This page has been archived and commenting is disabled.

Presenting The "Rise Of The HFT Machine" - Visual Confirmation How SkyNet Broke The Stock Market On US Downgrade Day

Tyler Durden's picture


Zero Hedge has not been focusing much on the topic of our broken equity markets recently because if by now, following over three years of coverage, someone is not aware just how fragmented, manipulated and largely broken the market truly is, they never will. Yet every now and then it worth reminding readers who may have stumbled on this blog recently, just how bad things are in graphic format. Our friends at Nanex, who are by far the best forensic analysts of everything that is busted with the US stock market, have completed a masterpiece analysis showing the churning (packet traffic) in the various fragmented US market venues, from the NYSE to the Nasdaq to BATS and so forth, on a daily basis beginning in January 2007 and continuing through today. While the "rise of the HFT machine" over the past 5 years, following the adoption of Reg NMS, will hardly be a surprise to most, what is stunning is the first animated confirmation of the market terminally breaking on August 5, 2011, the day the US was downgraded, an observation that first was made right here on Zero Hedge. Which begs the question: what really happened in the stock market on August 5, 2011 when the US was downgraded to AA+, when everything literally broke, who is intervening constantly in the stock market, and why are they doing so via various HFT intermediary mechanisms?

Note the insanity that begins on August 5, 2011:

Chart: Nanex

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 02/06/2012 - 16:51 | 2131759 5880
5880's picture

Everyone was jealous of the specialists and market makers


they mandated .01 markets instead of fractions

that tightened the spreads and killed the MM and specialists

so now the machines (HFT) provide the liquidity

all that equals really tight markets until they shut down the machines (flash crash)


Mon, 02/06/2012 - 16:51 | 2131760 Fubared
Fubared's picture

Looks like an Aurora Borealis after a massive sunstorm and the resulting solar particles hitting the Earth's magnetic filelds. Looks beautiful but I wonder what it means.



Mon, 02/06/2012 - 16:56 | 2131784 LouisDega
LouisDega's picture

I never realised how grand my Macbookpro display was until looking at that chart. I rate it a 10 wow factor.

Mon, 02/06/2012 - 18:18 | 2132110 TheFourthStooge-ing
TheFourthStooge-ing's picture

Fubared noted:

Looks like an Aurora Borealis after a massive sunstorm and the resulting solar particles hitting the Earth's magnetic filelds. Looks beautiful but I wonder what it means.

It's a coronal shit ejection, Bubbles. Those flashing colors are the Aurora Shit-on-all-us.



Mon, 02/06/2012 - 16:52 | 2131766 Zeff
Zeff's picture

Fuckin' Hell! Ben Cosmo shit.

Mon, 02/06/2012 - 16:53 | 2131771 kumquatsunite
kumquatsunite's picture

Ah yes: 

By November...Gold 750.00

Stock Market 5735


Just Saying, called the top of the housing market. Now we are in the trough of devaluation...will be here two years, then even out. In five years, we will be purged and bottom and start to build out again. That will be out strength. Good luck, Americans. Stay strong and remember what you've forgotten. We are the greatest country on the planet because we are a moral and ethical people. When we do this: when we work; when we pay our own way; when we are honest, we thrive. We have been living in the wh@rehouse and partying with the pimp. Time to go home, sleep it off, and start over.

Mon, 02/06/2012 - 16:55 | 2131783 navy62802
navy62802's picture

Don't forget unemployment. At the pace we're going, it will be around 5% by November.

Mon, 02/06/2012 - 16:54 | 2131777 kevinearick
kevinearick's picture

the record of Aug 2011 is clear...back to the future...

Smoke & Mirror Capitalization:   Herding Cats, Donkeys, & Elephants

So, the venture capitalist trots out Facebook, booked as a tech IPO, with the usual cast of characters, pensions, unions, blah blah blah, leading the parade, and the so registered voters of San Francisco give themselves a $1/4B pat on the back, all upon the theory that negative relative interest rate loans, government supply side economies, pay for themselves, while State and Global tax bases roll over, California runs out of cash, private corporations replace full-time with part-time, boomers retire, and Fearless Leader pronounces that the pump must prime, OR ELSE, the Fed will adopt explicit negative interest rates and Israel will bomb Iran.  O-o-o-o-scary.

Poor critters, they just can’t help themselves. The crow just cannot resist a shiny object. You sit out on the porch with your gun, day after day, watching the same critter dig and re-dig the same hole, warding off other critters in the process, until you get tired of watching the same critter…then the process starts all over again. 

On the empire side of the looking glass, you are a mouse and the denizens are cats, right up until the relay is removed by backlash. If outsiders have to pay 30% to start up a business, which is guaranteed to fail or be taken…Martha Stewart, Zuckerberg, Soros, six of one, half a dozen of the other, it’s all make-work. By all means, stop traffic in San Francisco to lay down the yellow brick road.

Absolute zero only exists under one condition. In all other cases, zero is relative to its space time event horizon. Sailing isn’t about pushing a boat with wind, or an outboard motor; it’s about trimming the sail to get lift, orbiting and propelling the boat relative to density, against the wind. You employ the wind, a derivative of gravity, to escape its iron grip, moving in another dimension.

Separation of charge is no different. If you think about it, moving the bow out of irons is much easier than moving the stern, and the stern is sure to follow, though it may appear to be moving from leeward force, because that is where the measuring device is mounted. The eye of the storm is relative net 0. Only the fulcrum of fulcrums maintains 0.

The kid doesn’t make the match by GPS. He makes it by building the magnetic field, with quantumly increasing momentum along an implicit integral path, where the match is not, by not changing his focal point, despite/with all manner of misdirection, at an angle of incidence unique to the individual. How do you provide a custom computer for each individual at greater profit than mass production?

Reverse engineering and best business practice, scale, is not the answer. Shorting similar devices on different rungs to a single device, for the purpose of control, is pretty damn stupid, but that is exactly what an empire is designed to do, expertly. Within the empire, participants stand in a queue of queues – food stamps, pensions, IPOs, whatever, each in a “team” competing within and without, expecting more of the same, watching the motor at the stern, which measures the political wind.

Swan events appear random to the Faithful, but they are no accident of God. Walk into the casino, clean it out, and leave, never to return. Jesus seemingly appeared from nowhere, turned the tables, and left, leaving the empire with its mythology. Your new branches will thrive to the extent they are symbiotic with others. The trunk, education, does not depend upon a branch, energy or otherwise.

There is no lack of gravity; that is the Unknown Promise. Individual faith is a function of intelligent recognition. Measuring effort to other ends is economic activity make-work. The chicken and the egg is only a conundrum on the legacy side. There is always a new economy under construction and it is always growing faster than the old one. Relay replacement depends upon the troubleshooter.

Notice how Kudlow gets confident with green shoots, calling the kettle black, seeking the end of unemployment benefits each time? Sin is not evil; it’s just stupid, willfully ignorant. Why do you suppose Public Education hates that word? Equations are derivatives of language. Who is the authority operating your mind? What compiler have you willingly adopted? Shop around. Don’t expect to pay the same or less than your neighbor, though it may happen. You get what you pay for and the price depends upon the individual.

On a stage built for the occasion…earth is an incubator; at some point, the bird must fly, or die trying…Don’t disable your children and expect a happy outcome when it comes time to retire the old. When you walk into town, does the old fit with the new, and if not, by how much? How long does it take authority to show up? That will tell you everything you need to know. Authority creates its own demand, with supply. Why would anyone expect anything other than a black hole?

In the 70s, the energy trusts took control of education from local parents, from ask not what your country can do for you, but what you can do for your country, with a focus on space exploration and alternative energy, to entertaining one manufactured bogeyman after another, and exponential consumption of oil. When diversity fails, the universe orders the planet to reshuffle the deck, with climate volatility. If you don’t want to police yourself, the empire will be more than happy to do it for you, until you are bankrupt.

If you think Education is for pu**ies, go out on the streets as a non-person and see how long you last. Look around. Who, besides intelligent parents, is effectively standing against the tyranny engulfing the planet? Do you really think God cannot tell the difference? Obama is the most powerful man on the planet, right? Let’s see him walk the streets as a non-person, absent the Emperors Robe. If you really think we cannot make another, by all means, proceed to bet on gluttony, masked as socialism.

So, we change the definition of local…moving the root to a new dimension….

Mon, 02/06/2012 - 16:59 | 2131803 bullmarket
bullmarket's picture

reminds me of the chart??

Mon, 02/06/2012 - 17:31 | 2131938 Zymurguy
Zymurguy's picture

Smoke 'em if ya' got 'em dude!

Mon, 02/06/2012 - 18:10 | 2132090 Dapper Dan
Dapper Dan's picture


I have read what you have written and the myriad of connotations is insurmountable albeit no unknown edifice is to be renowned.

The theoretical difficulties arise from the fact that all of the methods except your method rely on the theoretical basis of the HFT effect and the quantum BS effect. If these theories are slightly inaccurate – though there is no evidence at present to suggest they are – the methods would not give accurate values for the precision constant.

More importantly, the values of the precision constant obtained in this way cannot be used as tests of the theories without falling into a circular argument. Fortunately, there are other statistical ways of testing the theories, and the theories have yet to be tested.


Mon, 02/06/2012 - 22:47 | 2132730 Imminent Crucible
Imminent Crucible's picture

Two notes:

"the Fed will adopt explicit negative interest rates"

Treasury Borrowing Advisory Committee (Primary Dealers) has already told the Fed ZIRP is not enough, nominal rates must go negative.

"Sin is not evil; it’s just stupid, willfully ignorant."

No. It is wicked to be stupid/ignorant. Stupid is a choice, and you know it.

The rest is self-indulgent hashish ravings. Come back when you're sober.


Mon, 02/06/2012 - 16:56 | 2131788 Contura
Contura's picture

Awesome, got goosebumps.

Mon, 02/06/2012 - 16:56 | 2131789 blu
blu's picture

It's called a packet storm.

Someone was ready to go. And they jumped.

Mon, 02/06/2012 - 17:10 | 2131797 AC_Doctor
AC_Doctor's picture

Wait until the MOMO machines are programmed to sell, sell, sell.  For fukk's sake, it is going to be a bloodbath of never seen proportions.

Mon, 02/06/2012 - 17:12 | 2131855 blu
blu's picture

A better guess is that day will never come. They probably have agreements and covenants wall-to-wall never to sell, certainly not in a way to create a panic, and absolutely never during a panic. The HFT mecha will clam up tighter than a drum. If anything, they'll micro-buy the micro-dips and churn the fuck out of the micro-tops to flatten the spread to a hair's width.

I wrote a fictional account once of a market traded so fast and violently that nobody could tell anything was happening, except by looking at the volume, which was astronomical in a matter of seconds. In the story the market was held absolutely flat by the algos (and this one girl) working hard to kill each other and just not being quite able to do it.

I wasn't even guessing when I wrote it. It's probably not even actual fiction anymore. Well except for the girl. The girl I made up.

Mon, 02/06/2012 - 19:10 | 2132240 seek
seek's picture

I agree, they won't let it go down.

I'm convinced the last day ever the NYSE is open (at least trading in current FRN USDs) it will close green. There will be tires burning outside the building and random gunshots heard in the distance, but it'll be green.

Mon, 02/06/2012 - 19:42 | 2132331 blu
blu's picture

A nice visual.

And nobody will be inside the lobby taking a cell call nor standing on the sidewalk having a smoke after a long trading day. And the doors will be chained shut already.

It will have been the same stupid algos trading the same useless block of 120 AMZN shares back and forth, until someone scavenging copper pulled the ethernet cables from the patch panels and walked away, knocking over the humming backup power supply as they pass.

Packet loss: 100%

Packet loss: 100%

packet loss: 1##@v*33jkc


Damned sad way to end the world, ain't it?

Mon, 02/06/2012 - 16:59 | 2131798 TooBearish
TooBearish's picture

Gawd what a bunch of Luddites- this shows the awesome progess of our productivity and computing abilities that will exponentially improve GDP...embrace the future rather than call for the reinstatement of the buggie whips!!!

Mon, 02/06/2012 - 18:24 | 2132123 TheFourthStooge-ing
TheFourthStooge-ing's picture

Buggy whips are so yesterday. Everyone knows that the future belongs to the Hangman's Noose.


Mon, 02/06/2012 - 16:58 | 2131799 Irish66
Irish66's picture

May of 2010 looks like the start of change to me

Mon, 02/06/2012 - 22:53 | 2132748 lasvegaspersona
lasvegaspersona's picture

I was lookng for 5/6/10 but it skipped over that date...and several others especially as timeline approached the current time..

Mon, 02/06/2012 - 17:00 | 2131806 JLee2027
JLee2027's picture


The patient is terminal.

Mon, 02/06/2012 - 17:00 | 2131808 q99x2
q99x2's picture

Fire up your old SETI screens. Looks like they've found something.

Mon, 02/06/2012 - 17:23 | 2131906 NotApplicable
NotApplicable's picture

Sorry, but they're looking for intelligent life.

Mon, 02/06/2012 - 19:48 | 2132350 Sanksion
Sanksion's picture

yeah, my SETI@home seems like shit now... I want this chart as a screensaver please :)

Mon, 02/06/2012 - 17:04 | 2131823 MrBoompi
MrBoompi's picture

So does this mean my money is finally safe?

Mon, 02/06/2012 - 17:05 | 2131827 Zola
Zola's picture

I think the analogy of fire is most appropriate. If you look at periods when there was a bear downward move, you clearly see the flames "rising" and then miraculously the fire gets "brought back under control" . THen the flames linger until the next burst of agitation. It is litterally an illustration of the market being ON FIRE. Also you see that each time the Fed quells the instability , the next burst is even stronger !

Mon, 02/06/2012 - 17:06 | 2131833 JoBob
JoBob's picture

Scary. It reminds me of the scene in Close Encounters of the Third Kind when the computers took over the initial conversation between the alien ship and the humans waiting for them. The speed picked up drastically as communication was established and the humans had no idea what was being communicated.

We are not in Kansas any more!



Mon, 02/06/2012 - 17:06 | 2131834 Roland99
Roland99's picture

The markets went from waltz to Death Metal!

Mon, 02/06/2012 - 17:06 | 2131836 rlouis
rlouis's picture

Holy s**t - that looks like a market on CRANK!

Mon, 02/06/2012 - 17:08 | 2131844 q99x2
q99x2's picture

'why are they doing so via various HFT intermediary mechanisms?'


Because there's been a run on the stock market and bankers are moving our money into foreign real estate, gold and agriculture. Something has to keep the market going while all the bankster money is moved. That be the HFT.

Mon, 02/06/2012 - 17:11 | 2131853 Irish66
Irish66's picture

that is one hell of a statement

Tue, 02/07/2012 - 01:45 | 2133038 Cathartes Aura
Cathartes Aura's picture

indeed.  the truth of it stops your mind for a second, hmm.

Mon, 02/06/2012 - 17:08 | 2131845 Blotsky
Blotsky's picture

Going long on LSD

Mon, 02/06/2012 - 17:14 | 2131869 rsnoble
rsnoble's picture

These fuckers need a good solar flare is what they need.  I could literally see Wall Street get nuked yet your flashing screens would still keep running as if nothing ever happened.  Looks like a military operation to me.

Mon, 02/06/2012 - 17:17 | 2131879 blunderdog
blunderdog's picture

Oh, now I see the problem--the VGA cable must be damaged, the display is losing green-sync.  Replacing that cable oughta fix it.

Mon, 02/06/2012 - 17:50 | 2132014 rsnoble
rsnoble's picture

Next will be computer screens that are outlawed to have the color red on anything. Everyday will be green.

Mon, 02/06/2012 - 17:18 | 2131885 rsnoble
rsnoble's picture

BTW trying to explain this to the mass is impossible. You run into two groups. 1: You're full of shit and don't know what you're talking about or 2: I don't want to talk about it.

Mon, 02/06/2012 - 21:32 | 2132567 dcb
dcb's picture

sorry, whioe I knoow you get huge thumbs up for those comments, I am not the masses, and there has got to be some infor on what it shows just as a matter of writing style. Not it can take a long time for the masses to get something, but how about a label of the x and y axis for a start. that is basic writing info and as someone who has written for scientific journals is required. almost every grahic in a journal has a little note, summary, and what the graph shows with some conclusion. then thre is a discussion ofn the meaning of the data. ZH does a very poor job with visual data and should do some journal reading for the basics. While I am not saying each article should be a primer course, there could be links to prior articles on the subject for those who want to learn. this topic and these graphs are complex, and the basic minimal standards should be applied to something like this.

Mon, 02/06/2012 - 21:37 | 2132575 dcb
dcb's picture

I digress, the conclusion isn't on the graph, but at least in the discussion.

example: this vido show from x date the number of shares traded in x millions on the y intercept (vertical line) with the horizontal line being the time of day. you can see the amount of shares traded has increased x percent from this date to this date. aare the shares traded only hft shares, algo shares, or total shares traded. ???

Tue, 02/07/2012 - 00:20 | 2132920 soccerballtux
soccerballtux's picture

that's because ZH is about drumming up traffic and pageviews. As you can tell from the comments most of us are conspiracy theorists. I have seen posts with perfectly clear, plausible explanations, spun as doomsday, with the readership crying the sky is falling. I read all 200 posts and did not find one that pointed out what I then pointed out-- that the explanation was (xyz [I can't remember]) and a general rant about how sucky ZH was at actually providing meaningful data. I came back the next day and had just a few upvotes/posts from people going "why is this a big deal" while everyone else ran around like chicken little. Oh well.

So take all of it with a grain of salt. Occasionally they stumble on a gem, and that's why they are still in my list of pages that I visit daily. Besides, the commentary is top notch for the lulz factor!

Tue, 02/07/2012 - 01:49 | 2133041 Cathartes Aura
Cathartes Aura's picture

"As you can tell from the comments most of us are conspiracy theorists."

ohhh, not me mate, I'm a reality recogniser!


Mon, 02/06/2012 - 21:55 | 2132613 Yes_Questions
Yes_Questions's picture



And eventually, the two groups will merge and be the ones telling the tell:


Mon, 02/06/2012 - 17:23 | 2131905 blu
blu's picture

If you thought that all the added packets since AA+ where money, think again. Most are just bogus trades intended to break other trades, distort statistics, break models and befuddle pundits. It creates a fog of noise that defies comprehension. There is 1 (one) actual US dollar being traded back+forth a billion times a day now. Everything else is just a mind-shattering noise intended to disable intelligent analysis.

No human can work in the market. No carbon-based mind can comprehend even the genesis of a strategy. But your money is welcome to come and disappear. Oh yes. Your money is the food of this digital Moloch.

Mon, 02/06/2012 - 17:28 | 2131926 Irish66
Irish66's picture

For this article to get 7,000 reads in 20 minutes, I believe there is a whole lot of people trying to

figure out why everything and anything is priced in and doesn't move the market  the way it should.

Mon, 02/06/2012 - 18:00 | 2132040 blu
blu's picture

Ha! Wrong again.

Of those 7,000 reads probably 5,000 are meme-harvesting bots who haunt ZH. They zoom in on certain topics, mostly anything about themselves. Their masters are slightly to very slightly concerned that someone will put 2+2 together someday, in particular someone who might be in a position to totally fuck them up.

Though that someone is not myself. Heavens no. I have much more important fish to fry. But just so they know I'm watching here's some homework for them to crack between time slices:




And I mean every word of it -- fuckers.

My Love As Always, the Archangel Fortran

Mon, 02/06/2012 - 18:32 | 2132148 TheFourthStooge-ing
TheFourthStooge-ing's picture




Mon, 02/06/2012 - 23:00 | 2132769 lasvegaspersona
lasvegaspersona's picture


I may not agree with what you say (I may not even understand it) but I defend your right to say it...unless it is really filthy in which case I'll need to see the pictures.

Mon, 02/06/2012 - 17:29 | 2131923 sgt_doom
sgt_doom's picture

This outstanding gif should be viewed while listening to the Ballad of Sergey Aleynikov.

Hmmmm....makes one recall all that wash trading back and forth, along with other corporate shorting, between Goldman Sachs and Morgan Stanley on ICE Futures, and ICE Clear.

And all that speculating upwards on the forward freight futures desk to drive up the transportation costs of oil aboard those super tankers and bulk carriers.

And what was that about the Goldman Sachs Commodity Index (GSCI) back in 2006?

Oh kinda does look all kinds of rigged!

Hmmmm....might lead one to believe

And what's weird in these pictures (for those who like riddles involving JPMorgan and the Fed)?

Mon, 02/06/2012 - 17:29 | 2131929 GaryNeville
GaryNeville's picture

Do these HFT bots hold the stock or just buy and move in the next second?

If they hold - when do they offload?

How bloated can they get?

Mon, 02/06/2012 - 17:34 | 2131952 nope-1004
nope-1004's picture

It has been shown that they will buy and sell within a nanosecond.  No holding going on, just gaming.



Mon, 02/06/2012 - 17:33 | 2131946 dtwn
dtwn's picture

Interesting how earlier (2008) the activity spikes are very narrowly compressed at the close (16:00) with some broader spikes at the open.  Later  in late 2009 the activity spikes are more at the open, and then after that it's just all over the place, but still seems concentrated at the open but still with some increases at the close.

Mon, 02/06/2012 - 17:36 | 2131956 juicyfruit
juicyfruit's picture

Sure is one hell of alot of people reading this piece...great job!!!!

when is the riot cam coming back on? lol

Mon, 02/06/2012 - 18:03 | 2131960 ebworthen
ebworthen's picture

A computerized game of "keep the balloons up!".

Mon, 02/06/2012 - 17:37 | 2131961 rosiescenario
rosiescenario's picture

Watching the progression gives a good sense of just how far the HFT programs have taken dominance of the marketplace.


If our government was not fully managed by special interest groups this would not be permitted since it serves absolutely no public purpose.

Mon, 02/06/2012 - 17:37 | 2131965 luna_man
luna_man's picture



It's good to know, someone, in the know!!...

Surrounds, himself with people in the know!...

Oh yeah, baby!...None other than...


Mon, 02/06/2012 - 17:41 | 2131977 DavidC
DavidC's picture

Tyler (and Nanex),
This is amazing, and ranks alongside one of my other all-time ZH classics.

Perhaps the sound track could be overlaid onto this one...


Mon, 02/06/2012 - 17:45 | 2131996 HD
HD's picture

So, the question becomes - can they actually prevent a market decline or an outright crash?

With no volume - can they just hold it up at will for years if need be?

Mon, 02/06/2012 - 17:47 | 2131999 gravedestruction
gravedestruction's picture

THAT is one hell of a gif.

Mon, 02/06/2012 - 19:12 | 2132246 Goldilocks
Goldilocks's picture

Things That Make You Go Hmmmm.... (5:08)

Mon, 02/06/2012 - 17:54 | 2132026 Reese Bobby
Reese Bobby's picture

This story is an insult to the day traders here at ZH who will soon be serving drinks in dive Florida bars.  Have a heart!

Mon, 02/06/2012 - 19:22 | 2132281 ChrisFromMorningside
ChrisFromMorningside's picture

It'll be like Tom Cruise's "Cocktail" but with more foreclosures and uglier women.

Mon, 02/06/2012 - 17:57 | 2132044 mayhem_korner
mayhem_korner's picture



Looks like the scene from Contact.

Mon, 02/06/2012 - 18:02 | 2132059 blu
blu's picture

An apt observation.

Mon, 02/06/2012 - 18:04 | 2132060 HD
HD's picture

Contact is one of my favorites books - the movie is well done, but the book gives you a real insight into the likely social, economic and political outcomes of such a discovery. Worth the read. The end of the book offers up an interesting question involving prime numbers that the movie doesn't get to.

Tue, 02/07/2012 - 00:53 | 2132978 Vendetta
Vendetta's picture

Indeed.  However they built the first machine from the plans.

Mon, 02/06/2012 - 17:58 | 2132049 gravedestruction
gravedestruction's picture

Bob Brinker had a buy signal back in September 2011 and the S&P went up 22% since.

Every time I have seen a buy signal go out from his propriety market-model over the years has always been spot-on.

Mon, 02/06/2012 - 18:03 | 2132064 godzila
godzila's picture

Very impressive but I have no idea what I am looking at (execept for the increasing volume)

Mon, 02/06/2012 - 18:05 | 2132069 SmoothCoolSmoke
SmoothCoolSmoke's picture

I love to stuff that in Larry Kudlow's "Free Market Capitalism" pipe and light it for him.

Mon, 02/06/2012 - 18:10 | 2132085 Reese Bobby
Reese Bobby's picture

It's about time somebody came up with a new photo of Larry snorting coke off of Larry Summers' ample breasts.  No?

Mon, 02/06/2012 - 18:12 | 2132097 HD
HD's picture

With a rolled up "king dollar"?

Mon, 02/06/2012 - 20:13 | 2132351 Money 4 Nothing
Money 4 Nothing's picture

With a C note preferably, Cue the Hookers!! Now that's a good time Boyz 'n Gals.

Mon, 02/06/2012 - 18:32 | 2132130 cranky-old-geezer
cranky-old-geezer's picture



Zero Hedge has not been focusing much on the topic of our broken equity markets recently because if by now, following over three years of coverage, someone is not aware just how fragmented, manipulated and largely broken the market truly is, they never will.

MDB apparently isn't.

But then he hasn't been here long, so we'll cut him some slack.

And he's a MO-ron too, so we'll cut him some more slack :)

Mon, 02/06/2012 - 18:34 | 2132154 deebee
deebee's picture

Great use of animated gif, looks fun.
What's exciting is anyone can join in the HFT fun now with the open source 'algo-trader' project. America is clearly heading towards prosperity...

Mon, 02/06/2012 - 18:48 | 2132196 Salah
Salah's picture

Set this to music; I would suggest "the Battle" from the movie, Gladiator, by Hans Zimmer

Mon, 02/06/2012 - 18:54 | 2132206 divedivedive
divedivedive's picture

I'm no forensic anaylst but as best I can tell the volatility shown in that gif seems to start between 7/28 and 8/3. You can see this by taking a 'copy' of the gif when it gets near that date range. (I obviously have too much spare time). Also I would think that the volatility would be less (maybe closer to flat) on a weekend but that doesn't seem the case.

The increase is interesting though. Did they maybe turn on a new DMM in that timeframe ? Might it in some way be related to the 'Rule 80C' changes which went into affect in that timeframe ? Just fishing....


Mon, 02/06/2012 - 18:56 | 2132213 Scalaris
Scalaris's picture

I don't know what that is, but it makes me want to get high.

Mon, 02/06/2012 - 19:22 | 2132259 Lost Wages
Lost Wages's picture

For Mac owners, if you open the gif in Preview, you can see it frame-by-frame, all 1283 frames.

Mon, 02/06/2012 - 19:49 | 2132347 quacker
quacker's picture

As a Jew who converted to Christianity many years back, I have an inside track on the psychology of why all this is happening.

Deep down what the Jew fears most is getting tossed out of a country and blamed for things. Thus the Jew money elites will do anything to keep a Truman show going.

They're incapable of having a lousy stinking number go down for a while and just saying "Maybe people are over extended .. no harm if they save for a while to balance things out."

No, the Jew is incapable of saying this. They're desperate that it must always be up up up .. or they'll get blamed for the downturn. And since they have all trust in their big brains, and the non-Jews are just little goy children to them to be manipulated, they institute these too-clever-by-half games, one after another after another to keep the Economic Truman Show alive .. because they're scared shit over what will happen if it all comes crashing down.

Of course all they really end up doing is digging yet deeper pits for themselves and us. Their trust in their brains is misplaced. Which gets to the heart of the spiritual sickness that defines them as a people.

But anyway, until the world finally faces up to the one of the hardest and most inconvenient truths of all .. and that is that until Jews are finally kicked out of all finance/banking/central banking and never let back in .. EVER .. we will just keep crashing again and again and again.


Mon, 02/06/2012 - 23:13 | 2132794 lasvegaspersona
lasvegaspersona's picture

So all 'jews' have big brains? These comments are not helpful and make this site seem less respectable than it is. I am not Jewish but do not think these generalizations are true or helpful. Not all jews are bankers and not all bankers are jews. Do you feel better about your conversion now. Do you need to spread some hate...and fear?

Mon, 02/06/2012 - 19:59 | 2132355 Bunga Bunga
Bunga Bunga's picture

Better get far away before that nuke explodes.

... and it looks like Lehman was a "tiny, tiny blip".

Mon, 02/06/2012 - 20:02 | 2132382 Global Hunter
Global Hunter's picture


Mon, 02/06/2012 - 20:17 | 2132416 Shizzmoney
Shizzmoney's picture

Oh yeah, we aren't in a recession.  That totally looks normal.

Mon, 02/06/2012 - 20:22 | 2132428 Sanksion
Sanksion's picture

All of this is price fixing under a cloack of market by the mean of a script too fast for you. 

The Greatest Video Game on Earth. 


Mon, 02/06/2012 - 20:26 | 2132436 longdong silver
longdong silver's picture

this is all just bullish for silver.

Mon, 02/06/2012 - 20:34 | 2132448 FranSix
Mon, 02/06/2012 - 21:09 | 2132523 Use of Weapons
Use of Weapons's picture


Wrote a long piece on how to trash these: I'll save it for darknet.

Mon, 02/06/2012 - 21:13 | 2132534 ekm
ekm's picture

Check with trading desks of bailed out banks = GOVERNMENT OWNED BANKS UNDER PRIVATE MANAGEMENT = BAC, JPM, C, MS, GS.

Mon, 02/06/2012 - 21:18 | 2132545 financial apoca...
financial apocalyptic contagion's picture

holy shit that would be so awesome on LSD

Mon, 02/06/2012 - 21:46 | 2132596 non_anon
non_anon's picture

ah, I miss the good 'ol days!

Mon, 02/06/2012 - 22:18 | 2132657 Yes_Questions
Yes_Questions's picture



I must have remnant cause this stuff gives me flashbacks (or Free Rides for those of us with some grey), despite knowing little of the mechanics trading.


Mon, 02/06/2012 - 23:19 | 2132810 non_anon
non_anon's picture

blue microdot

Tue, 02/07/2012 - 00:53 | 2132977 TheFourthStooge-ing
TheFourthStooge-ing's picture sunshine.....


Mon, 02/06/2012 - 21:37 | 2132573 non_anon
non_anon's picture

munday eve, WT is a friend of mine!

Mon, 02/06/2012 - 21:40 | 2132581 dcb
dcb's picture

the most ducked up thing is uudc, each day opens on a lower low, doesn't hit a higher high, and it isn't a sell signal, in fact each is a buy. that is much more indicative of how hft trading has dominated the market since the vast majority of shares aren't held overnight, there is no selling until a set point when the boys want the market do go down.

tyler has made a point of valuation. these things have completely changed the way markets are intended to function and that's the real story. How have hft changed market structure, and what effect has this had.

Mon, 02/06/2012 - 21:42 | 2132585 dcb
dcb's picture

over four days uup has opened at the high of the day. that's fucked up.

Mon, 02/06/2012 - 21:46 | 2132597 dcb
dcb's picture

so if you did this right and bought uup at the break of the lower low, you are still in the red as a buy ad hold person, vs and algo person. plus most things don't fall more than 5 days, so you will be in the red even more, then have to look to the weekly high. this is so fucked up a system. each day us markets buy so the europeans sell their euros at a profit. it's as if americans are just giving them money this way.

but hye who cares about a loss when you can borrow for nothing for ever from the fed and force the market to do what you want because of that unlimited  capitial.

Mon, 02/06/2012 - 21:42 | 2132584 q99x2
q99x2's picture

The cause must be a virus. It is apparently also infecting CNBC and now referring their viewers back to ZeroHedge - Greek Debt Talks Enter Bizarre Phase.

Tue, 02/07/2012 - 09:49 | 2133515 Element
Element's picture

What else they gonna do though. They have to appeal to something or someone with brains, as it's clear they have none.

Remember Oct and Nov 2008, when all the econ-fin 'experts' one after another said they never saw it coming, and don't know what the fuck is happening, or where/how this will end?   Remember when people like <insert doomer name here> could get air-time almost anywhere, for months on end?  The sheep are going to develop another case of financial vertigo and need to be fed a higher grade of info ... until they can be distracted and bored, thus put back to sleep.

It's just coming around again ... better get the bronzer on Tyler ...

Mon, 02/06/2012 - 22:05 | 2132631 Yes_Questions
Yes_Questions's picture



Ah, but its half-time in America now, as per Dirty Harry, and so things can only go well from here..

Mon, 02/06/2012 - 22:41 | 2132675 BlackholeDivestment
Tue, 02/07/2012 - 00:57 | 2132983 TheFourthStooge-ing
TheFourthStooge-ing's picture

"Nice girls don't wear cha-cha heels!"


Mon, 02/06/2012 - 22:16 | 2132635 Henry Chinaski
Henry Chinaski's picture

who is intervening constantly in the stock market, and why are they doing so via various HFT intermediary mechanisms?

because it amuses them. Think of the movie Trading Places. Wiinthorp is GWB and BHO as Billy Ray Valentine...

Mon, 02/06/2012 - 22:18 | 2132655 chump666
chump666's picture

That is the best f*cking thing I have seen in a long time.  In fact, it's one of the best charts I have seen in a long time.  Every trader in the world should watch that every single day.

So good. Mesmerising.  Yep, we trade off the HFT momo low volume marked up insanity.  That is it.  I remember when open out cry died and HFTs started to rise.  Nerds tracked momentum (human) trading, in a bizarre low volume twist.

Right now we have a momo wannabe market, mostly bidded up by HFTs running marked up trades to each other and the dumb/smart buying longs.  If Greece and Europe blows out next 48hrs, we might just see another nasty crash...might.

Other chart I like is the VIX going back to 1987 crash, 2008 it starts to rise, in 1987 it flatlined then spiked surpassing the Lehman event.  We currently have a flatlined VIX

From Barclays Capital client note last 30mins:

"markets interpret the ECB's rejection of sharing the burden of the PSI deal as a signal that the ECB is a senior creditor in sovereign bond markets, adding upward pressure on Italian yields." He adds "the market has not taken this seriously but it does concern us."

Mon, 02/06/2012 - 22:21 | 2132665 gsferg
gsferg's picture

Hm.. if the markets made noise, what would it sound like? Maybe what my truck sounded like just before it threw a rod?

Mon, 02/06/2012 - 22:25 | 2132680 brokenclock
brokenclock's picture

I just don't get it. There is so much proof at this point of market manipulation by HFT. When the Fuck is something going to be done about it. 

Mon, 02/06/2012 - 22:44 | 2132724 disabledvet
disabledvet's picture

save the article for a distrubution day. if volume stays anemic then you'll have a far better point. i've gotten excited with this spectacular run...which is usually a good contrary indicator. some areas of the US economy are exploding...obviously housing values in Northern California come to mind. Awesome much as i don't like Minority Leader Pelosi--but hey, that's there choice...and there is much in a quirky way i love about those people (they like people who make their own soap. Isn't that interesting!) then...hey, they can choose Joseph Stalin for all i care. (the Russians cried when Stalin died btw!)

Mon, 02/06/2012 - 22:49 | 2132738 chindit13
chindit13's picture

Pre-HFT order flow is John Cage's 4'33", post-HFT is Louis Moreau Gottschalk's Banjo, with the last section matching perfectly with a post 8-5-11 flow.

Mon, 02/06/2012 - 23:06 | 2132781 SaveTheGreenback
SaveTheGreenback's picture

As the animated gif show us, Skynet is becoming self-aware.

Mon, 02/06/2012 - 23:15 | 2132799 Yes_Questions
Yes_Questions's picture



I think this graph explains the inspiration for the characters in Shameless. 

And/or, we see here how artificial support of the markets occurs and that the only question is why.  My intuition tells me the motivation for something like this might, just might, have something to do with mitigating the number of torch and pitchfork wielding boomers entering retirement who, in need of FRNs to themselves mitigate pet food isle shopping, might actually cause some real problems for the elected class.


But its been a long year today, so what do I know.

Mon, 02/06/2012 - 23:20 | 2132812 infolode
infolode's picture

Chinese New Year/Rebalance of Earth's electromagnetic flux

Tue, 02/07/2012 - 00:42 | 2132844 Bear
Bear's picture

Looks like Revel's Bolero ... building to a climax. 

Tue, 02/07/2012 - 00:06 | 2132893 IrritableBowels
IrritableBowels's picture

Just thought I'd report Cramer: "...stocks move because PEOPLE move them!" Literally 5 minutes ago and with crazed enunciation on the captilized...


Tue, 02/07/2012 - 00:33 | 2132947 andyupnorth
andyupnorth's picture

Signal-to-noise ratio is too high; the message is lost.

Tue, 02/07/2012 - 00:54 | 2132979 Olympia
Olympia's picture

Global Debt Crisis

The greatest private fraud of human history.
Who are the great fraudsters who are becoming the murderers of the human kind? How does the economy "illness" threaten Democracy and the freedom of people?
By knowing what happened in indebted Greece, where loan sharks created “bubbles” and the current inhuman debt, one can understand the inhuman plan in total ...understand where this plan started just to bring all states at the same end ...understand how this type of plans are established...


Tue, 02/07/2012 - 01:05 | 2132992 supermaxedout
supermaxedout's picture

That the HFT machines are manipulating the equity markets is an old hat.

The HFT is the reason why the EU wants to introduce the so called Tobin tax on all financial transactions ( something like 0.05 % rate). This is on the way already within the EU territory and this is the mayor reason why the City of London has instructed Cameron to bluff the rest of the EU with the threat that the UK might leave the EU.

One of the consequences of the HFT fraud in my opinion is, that the share prices of world class blue chip equities like cat, siemens, basf, IBM, Nestle, Philipp Morris etc  do not rise in value as one could expect (compared for example with treasuries).   These blue chip companies are regarded by the investors as companies with  high "real" intrinsic values.  Since the run into the real values (flucht in die Sachwerte) (like gold, silver, agricultural land, first class real estate, etc)  has already started a while ago it would be very normal to see the blue chips rise too dramatically . But this is stopped by the manipulative use of HFT machines and occasional but very intensive shortselling activities in my opinion.

Tue, 02/07/2012 - 07:05 | 2133328 DrunkenMonkey
DrunkenMonkey's picture

2011 is just, well, insane.

Tue, 02/07/2012 - 09:34 | 2133492 Element
Element's picture

Can we go to psychotic in 2012?

"...Yes We Can! ..."

Wed, 02/08/2012 - 14:42 | 2138685 timothyi
timothyi's picture

Is there any way to upload a picture?  I managed to stop the video on the May 6th flash crash.  It happens at 2:56 on the youtube video but it's tricky to get it to stop on exactly the right day.

Starting at 2:00 it looks like the EEG of someone suffering a seizure.

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