This page has been archived and commenting is disabled.
HFTs Get Blamed For China's Market Crash
On Thursday afternoon we warned:
dear HFTs, get ready to be the scapegoats
— zerohedge (@zerohedge) August 20, 2015
That could obviously apply in a number of jurisdictions, not the least of which are US equity markets which suddenly seemed to have lost their way amid Fed confusion, EM turmoil, and an FX bombshell out of China.
Indeed we’ve long said that the vacuum tube crowd will be trotted out as the culprit if and when central planners finally lose all control both of markets and the narrative, and nowhere are authorities losing control of both more quickly than in China, where keeping the equity dream alive via a CNY1 trillion plunge protection scheme is becoming more and more difficult by the day. To wit, from overnight:
Perhaps the biggest surprise about the overnight Chinese stock rout is which followed the lowest manufacturing PMI since March 2009, is that it happened despite repeat sellside pleas for a PBOC RRR cut as soon as this weekend: usually that alone would have been sufficient to push the market back into the green, and it almost worked when in the afternoon session stocks rebounded after dropping as much as 4.7% below the "hard" floor of 3500, but then a second bout of selling just before the close took Chinese stocks right back to the lows with the Shanghai Composite closing at 3,507, down 4.3% on the day, having wiped out the entire 18% rebound from July 8 when the PBOC first threatened both sellers and shorters with arrest.
Which is probably why threats of harm had to be repeated: around closing time, the Chinese SEC said it was investigating major stakeholders of listed companies for illegally reducing holdings.
And because that may not be enough, we got the following this morning, which confirms precisely what we said above:
BREAKING: Chinese securities regulator has issued notice to local brokerages to launch investigations on "quant hedge trading" - state media
— George Chen (@george_chen) August 21, 2015
Official media Securities Times: China's investigation on "quant hedge trading" will focus whether it's "fair" for market, retail investors
— George Chen (@george_chen) August 21, 2015
Well, of course it's not "fair" for retail investors to pay a tax they can't even see on every single trade so algos can scalp billions in exchange for their liquidity provision services that don't really provide any liquidity and rest assured that if someone in the Politburo gets word that some quote stuffing, spoofing algo triggered a sharp move to the downside that in turn cost the PBoC a few extra billion in plunge protection "loans" to CSF, well that will be all she wrote for China's newly-arrived Flash Boys.
»
- 11692 reads
- Printer-friendly version
- Send to friend
- advertisements -
Citadel was banned from trading in China. You can be sure they were using HFT.
Bernanke, who works for Citadel now, apparently advised Citadel to sell China short.
Many consider Citadel an unofficial arm of the Fed. Has the ban on Citadel been lifted in China?
Chinese Officials Flipping Out Over Bernanke Advice to Hedge Fund to Sell Short China
http://www.economicpolicyjournal.com/2015/08/chinese-officials-flipping-...
If I were a HFT trader in China, I'd use the day off to move assets out of there and book a one-way flight.
To where?
Purgatory
The Catholic church says purgatory doesn't exist...
So, never been to Kansas City in the summertime?
Frash boys
So, China is blaming the HFTs......and the entire world is now blaming China....so, if my math works, the entire reason for the global melt is HFTs.
Where I'd be showered with lots and lots of money for ripping off grandma's pension. USA.
Of course this could be part of Langley's proxy war via financial arms.
See: Jim Rickards' Pentagon financial war gaming with China in it https://www.youtube.com/watch?v=_D6jBFmZIF4
This is not new. But who's actually selling?
And to be honest, like Jim Rickards mentioned also 'the chemical attack' under the Headline: 'Asymmetrical warfare', it does look a bit like that here:
China: Sodium cyanide levels well past limit at Tianjin explosion site http://edition.cnn.com/2015/08/20/asia/china-tianjin-explosions/
Or is this really one of those 'small coincidences', if you like to believe in 'coincidences'? ;) https://www.youtube.com/watch?v=2d4wPaBNryA
As I have noted:
HFTS, the new evil speculators.
High Fructose Trade Syrup?
No, that would be regulated by the FDA (when they are not busy backing-up the SECs porn files or counting payoff money from Monsanto)
Can we guesstimate that 2/3 of the Ashley Madison subscribers are .gov employees, mainly US, and take a long weekend?
The chinks should be able to compare the Federal Employee data with the AM torrent and cut extortion letters....., bada bing .......positive cash flow in no time.
(You buy stock at this price or else, roundeyes)
A little time in the re-education camp will show them the error of their ways.....
It is a good strategy to keep HFT's out of China.
Smart move Mr. Chinaman.
They don't need HFT's, they have the central committee. Good enough for Mao is good enough for me......
You need to get the Algo boys working for China's central bank, just like the Fed.
THEN you can engage in some real financial warfare...
Uh, there are some black helecopters outside, what should I do?
If you point a laser at them, they may crash which would probably kill you. If they don't crash you'll still be dead.
;)
Best to just take as many with me as I can then, if it is like that. ;-)
Anyone wanna join me in buying some SPY for Monday? Making a small bet on a 'Sunday night surprise'.
eeemmm.................................No
What else is one to do with spare Lollars? Can't get physical that quickly.
SPY Puts for sure !!!
Plicks
Will the HFT run on an 8088 platform and dial up at a true 2400 baud rate?
Norks.
<---Hang Chinese bankers
<---Hang Chinese HFTs
I do believe that they should prosecute them to the full extent of the law and twice to the extent of the law if they are affiliated with Goldman Sachs or JP Morgue.
Are you serious? There are many things I would call HFT bucketshops, but scapegoats is not one of them.
When an economy is soooo managed like that, I will go after the managers, first. HFT is secondary issue.
Amazing how they can blame HFTs for China crashing, but they dont blame the plug getting pulled on HFTs for the NYSE NOT crashing after the event.
How easy would it have been for someone to put a dumpster sized container in the warehouse holding the sodium cyanide? If the owners of the warehouse were so lax about the storage of dangerous chemicals, doesn't it follow that the employees were too?
And if someone from Mossad, CIA, MI6, showed up at the gate with a small container and a generous quid pro quo,.... well you get my drift.
The crash of the Shanghai market and the devaluations of the yuan ante Tianjin were, as everybody acknowledges, part of a 'currency war.'
In spite of what the government officials have said about Tianjin, everything changed on August 12.
And on the other side of what's possible, 531 points on the NYSE should take Tianjin off the front page for a long time.
Quant hedges can be purchased for live consumption in the local wild game markets.
They make hedge-ka-bobs in HK?
~ DC
the doggeded ate my algo before i could feed`IT...[?]