. Literally.

Wednesday the Asian markets were once again in free-fall. Japan’s fell breaking the all important psychological level of 20,000. Both China’s large and small caps fell even harder. This after the government stated unequivocally; it would take extraordinary measures to combat the selling frenzy. And – It didn’t work. Only until it launched into the measures I outlined above did the markets in Asia seem to hold from going over the precipice in its entirety. Will it hold? Who knows. Yet, the one thing we do know is: it’s only holding because in effect for all intents and purposes not only is it illegal, it’s backed with the very real threat of imprisonment – to sell.

Is that how one instills confidence? It instills something – however the term isn’t anything resembling “confidence.”

Let’s put some of this into perspective: Think just how unsettling it’s been for the retail “investing” class here in the U.S. of late as they’ve been watching their 401K balances gyrating near daily in ways reminiscent of 2008. Then Monday, they awake to headlines across the media that Greece did the exact opposite of what they were told would happen by the so-called “smart crowd.” Then just as abrupt the implications were front and center to the markets as fear began gripping them not only Monday. But Tuesday, and Wednesday. Suddenly – Greece mattered, and contagion once again swept across the minds of many. Then, adding on to this, we had China along with the other parts of Asia rocked with significant selling pressure during the same period culminating in the likes not seen since? That’s right, 2008.

Headlines ripped across both the financial as well as the main stream media. “Greece …” this. “Euro Zone breakup …” that. “Contagion inevitable …” here. “China collapse …” there, and more. This relentless assault of breaking news across the media had many that have basically tuned out the markets since (did you guess first?) 2008 are suddenly  thinking: “Wait…what?” For these headlines, as well as their implications, are as familiar a warning sign that spark not only memories, rather: the near instantaneous reaction as to get out. Kind of like what happens when you decide to go back on a date with a past romance thinking “It wasn’t that bad, maybe I over-reacted.” Only to realize less than a few hours into it, not only was it as bad – it was worse than you remembered. But I digress.

Then comes Thursday. As all the headlines from China, Asia, and Europe filter through to the morning press. Out-of-the-blue as if the previous wasn’t enough to worry about. This already tentative group is hit with a headline that brings chills to anyone who remembers September 11. “All United Airline flights in U.S. Are Grounded.”

All at once what everyone’s been told “didn’t matter” mattered. And a scramble was on for more information. Such a scramble it melted down the servers at Zero Hedge™ first, then the Wall Street Journal™. (notice not the Economist™, or the Financial Times™, or Bloomberg™, or CNBC™, or the Huffington Post™, or the New York Times™, etc., etc. Draw your own conclusions is all I’ll say. And if you think I’m trying to make a case where there isn’t one. Fox Business™ channel had its highest viewership ever Thursday. I don’t know about the others – they don’t say. Which tells its own story in my view. But to say that all off the sudden “people became anxious and wanted to know more;” would be an understatement.)

As both the media as well as the investing public are trying to come to grips for the implications of what has transpired overnight and into the morning. At around 11:30am EST, the emblematic symbol of capitalism for the U.S.,The New York Stock Exchange™ halts not some – but all trading! (I believe there were a few ancillary programs that were unaffected) And not for 5 or 10 minutes. Rather: for nearly 4 hours! And the response as to why? __________________ (insert crickets here.)

Sure there was some hand-wringing boiler plate “Well it’s probably this. But definitely not that.” canned P.R. mumbo-jumbo. However, once again, for all intents and purposes it was the equivalent of saying nothing. It’s been reported not only did the lowly few traders remaining at the exchange questions fall on deaf ears. So too were some of the actual media covering the outage going unrecognized in queries to any questions. Not just P.R. speak. Actual – would not talk speak.

This calamity of errors on the part of the NYSE™ was not only an example of an out-and-out total breakdown of both crisis management and leadership. It was also a stunning glimpse into just how forgotten the financial crisis of 2008, as well as September 11 is from Wall Street itself. Never mind the public at large. The sheer ignorance as to not inherently understand, nor contemplate the significance of the NYSE as to its symbolic nature to the nation at large by those that are in charge of it today is not only incomprehensible to me. It should be a required case study example in “DUH!” to anyone in seeking management.

Financial mavens understand ever since computers took over the trading floors, what were once the bastions of physical traders – is no more. However, the public at large has no clue. Talk “Wall Street” and the most iconic of images that comes up first and foremost in one’s mind is: The NYSE. And how did the management of the NYSE treat this symbolic edifice in the face of what could only be described as turbulence not seen since the Great financial crash of 2008? No, not like the face of capitalism it’s represented for over 200 years. No, the face that was put forward was – the interface that it’s become. Because now: it’s nothing more than a nice TV set to report from, or maybe rent out for parties. At least that’s the impression one was left with going into the weekend. That’s how bad of an image crisis it now finds itself in.

The traders that still do business there? (as few as there are) Even they complained about not being able to get answers to their questions.  I found that highly credible because what they seem to have forgotten is – they are no longer relevant. Today only High Frequency Trading matters (i.e., the machines) And the NYSE acted in a way that solidified that premise. All the while turning an outlandishly tone-deaf ear to their place in symbolism for the nation at large.

What a complete and total disaster was portrayed by the NYSE in my opinion. So much so I found myself with my head-in-hand more times than I can count. If the president of the exchange had put just half as much time into his choice of words as he apparently does into the fit and finish of his suit – he could have avoided all of this and calmed an already nervous public. It was apparent appearance mattered to him. It just seems not as much to the institutional symbolism of the entity he presides over was what I came away with.

When it comes to crisis management I know what I’m talking about. It’s one of the disciplines I made my reputation in. And anyone with half a brain knows the way this was handled and the choice of words was not only lacking, but the response in general was vacuous. I mean, really: Say nothing? (i.e., P.R. double speak) Avoid speaking all together to select media outlets? Leave people to speculate and wonder on their own? All while following a collapse in Asia, turmoil in Europe, and the grounding of airplanes? Absolutely unacceptable in my book for anyone leading a company of any size. Let alone – The NYSE!

All that was needed to be said was something along these lines:

“We’ve found we have an issue resulting from a software upgrade we just performed. We’re not entirely sure exactly what is causing it. However, at this time what we are  confident of, that it is; in fact; a glitch contained to our systems. With what has transpired overnight in both Europe, as well as Asia, we decided it was prudent and incumbent upon us here at the NYSE to halt our systems and address it as to fix these issues in their entirety. Rather, than the possibility of limping along as we correct them throughout the day. The systems inherent within the financial markets of the U.S. are robust and trading is designed to work around us as we address our issues. Let me remind everyone: this is why we spend so much in technological advances throughout all the exchanges. If any one, and even more of the exchanges has an issue in this ever complex environment – trading in the markets can continue as you can see. As soon as we know more, we’ll let you know. Until then, as anyone can see, the markets are working as designed.”

I wrote the above line directly as I typed taking me no longer to think of it, as it did to type it. It’s not rocket science. That line could have been set on auto-response, and it would have put to rest a lot of the anxiety transpiring within the public at large. Yet, what was the response? Total lack of comprehension for the importance of not only the symbolic importance demanded for a response, but also in the timing, as well as delivery with what else was happening simultaneously. The incomprehensibility still stuns me as I write this.

Not only did the NYSE leadership fail in this regard, it allowed itself to be kicked to the side of irrelevancy by its own hand as well as foot. So much so it will be a wonder if it ever regains any of its former prestige other than its historic facade for the cameras and tour buses.

As a panicked public tuned in trying to find relevant information – there were all the news outlets displaying just how irrelevant the NYSE was. All one heard as you flipped channels, or stations was “Look, there’s really no one even there!” “Hey, is that a bowling alley now?” “Look, they came back on-line and it still looks like a bowling alley!” And on, and on. The media had a field day with its version of “calming the public” by showing just how many ways (or segments they could fill) the markets functioned without the NYSE. All because that’s what the leadership at the NYSE gave them to work with. In other words, they gave them nothing but some P.R. mumbo-jumbo that even a three-year-old would question. So, left to their own devices (and air time to fill) the media did just that – filled it. With how irrelevant they were.

What a total debacle as well as pathetic self-inflicted P.R. disaster the leadership at the NYSE displayed in my view.

Who would have thought, less than 7 years after what is now cemented in the minds of any remaining investment public, that the Great Financial Crisis that nearly took down not only the markets, but almost the entire system as a whole. Along with all of the angst and still unanswered questions that remain to this day. The one place that forgot how important its symbolic place was in the minds of the general public at large was none other than the NYSE itself. Again – just stunning in my opinion.

I mean, honestly. By all appearances from what we all witnessed. It seems someone (or group of someone’s) had so much faith in the system – they felt it wasn’t necessary to have a simple one paragraph coherent message at the ready?  I mean – just in case of another emergency? After what we went through just a few years ago?

The only thing that could be worse for all of us is if they have just as much faith in central banks. For we all know how that’s beginning to shape out now. The Fed. may indeed still have one’s back. But so too did China. Only thing is there…

Not only do they have one’s back – but one’s number. And that number could possibly be one’s new inmate ID. Then again, Greece is solved, right?

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sun, 07/12/2015 - 11:50 | 6302330 ZH Snob
ZH Snob's picture

it mattered because it showed that if the spoiled brat doesn't get his way he takes his bat and ball and goes home.

Sun, 07/12/2015 - 12:31 | 6302476 mvsjcl
mvsjcl's picture

Seems to me like he's criticizing a passel of liars for not lying fast enough or good enough. 

Sun, 07/12/2015 - 13:20 | 6302622 Money_for_Nothing
Money_for_Nothing's picture

Haven't you heard someone say "...at least kiss me first before you...". It is frightening to realize the situation is so bad that people who make their living from lying can't come up with something more plausible.

Sun, 07/12/2015 - 13:44 | 6302725 El Oregonian
El Oregonian's picture

Well, at this point what does it matter! Their (It's) DEAD!

Sun, 07/12/2015 - 13:53 | 6302781 Not Too Important
Not Too Important's picture

The real problem is that spoiled brat has nuclear weapons and has already threatened to use them if he's not voted captain of every team on the planet.

If he's going home, he's going home to get the matches.

Sun, 07/12/2015 - 15:38 | 6303202 robertsgt40
robertsgt40's picture

Who did the software upgrades, Diebold? 

Sun, 07/12/2015 - 11:57 | 6302359 max2205
max2205's picture

Gasparino said it best.  The place is a museum full of actors.

irrelevant 

Sun, 07/12/2015 - 12:19 | 6302427 jbv629
jbv629's picture

Completely agree with max2205. The NYSE is little more than a TV studio these days. Seriously, was anyone unable to trade when the NYSE was in shut down mode last Wednesday? I doubt it. 

Sun, 07/12/2015 - 12:31 | 6302475 Colonel Klink
Colonel Klink's picture

Ahhh, good ol'e Gasbagarino.

Sun, 07/12/2015 - 12:46 | 6302530 Son of Loki
Son of Loki's picture

Max incompetence ... that's why the head of the NYSE is paid $139 million.

 

NYSE Chief Will Collect $139.5 Million

 

http://www.wsj.com/articles/SB106199596095900200

 

 

Sun, 07/12/2015 - 11:58 | 6302361 stant
stant's picture

Motel hell you can enter, but you can't leave. Paging mr nail gun line two(nodebt)

Sun, 07/12/2015 - 13:05 | 6302584 ebworthen
ebworthen's picture

Roach motel.  401K/IRA/Pension bag holders are the intended "roaches". 

The real roaches run the place, and the traps.

Sun, 07/12/2015 - 12:07 | 6302388 RaceToTheBottom
RaceToTheBottom's picture

Paging Baghdad Bob.  Baghdad Bob to WS, please.

Off with all their heads.  If they do, in fact die, then well, maybe they were human, after all.  But I doubt that worry is warranted.

 

Sun, 07/12/2015 - 12:08 | 6302398 Dr. Venkman
Dr. Venkman's picture

Josh Earnest stumbled around the microphone and claimed that it was just a glitch. He looked like he was being marched to the gallows. I can no longer believe even the most mundane or insignificant comment by this administration (the bar was pretty low to begin with.) Something happened. We can only eliminate that which we know is false i.e. That it was just a software problem per .gov.

Mark's piece is trying to teach a lesson based upon a completely contrived explanation. So much thought for so little reality.

Sun, 07/12/2015 - 12:33 | 6302478 Colonel Klink
Colonel Klink's picture

Josh "Earnest", that sycophantic fuck is anything but!

Sun, 07/12/2015 - 12:41 | 6302509 Dr. Venkman
Dr. Venkman's picture

I know the end is near when life imitates a Dickens novel, down to the ironic naming.

Sun, 07/12/2015 - 12:56 | 6302557 Colonel Klink
Colonel Klink's picture

Up is down, freedom is slavery, earnest is a lie!

Sun, 07/12/2015 - 13:57 | 6302791 Not Too Important
Not Too Important's picture

Speaking of slavery...

BBC: People taken from movie theater by police, forced to go in reactor and deal with burning fuel rods — TV: Military picked men off street to battle meltdown — Women, minorities, homeless, and prisoners used by nuclear industry for most dangerous work (VIDEO)

http://enenews.com/bbc-police-grabbed-people-movie-theatre-made-reactor-...

 

 

Sun, 07/12/2015 - 12:13 | 6302410 Ban KKiller
Ban KKiller's picture

"Funny" shit. Funny as in if your pants were on fire. MY pants on fire is NOT funny, just to clarify. 

Truth is dead. Long live the new accounting class! House on fire? Why we will just turn our backs and declare that fire is illegal right this moment. Fire burns down the house? Will it was just YOUR house, no big deal. 

Watching the central planners is a riot. Now their HAIR is on fire! Throw them some petrol, STAT. 

Sun, 07/12/2015 - 12:16 | 6302417 KnuckleDragger-X
KnuckleDragger-X's picture

We are starting to see real chaotic events and as anybody who has studied Chaos Theory knows, sooner or later (likely sooner) one of these events will start a positive feedback oscillation. When that happens we will have a runaway condition and everything the geniuses running this shit show do will likely make it worse, faster. I live in flyover country and while the tidal wave will probably reach here, it will be much weaker and we haven't killed our societal base yet. If you live in one of these blue area's http://www.dumpaday.com/wp-content/uploads/2015/06/pictures-2719.jpg good luck.....

Sun, 07/12/2015 - 12:28 | 6302471 dimwitted economist
dimwitted economist's picture

The (FAKE) Fucking stock market needs to crash... the sooner we get back to REALITY the better off we'll be..

Sun, 07/12/2015 - 12:35 | 6302482 JRobby
JRobby's picture

False flag cyber attack shuts it down before a "real" crash will occur. Then the pigs will pay themselves first. The rest will be(remain) bag holders, which they already are.

Mon, 07/13/2015 - 11:48 | 6306422 detached.amusement
detached.amusement's picture

dingdingding, then all the idiots that believe in global warming can see what an actual positive feedback mechanism looks like!

Sun, 07/12/2015 - 12:16 | 6302418 MedicalQuack
MedicalQuack's picture

I loved the comment made here on the failure of the NYSE "look nobody noticed it went offline" as all were focused on the United Airline router problem, that was so classic!  

In addition, you had the conspiracy folks, Fox included asking "is this a coincidence".  When you listen to all those code novices you get the wrong perception indeed.  This stuff happens all the time with IT system, hardware breaks, software updates go wrong.  Geez..has nobody paid attention to their Tuesday Windows updates that have had issues.  Again the code novices that run off at the mouth to stir and lead consumers in the wrong direction all the time.  

I am a former developer who wrote a medical records system in the early days and oh yes, updates made me nervous.  You do your best and compile everything and test and test and test, but still you never know until that code starts reacting with other code on what "could" happen.  The pressure is immense as one may have worked weeks on an update to improve things and "you have to right" as the consumer never sees or understand the amount of complexities involved.  Here's a good post for those who have never heard it straight from the other side, programming sucks.

http://ducknetweb.blogspot.com/2014/07/programming-sucks-trimming-satan-pubic.html

So Operation Perception Deception is alive and well in the US sadly.  We are tired of fake numbers and this site does a good job of calling the government on it.  Look at what we have running HHS, the six degrees of Bob Rubin, she's a former director of his and when put in office she quickly hire a Citi lawyer to help her.  In addition, please tell your Senator to vote NO on approving Andy Slavitt to run CMS.  Why? He's a one time Goldman Sach banker that's an Algo man.  A few years ago the AMA and tons of others sued him and his subsidiary of United Healthcare, Ingenix as Cuomo in New York found them cheating.  Admittedly he said we knew we had problems but didn't get around to fixing the system that short paid doctors for 15 years with reducing out of network payments, and...all the other major insurers "licensed" and they got stuck with lawsuits as well.  You can search it as its all over the web with look for the key word "Ingenix".  It was a full on Wall Street style Algo Dupe and hurt a lot of doctors and patients too.  

So yes the NYSE mattered in more ways than one.  I don't know what it's going to take to get some accurate perceptions out there and cut out a few lies but it's all in plain sight, its just a matter of what you want to believe, as 60% of the news today is also written by bots who are probably talking to the bots and algos on the exchanges today too.  In a matter of minutes the bot write a story about numbers, doesn't take long at all.  

http://ducknetweb.blogspot.com/2015/06/operation-perception-deception-into.html

We are under the Attack of the Killer Algorithms in more ways than one.  

 

Sun, 07/12/2015 - 12:37 | 6302495 post turtle saver
post turtle saver's picture

I'm going to keep this as simple as possible for all y'all...

- NYSE trading systems are data driven architectures... code matters but you cannot possibly test for all possible data inputs in a system such as this... GIGO rules and edge cases will be found

- You can lead a horse to water but you can't make it drink... if your users insist on building apps that can't readily cut over to your disaster recovery site, whose fault is it truly if trading halts? You were ready, why weren't they? The 4 hour downtime to bring primary back up was choked down because the goddamned client apps weren't designed to seamlessly cut to DR... so naturally everyone blames NYSE... lol whatever

IT guys at these exchanges are paid a lot but they still aren't paid nearly what they're worth given what they have to handle... as for the app developers, quit outsourcing that development to the lowest bidder and find someone who knows how to interact with a HA architecture... fools

Sun, 07/12/2015 - 18:21 | 6303789 ThroxxOfVron
ThroxxOfVron's picture

NYSE should have proceedures in place to isolate apps that could not migrate.

Shouldn't this shit should be as simple as blocking pop up spam on Safari?

If it chockes your flow you block the IP/co-located tube?

Just because Shitadel or Blackcock algos crash or freak out is no reason to punk everyone else who has it together and/or damage your own income stream and credibility.

Mon, 07/13/2015 - 11:50 | 6306436 detached.amusement
detached.amusement's picture

lol....you are seriously going to try and pin that on app developers?  hahaha. 

if you're not seeing that this was done purely to stop the algos from carrying out their function and tanking the market on a ton of shit headlines, you're shy on your required reading

Sun, 07/12/2015 - 16:22 | 6303323 bluskyes
bluskyes's picture

What is described in the first link, is why I, as a UNIX/linux SA live on a farm. It's the only way I can stay sane.

Sun, 07/12/2015 - 12:23 | 6302448 howieg
howieg's picture

The entire hype around the NYSE going down is all nonsense. First on a good day they only get 20%-30% of the trades. They are built on the old market maker system and who needs to pay the spreads. I am not sure my broker even sends them trades anymore since they are always picking off market orders .....  questionable fills. They are the one exchange which wants to go back to a wide bid ask spread (.05-.25) while most active markets can and do trade for UNDER a penny

The electronic markets have basically put them out of business. Their computer systems are legacy and that may finally be giving them problems. If they went away tomorrow it would not impact the actually trading which is was shown when they went down. 

 

Sun, 07/12/2015 - 13:30 | 6302460 ThroxxOfVron
ThroxxOfVron's picture

The real story isn't about the lack of communication from NYSE.

The real story is that the NYSE back-up/emergency exchange servers are either inadequate for purpose, just as easily compromised as the main trading platform, or non-existant.

All the money that should have gone to building and securing the platform and robust redundancies has instead been squandered on HFT conduits, co-location shunts, carrying ridiculous volumes of phantom/spoof data instead of identifying and blocking such just as web ads and pop-ups are blocked with browser apps, etc...

Malinvestment and hubris are only symptoms of poor management, malignant intentions, captured regulators, and disrespect for the value of people's goddamned MONEY being poured through the system.

Over-paid executive douchebags don't give a shit about the markets, the participants, the companies, the legacies, the laws, or anything other than making a fast buck today out of skimming captured institutional flow. 

YOUR money means nothing to them if they can't skim it.

THEIR money means everything to them but they think they can just tax the market instead of offering and providing a service of value to earn their paychecks.

The NYSE isn't a service provider.  It's a taxing authority.  -Lousy at providing service aside from deducting it's vig from your accounts...

Sun, 07/12/2015 - 12:28 | 6302469 Lumberjack
Lumberjack's picture

I will never forget Maria Bartirmo (CNBS) putting the blame on John Paulson back in 08. Good fucking thing there wasn't a fire there because the 'bowling alley' was filled with deer in headlights and nobody would have made it to the exits.

 

Sun, 07/12/2015 - 12:38 | 6302499 p00k1e
p00k1e's picture

China did the right thing by the halts.  The halted stocks should be delisted and the indexes rebalanced.

The U.S. halts must be expected.  The funds in 401K’s are managed. 

Sun, 07/12/2015 - 12:49 | 6302542 JRobby
JRobby's picture

Managed so you can retire into sefdom and take a reverse mortgage for the short time between retirement and processing camp.

Sun, 07/12/2015 - 12:59 | 6302564 Lumberjack
Lumberjack's picture

I wonder how much Hillary will get for her 4 mansions?

Sun, 07/12/2015 - 17:04 | 6303469 Paveway IV
Paveway IV's picture

Stop calling it the processing camp - it's official name is the WELCOME CENTER!

Sun, 07/12/2015 - 13:09 | 6302594 ebworthen
ebworthen's picture

PONZI!

Sun, 07/12/2015 - 13:13 | 6302602 Paracelsus
Paracelsus's picture

Highly leveraged US hedge funds unable to close Chinese positions due to trading halt in China.Panic here as margin calls arriving on Chinese Life Insurance companies listed on NYSE.Someone in authority rings CEO of NYSE and asks for a four hour breather."OK?".

No worries,mate.

Sun, 07/12/2015 - 13:31 | 6302683 Seal
Seal's picture

that lying N-word a$$hole in the WH wants to trap everyone in the market until just before the next election like Bush did when he disbanded the PPT summer '08

Sun, 07/12/2015 - 13:53 | 6302779 I Write Code
I Write Code's picture

Mr. St. Cyr, no, you've missed the point.  There is NO WAY to make yourself look competent standing up and saying that a critical infrastructure component is down now and for an unknown period because YOU SCREWED IT UP.  You can't fix this with PR.  Unless you blame it on Bush or White Privilege or ISIS.  You can't take the blame and come out smelling like a rose. 

It's a minimum of a double screwup, first you broke it, and second you are obviously unprepared for the screwup - when you are NOT supposed to screw it up in the first place and you ARE supposed to be prepared - for anything.

Now in actuality the impact of this is much less than people think, the central exchange is very nearly obsolete, and probably 90% of trading even on NYSE stocks was unaffected by this outage.

But of course this is best case - worst case would have been enemy action.  At least I think that would have been worse.  Maybe not.

Sun, 07/12/2015 - 14:40 | 6302974 disabledvet
disabledvet's picture

Bob Pisani: "And the Statement is coming in right now and it reads: We're the Fucking Banksters and we OWN YOUR ASS.

Back to you at HQ!"

Sun, 07/12/2015 - 16:22 | 6303326 theTribster
theTribster's picture

These were all part of large scale testing scenarios that can ONLY be executed in live environments - no way to know if the NYSE was successfull or not since it is impossible to know what the overall intention was. I suspect these were actually successful tests, ZH and the WSJ were likely just a by-product since people wanted information that clearly wasn't coming through traditional or expected channels (Zh has become that for people in the know, WSW for people that follow the old paradigm). Look for more "anomolies" in the coming days and weeks, I expect them to happen on a consistent basis now - ultimately becoming the new normal before the actual large scale production execution begins, and it will soon (if it hasn't already).

As hard as it is to believe we are heading towards a global distopia that will create larger chasms between classes of people, basically a cast system that will be formalized in the context of governments and the oligachs (read: corporations, iltra high net worth individuals/families). This isn't new of course but it will become much more overt, well, as I said - formalized. I've been a software developer for over 30 years now, I've seen and been a part of the evolution of technology and the coorelation between that evolution and the increasing corruption, dysfunctional goverments and wealth/income disparity isn't a cooincidence. It turns out that technology, in almost every form, is being turned against us, its the ultimate weapoan because if you can control and manipulate it that you essentially control (directly or indirectly) everything on the planet - think about that!

If the people of the world don't rise up against this very soon we will lose all of our freedoms and turn into slaves with every aspect of our lives controlled - every aspect of our lives. I'm still amazed that this has and is happening at such a rampent pace, we really don't have much time before we wake up and our lives are gone - our wealth, our freedoms, our choices - our water! This isn't a conspiracy thing and I'm not wearing an aluminum hat (yet), even people that are sleep walking through life are getting clued in. The people that frequent this site are much more aware of these things than most but because it is so over the top Orwellian even some here have trouble seeing the forrest...Wake up, its going to take a globally concerted effort of large scale, long-tmer civil dissobedience before we can have a chance - but I digress.

Keep an eye on the news (well, you know what I mean) in the coming weeks - many of these anomolies will appear completely benign and dissconnected - power outages for no apparent reason, web sites and parts of the web going down, various forms of communications breaking, etc. Many or even most of these will go completely under the radar and will take some digging to find them. Jade Helm starts this week, not sure if or how that plays into things - it would seem to though. Geo-political problems persist or get worse, Greece, middle east, Russia/Ukraine, China's markets, Latin America financial systems, etc. There isn't a region in the world that isn't experiencing some type of turmoil, ours will come sooner than later now, clearly positions are being taken and final preparations are being made - as they say in the Game of Thrones - Winter is Coming! 

Sun, 07/12/2015 - 16:34 | 6303366 VW Nerd
VW Nerd's picture

The major players were caught too far from the exits with their pants down.  The only way to get them out with minimal damage was to shut the market down.  With high frequency algos running wild, compounded by debt, ALL markets are extremely unstable at this point. CB's and market executives are acutely aware of this.  Their collective, unending easy money policies have nothing to do with economies and everything to do with the extreme instability the markets face.  Central bankers all know any small downturn can be the spark that lights the powder keg. By necessity, central bank policy has corrupted markets around the world. So Thursday, the NYSE hit the panic button, closed the exchange, cancelled and rearranged the necessary trades to achieve the desired outcome, and restarted the markets. This event sadly reinforces the fact that markets no longer exist.  What remains is a racket rooted in fraud.

Sun, 07/12/2015 - 17:40 | 6303619 Dr.Engineer
Dr.Engineer's picture

YOU ARE ALL MISSING IT!!!!

They pulled the plug so the algos didn't flash crash the system cause the positive feedback was follow that cliff down.

Do you really think they don't have the equipment in place to take over? They can do nano-second lookahead for trades but they can't start a backup server.

Get real.

Sun, 07/12/2015 - 18:07 | 6303702 ThroxxOfVron
ThroxxOfVron's picture

No.  YOU are missing it.

Those very same algo farms would have diverted their attention to the other functioning exchanges in a fucking nanosecond and continued to execute -feedback loop or no.

Turning off your light switch can't re-boot a power plant that has alread tripped the big breakers or stop a lightning strike size surge from blowing an overloaded transformer.

The only way to shut off the algo farms is to unplug the algo farms or close off the HFT conduits and dump the co-located servers.  Traffic would fall and also feedback loops would be snuffed.

-but THAT is not what happened.

 

I'll give you this: IF the NYSE was shut down in order to stop an algorithmic feedback loop intensifying inside the algospere then it was demanded by a very BIG client..  -THAT means someone BIG enough to demand such a thing and have it done was in serious trouble.  NO single trader no matter how systemically important should hve the leverage/option to simply call up NYSE and tell them to shut down trading and have the NYSE listen to them and fuck over all of the winning trades balancing whoever is losing atm..

Mon, 07/13/2015 - 06:57 | 6305117 gcjohns1971
gcjohns1971's picture

I don't buy the software upgrade story.

Rollouts are done in system dark time after a full pilot.

Windows is a wonderful Jack of all trades.  But if people are saying the outage was caused by Windows update, then I am saying fire your IT department.   Having Windows run your multi trillion dollar 99.999% uptime server farm is like contracting with a handy-man to build the Taj-Mahal.

The "IT" story is a ridiculous story.  If IT guy is that bad, fire him and the guy who hired him.  

If he was handcuffed by penny-wise, pound-foolish execs or owners, then fire them or find a new exchange.

The standard for service availability is 5 MINUTES down time PER YEAR.

NYC looks more third world daily.

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