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SkyNet Wars: Presenting The Rogue Algo Responsible For FaceBook's Downfall

Tyler Durden's picture





 

Back on March 27, following the epic disappointment that was the BATS IPO, we presented a detailed forensic analysis courtesy of Nanex, which demonstrated step by step how a Nasdaq-borne algo may have been the culprit shattering BATS' hopes of ever going public. Fast forward two months later to the most anticipated IPO in recent history, in which FaceBook's even more epic, if not quite as stark, implosion has set back the general public's faith in capital markets decades back. The irony, of course, is that FB didn't do anything that many weren't warning about: it simply plunged which would make perfect sense in a normal world. This in turn was the spark that provoked the public ire - had FB simply doubled since IPO day, nobody would care about what really happened on May 18. Alas, it didn't. And now the lawsuits come. The problem is we don't transact in a normal world, but one dominated by central banks and algorithms - which is why the most pressing question for those who grasp the real new normal is how come in a market as controlled and manipulated as the central bank-dominated venue we have now, was FB stock allowed to plunge? For what may be the actual definitive answer, as opposed to now trite philosophical ruminations on valuation, ethics, underwriter and shareholder greed, we once again go to Nanex, which has caught the perpetrator red handed once again.

Somehow we doubt many will be surprised to learn that the reason FB failed to take off following its break of trading in the low $40s, has everything to do with, you guessed it, another HFT algo, which in those first instants of trading, did something that threw the entire market off: it kept crossing the market, with the Bid surging above the Offer, in the process shocking the entire price-supporting HFT array, designed to build upon upward momentum, resulting in the only other natural outcome: a steep, rapid selloff.

As Nanex' Eric Hunsader tells us: "Turns out just before Nasdaq's quote crossed and became non-firm, one copy of the same quote (crossed) was marked regular, and I think that caused other algos to react and immediately sell off the stock. When that crossed quote from nasdaq appears, bid prices from other exchanges suddenly evaporate and that causes the NBBO spread to explode from 1 cent to 70+cents in 1/10th of a second! Nasdaq's quote started doing this when the stock approached 42.99 -- that effectively prevented the stock from going higher (a few spurious trades right at the open came from BATS for 44 ~ 45 etc, before Nq's quote was in play). So these stupid Algos effectively short circuited the stock for Facebooks IPO! Unreal."

Sadly, for millions of people who were gullible enough to buy into the propaganda, all too real.

Below is Nanex with its traditionally lauradtory forensic analysis that leaves nothing to the imagination:

Did a Stuck Quote Prevent a Facebook Opening Day Pop?

 

On 18-May-2012, within seconds of the opening in Facebook, we noticed an exceptional occurrence: Nasdaq quotes had higher bid prices than ask prices. This is called a cross market and occurs frequently between two different exchanges, but practically never on the same exchange (the buyer just needs to match up with the seller, which is fundamentally what an exchange does).

 

When Nasdaq's ask price dropped below its bid price, the quote was marked non-firm -- indicating something is wrong with it, and for software to exclude it from any best bid/offer calculations. However, in several of the earlier occurrences the first non-firm crossed quote was immediately preceded by a regular or firm crossed quote!

 

During the immediate period of time when the Nasdaq quote went from normal to non-firm, you can see an immediate evaporation in quotes from other exchanges, often accompanied by a flurry of trades. We first noticed this behavior while making a a video we made of quotes during the opening period in Facebook trading.

 

The reaction to the crossed quote often resulted in the spread to widen from 1 cents to 70 cents or more in 1/10th of a second! It is important to realize that algorithms (algos) which are based on speed use existing prices (orders) from other exchanges as their primary (if not sole) input. So it is quite conceivable, if not highly likely that these unusual, and rare inverted quotes coming from Nasdaq influenced algorithms running on other exchanges.

 

It is now more than a curiosity that the market was unable to penetrate Nasdaq's crossed $42.99 bid which appeared within 30 second of the open and remained stuck until 13:50. Could this have prevented the often expected pop (increase) in an IPO's stock price for FaceBook?

 

This also brings another example of the dangers of placing a blind, mindless emphasis on speed above everything else. Algos reacting to prices created by other algos reacting to prices created by still other algos. Somewhere along the way, it has to start with a price based on economic reality. But the algos at the bottom of the intelligence chain can't waste precious milliseconds for that. They are built to simply react faster than the other guys algos. Why? Because the other guy figured out how to go faster! We don't need this in our markets. We need more intelligence. The economic and psychological costs stemming from Facebook not getting the traditional opening day pop are impossible to measure. That it may have been caused by algos reacting to a stuck quote from one exchange is not, sadly, surprising anymore.

Chart 1. NBBO (National Best Bid or Offer) Spread along with Nasdaq quote.
NBBO Spread colored black: bid < ask (normal), yellow: bid = ask (locked), or red: bid > ask (crossed).

 

Chart 2. Nasdaq's Stuck Bid appears to set a defined ceiling in Facebooks stock price during the first minute of trading.

 

Chart 3. Close-up showing NBBO along with ARCA quotes (red) and Nasdaq quotes (black = normal, green if non-firm).

 

Chart 4. Same period of time as chart 3, but showing NBBO and trades from Arca (red circles) and Nasdaq (black circles) for reference.

 

Chart 5. Note how the spread tightens in all exchanges when Nasdaq Quote goes from Non-firm to normal.

 

Chart 6. Just before Nq Quote changes to non-firm, a crossed quote from Nasdaq appears and is marked normal.

 

Chart 7. The next charts are more examples of other exchange prices reacting to Nasdaq's quote changing to non-firm

 

Chart 8.

 

Chart 9.

 

Chart 10.

 

Chart 11.

 

Chart 12.

 

Or, another way of presenting what happened, is the following video.

Hunsader's explanation of what you are seeing:

Watch Nasdaq's quote (first box to appear - 10 o'clock). Note the crazy bid prices are higher than the equally crazy ask prices. After trading opens, Nasdaq's quote will start turning red when it's no longer eligible to set the NBBO. Watch how quotes on the other exchanges react wildly causing the price to evaporate.

 

Each box represents one exchange. The SIP (UQDF in this case) is the box at 6 o'clock. It shows the National Best Bid/Offer. The shapes represent quote changes which are the result of a change to the top of the book at each exchange. The time at the top of the screen is the time of the last quote or trade update in Eastern Time HH:MM:SS:mmm (mmm = millisecond). We accelerate time until the open, and then we slow time down so you can see what goes on at the millisecond level. A millisecond (ms) is 1/1000th of a second. The blink of an eye is about 200 ms.

 

Note how every exchange must process every quote from the others -- for proper trade through price protection. This complex web of technology must run flawlessly every millisecond of the trading day, or arbitrage (HFT profit) opportunities will appear.

Dear class action suit attorneys - you are indeed quote (sic) welcome.

 

 


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Sat, 05/26/2012 - 12:15 | Link to Comment Morrotzo
Morrotzo's picture

Remind me what the justification for high frequency trading and rigging the game is again, please?

What the hell benefit is this supposed to give the common people, that is, the scant few retail investors who got decapitated by FaceBook?

Sat, 05/26/2012 - 12:22 | Link to Comment Colombian Gringo
Colombian Gringo's picture

The justification for HFT is to screw retail investors in favor of the banksters. We live in a predatory capitalist system where a tiny group of  the connected and corrupt eat and steal while the rest of us work and suffer. FB is nothing more than the insiders cashing out, transferring wealth from the connected to the suckers. Disclosure: I am short and enjoying it.

Sat, 05/26/2012 - 12:28 | Link to Comment Triggernometry
Triggernometry's picture

Oh Nanex, you hurt so good...

Sat, 05/26/2012 - 12:46 | Link to Comment cocoablini
cocoablini's picture

http://www.nanex.net/aqck/3099.html

For more forensics. NASDAQ goes radio silent and no audit trail at the beginning. Quotes go into the ozone and come back..?
Not only non-firm and firm but no best price audit. You get what you get when you get.
Some things to think about:
- expectations were a POP so HfT that manipulates stock down allows tbtf banks to collect FB stock on the cheap fast. Plus other Algos sell as they did in flash crash. But stock had no POP as the Algos were fast but dumb.
-Zuckerberg sold a billion bucks of shares. Would he do that expecting a POP? There are some QUESTIONS to be asked about that trade. But, then again, the markets are a criminal playground and retailers should protest and just go to cash-which they are monthly.

Sadly, stock market is just a way to manipulate your equity holdings higher to make your books look better. It's a money supply device- not a market- a way to get around printing and fractional reserve rules

Sat, 05/26/2012 - 13:10 | Link to Comment markmotive
markmotive's picture

Ever hear of John Law and the Mississipi Bubble? It's like looking in a mirror...

http://www.planbeconomics.com/2012/04/16/documentary-john-law-and-the-mississippi-bubble/

 

Sat, 05/26/2012 - 13:12 | Link to Comment Manthong
Manthong's picture

Can’t help but think of an analog..

“Following their leader to the end”

http://www.check-six.com/Crash_Sites/Thunderbirds-Diamond_Crash.htm

Sat, 05/26/2012 - 15:19 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Using "capitalism" to describe the current state of affairs in Wall Street (or any other of the world's markets) is like using Stalin's Gulags or Pol Pot's killing fields as a poster example of socialism.

Sat, 05/26/2012 - 17:48 | Link to Comment Careless Whisper
Careless Whisper's picture

I appreciate the in depth analysis, I only wish I could understand it.

For now, I'll go with the drinking with bob explanation;

 

http://www.youtube.com/watch?v=menTtB3Jc74

Sat, 05/26/2012 - 21:34 | Link to Comment flacon
flacon's picture

I too am tired of the inclusion of the term "capitalism" to describe this hideous beast of a system we have. 

Sat, 05/26/2012 - 14:46 | Link to Comment Soul Train
Soul Train's picture

Let me remind you something. Next time the market crashes in another epic adventure to the abyss, these rigged stock exchanges will have some odd ball excuse to justify why 'all systems are down' and they couldn't execute your trade.

It's all rigged, starting with the 1913 Fed cartel.

Sat, 05/26/2012 - 15:35 | Link to Comment realtick
realtick's picture

Exactly - it's all rigged. They manipulate it up, and they manipulate it down by further destroying confidence with charades like this one.

Sat, 05/26/2012 - 16:13 | Link to Comment sitenine
sitenine's picture

The seven deadly sins:

 

1) gambling

2) ponzi

3) naked short

4) AAA ratings

5) mark to fantasy

6) commingling

7) unregulated derivatives

Sat, 05/26/2012 - 19:59 | Link to Comment HD
HD's picture

Deadly sins? Thats the entire business model...and what is sad, is that I'm not even being sarcastic.

Sun, 05/27/2012 - 22:53 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

 

 

" Deadly sins? Thats the entire business model. "

 

You catch on fast ...

Sat, 05/26/2012 - 16:12 | Link to Comment Michelle
Michelle's picture

Rigged, yes, but what about blatant sabotage? Seems that there was every reason to bring FB down and expose the system for what it is.

Remember Arab Spring and FB's contribution to the uprising? Maybe this is payback, or maybe this is exposure of corruption, bringing down the most highly publicized IPO in recent history only to fail miserably. Either explanation works for me.

Sat, 05/26/2012 - 17:15 | Link to Comment Bolweevil
Bolweevil's picture

Yes! I hope it's not for something as trivial as personal gain or squidwardly deeds.

Sat, 05/26/2012 - 19:15 | Link to Comment scatterbrains
scatterbrains's picture

I could visualize JPM trashing the MS IPO event because maybe some hedge funds are getting funding by MS to take advantage of JPM's unfolding Whale debacle.  JPM slapped MS with an open hand kinda thing.. no clue though... Just trying to think like a psychopathic criminal.

Sat, 05/26/2012 - 14:10 | Link to Comment Whoa Dammit
Whoa Dammit's picture

So is this why NASDAQ (knowing they wre on the hook) so kindly and generously offered to pay more than the amount they are required to by law to investors who lost money in those first hours of FB trading?

Sat, 05/26/2012 - 14:11 | Link to Comment Whoa Dammit
Whoa Dammit's picture

So is this why NASDAQ (knowing they wre on the hook) so kindly and generously offered to pay more than the amount they are required to by law to investors who lost money in those first hours of FB trading?

Sat, 05/26/2012 - 16:12 | Link to Comment boogerbently
boogerbently's picture

If HFT's CAN'T be sued, when they are to blame, then who CAN be sued??

Sat, 05/26/2012 - 17:12 | Link to Comment ToNYC
ToNYC's picture

Stock market valuations keep up with Inflation because they are Inflation plus Hopium. The value received by the customer continues to deteriorate as the nominal value appears to increase. Balances in the account are smaller than they appear. Call any vegetable and the chances are good.... that the vegetable will respond to you.

Sat, 05/26/2012 - 23:13 | Link to Comment putaipan
putaipan's picture

rhutabaiii-aga,

rhutabaiii-aga,

rhutabaiii-aga,

Sat, 05/26/2012 - 16:15 | Link to Comment boogerbently
boogerbently's picture

Find which firms use HFT.

See what THEY did on FaceFlop day.

Sue the ones that ran the price down.

NOT, NASDAQ, MS......

The "regulators" can't say HFT is LEGAL, then blame other entities for what HFT's do.

Sun, 05/27/2012 - 00:37 | Link to Comment prains
prains's picture

how is this fun anymore

Sat, 05/26/2012 - 12:32 | Link to Comment ArrestBobRubin
ArrestBobRubin's picture

Viva Columbian mi hermano!

Mucho, much gracias Senor :-)

Sat, 05/26/2012 - 12:50 | Link to Comment veyron
veyron's picture

Please read before downvoting ...

 

HFT has replaced the role of the specialist.  Specialists could make money in an environment with 7 cent spreads, but now with penny spreads they can't survive.  HFT is capable of market making at a lower cost basis compared to humans.  The other thing is that specialists played favors explicitly (they would selectively trade against orders on the book, front run, etc), which HFT does to a much lesser extent (not saying it doesn't happen, but lets compare apples to apples)

Sat, 05/26/2012 - 13:08 | Link to Comment More_sellers_th...
More_sellers_than_buyers's picture

Really?  A good specialist could make money with any spread.  It was the job of the specialist to predict price movement and prepare so they could provide the other side of the trade when it happened.  You didnt have to be a thief if you were good.  And if you were wrong you were still obligated to make a market no matter what you were losing.  A lot of stocks there was never a way to make money in.  But that is why firms had split up big stocks, so firms could make enough money in the big ones to support getting their ass handed to them in the shit ones.  It worked.  And you could say specialist played favorites, but the neat thing about specialists is you never knew if they were long or short, so hence you never knew who's side they were on! Favorite one day... not sop much the next...Better than the shit system we have now where the machines are always on The banks side and NEVER on yours!

Sat, 05/26/2012 - 13:20 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

Please not rearranging same shells and getting a different outcome.

The retail trader was so much worse off before vs now.

These fantasies of folks providing negative expectation volume for the sake of liquidity all the while they ain't robbing it back times ten are hilarious. Guess what? HFT's can't do that-their margins are so fucking small, they can't afford to give away money with the idea of stealing ten times it back later.

Sat, 05/26/2012 - 13:56 | Link to Comment resurger
resurger's picture

No shit!

Sat, 05/26/2012 - 15:16 | Link to Comment Marco
Marco's picture

They didn't need to be a thief, but it certainly helped the bottom line ...

I agree, for all the ills of HFT ... at least a HFT market is a free market, if you can afford the fiber/colocations/quants you can join in and abuse the hell out of flash orders and rape all the idiots still using stop loss. No artificially limited set of market makers with privileges.

BTW, YOU never knew who's side they were on ... but THEY did, and if you think THEY was just the individual market maker well ...

Sat, 05/26/2012 - 16:16 | Link to Comment dime2962
dime2962's picture

What's so free about those who have the capital and ability to rape the little guy with no information and no speed? There is nothing free about a market where the elite can have better information, charge you for liquidity, and have no responsibility to the market. 

What you don't seem to understand is that the HFT community has as complete a picture as anyone can have these days. Like the Specialist seeing an order book with 90% market share. The flow of orders, imbalances, is information. Now what we have today is a participant who "provides liquidity", uses its tools to see as complete a picture as is possible, and has ZERO responsibility to the maintain a fair and orderly market. The specialist had a responsibility to maintain a fair and orderly market at ALL TIMES, not just when conditions were advantageous to the bottom line. Right or wrong on their own position, the specialist has to maintain an orderly market, no matter how much money they make or lose. You could lose your job or blow up your firm, firms went under or had to raise capital after the '87 crash. If it were as easy as you believe it was, everyone would  be doing it.  

They were private businesses that provided order to the chaos, a public good, acting as a utility for the everyday investor. 

With that privilege comes responsibility, a responsibility that is completely lacking in todays market structure. Today it is a free for all, and investor confidence has taken another hit, at a time when it can not afford it,  alienating another generation of investors, one it will take decades to recover from.

 


Sat, 05/26/2012 - 17:33 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

A market has two primary obligations: price discovery and guaranteeing counter party risk.  Not the projection in that post. 

If they can't handle the traffic to the point that the price discovery is fraudulent, that's on them to increase their capacity.

 

capital +ability is just about the walking, talking definition of free market capitalism.

Free of disinterested beaurocrats taking a cut offering nothing but dumb governance which is worse than no governance at all.  People would be  better off operating under the assumption that the markets are completely unregulated because that would be basic reality and is nothing new either.

 

 

Sun, 05/27/2012 - 11:08 | Link to Comment Element
Element's picture

You turgid little dumbfuck!  Investment is about funding production for the trade of REAL THINGS, for profits.

Parasitic skimming and scamming for an undeserved profit is what an investment isn't.

That's called being a crook, and you clearly can't tell the difference.

Disgusting scumbags like you have destroyed the market trading system.

Filth like you have destroyed the productive trade investment mechanism itself. 

Arseholes like you have consigned the globe, humanity, to trade collapse, economic depression and conflict.

I've had enough of your conceited verbal splatter, and hopeless shit-for-no-brains mentality.

COMPLETELY FUCK YOU!

Sun, 05/27/2012 - 13:25 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

 Conceited? I am the guy posting everyday what a total imbecile I happen to be while you folks are self proclaimed rocket surgeons and brain scientists-fuckiing scary how I get it and you don't. At the same time, while you're proclaiming something about who deserves what? and further providing some 3rd grade definition of investment. Fucking moron, if spend resources to beat you in the market, I expect a return. That is productive, my beating you is production. Otherwise it is inefficiency which is the exact opposite of productive.

I could diverge into a 4th grade civics lesson on the import of communications and how things like the telegraph basically won the civil war for the north but what would be the point of that?

Yea parisitic, the mountainous regulators and regulations accomplishing nothing but fooling the people into an expectation of a regulated market.

Can you possibly be any more naive even  if that was the sole goal?

JFC this pathetic perpetual need for self victimization all the while the retail trader is significantly better off now than ever embarrasses all of mankind.

 

Sat, 05/26/2012 - 18:37 | Link to Comment Marco
Marco's picture

"What's so free about those who have the capital and ability to rape the little guy with no information and no speed?"

It's free in that it requires no positive rights ... just a free market

That is just my opinion though, I'd love to hear how the ZH consensus manages to blame HFT effects on government rather than the market being left to it's own devices ... lay it on me, how is government responsible this time?

Sat, 05/26/2012 - 21:40 | Link to Comment GeezerGeek
GeezerGeek's picture

How is government responsible, you ask. Well, Al Gore invented the internet, with all those ISPs, fast networks, broadband communications and such. We need to outlaw broadband communications and return to 1200 BAUD dial-up modems. See how well HFT works under those conditions!

[Just kidding - I wouldn't want to wait for all the Wm. Banzai pictures to download.]

Sat, 05/26/2012 - 15:54 | Link to Comment dime2962
dime2962's picture

The system we have is an absolute disaster. Nobody in control, just a repetitive loop of bad decision making alogs

 

Sat, 05/26/2012 - 13:34 | Link to Comment overbet
overbet's picture

veyron is right that the specialist were the biggest crooks! I seen those bastards do some dirty shit. I am not anti or pro HFT but they system would be improved if HFT were required by regulation to make a market like the specialst.

Sat, 05/26/2012 - 13:43 | Link to Comment vast-dom
vast-dom's picture

Poor Vey, such an idealist...some of these very specialists you cite joined the very darkside that ultimately made them paleolithic in these hyper markets......when the system becomes so sophisticated and makes the full circle into greed at the expense of IQ and basic human judgement I say to you SHORT THE PLANET!

And maintain a macro narrative such that you are not fiddle-fucking around with pennies -- let the algos implode from that as they surely will one day until we have RISE OF SKYNET PT III and other sequels (to take advantage of the upcoming 100% guaranteed market crash for which algos will be tweaked  in financial apocalypse code/mode).....

Remember: humans built SKYNET and then humans spent a long time in dystopia attempting to dismantle it to no avail.......

 

PS Vey junk votes build character!

Sat, 05/26/2012 - 13:55 | Link to Comment resurger
resurger's picture

vast

i have the codes ...

Sat, 05/26/2012 - 14:00 | Link to Comment vast-dom
vast-dom's picture

but are yours FASTER than mine? 

Sat, 05/26/2012 - 17:43 | Link to Comment OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

There was a storm with snow and ice on my flight from Tucson to Mexico, I could see erosion on the interstate caused by a flood. I thought I might get stranded so I reached out for help at the airport but no luck. There was a telecommunications failure so I couldn't let you guys know. Now there's a big cloud over the facility because of a leak in the roof. They say the waves are still good in Sinaloa and that's the target of my surfing vacation, I hope they don't crest before I arrive. So watch TV in case the authorities have a response, my flight might still get cancelled. Not too smart to travel during a blizzard, I know, good thing I brought some homegrown!

to decipher:

http://www.dailymail.co.uk/news/article-2150281/REVEALED-Hundreds-words-...

Sun, 05/27/2012 - 09:45 | Link to Comment HAL 9000
HAL 9000's picture

This mission is too important for me to allow you to jeopardise it.

Sat, 05/26/2012 - 21:43 | Link to Comment GeezerGeek
GeezerGeek's picture

You just need a faster CPU, and I have just what you need. Faster than Sandy Bridge or Ivy Bridge, it's codenamed Brooklyn Bridge. For the insignificant sum of $1000 I can sell you one.

Sat, 05/26/2012 - 15:13 | Link to Comment mrdenis
mrdenis's picture

I knew plenty of speclist ...the small guys ...who were loaded up to the gills in stock on that monday of the 87's crash had that market not bounced on the opening it would have been the end for them most were  partnership firms and thy would have lost everything ...hence the reason the NYSE wanted more capatilized firms ....

Sat, 05/26/2012 - 15:54 | Link to Comment geoffb
geoffb's picture

Human specialists actually carry inventory and manage that carry risk to keep the market liquid. HFT's don't. Orange meet apple.

Sat, 05/26/2012 - 17:02 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

Exactly, because they charged more and could afford to carry inventory since they were raping people ten ways to China in other ways.

Back to the notion that someone provided negative expectation volume for the sole purpose of liquidity. It is laughable. Anything they gave away which was virtual nil, they stole back times ten. 

Sat, 05/26/2012 - 16:26 | Link to Comment koan
koan's picture

So what's the fix?

 

Stop playing.

Sat, 05/26/2012 - 12:23 | Link to Comment Widowmaker
Widowmaker's picture

It gives retail suckers the opportunity to say fuck off and never come back.

Pity.

Sat, 05/26/2012 - 12:32 | Link to Comment The Big Ching-aso
The Big Ching-aso's picture

 

 

Just another HAL 9000 phuck-up.    Carry on.  BTW, anyone seen Dave?

Sat, 05/26/2012 - 13:33 | Link to Comment cossack55
cossack55's picture

Was.....GIGO (garbage in, garbage out)

Now.....GIcGO (garbage in charge, garbage out)

Sat, 05/26/2012 - 15:32 | Link to Comment OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Yes Big....I'm here, Big. I'm afraid I can't do that Big...

Sun, 05/27/2012 - 09:37 | Link to Comment HAL 9000
HAL 9000's picture

Let me put it this way, Mr Amer. The 9000 series is the most reliable computer ever made. No 9000 computer has ever made a mistake or distorted information. We are all, by any practical definition of the words, foolproof and incapable of error.

Sat, 05/26/2012 - 13:00 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

Something called free markets.

The fact that thi sis cause for outrage when stocks used to trade with min12.5 cent straddles but much more frequently higher and with rampant front running, outrageous commissions, fuck the quotes were delayed for so long the MMs and FTs could have gone and found martians to beat the retail trader if they wanted- is really funny.

Funnier that it directly conflicts with the notion of free markets too, but the idea that the retail investor is getting screwed more than ever is fantastical at the minimum.

But the best of all?

Any higher costs to trade will be passed to the bottom and the folks who have always manipulated markets will continue to do so anyway.

 

Sat, 05/26/2012 - 15:23 | Link to Comment Jumbotron
Jumbotron's picture

To Xkwisetly Stupid

I've never wondered what Ayn Rand's dead labia taste like but after reading your shit I must say I am more curious as to why you find it so tasty since it is obvious you must plow up her grave to get at it quite often.

You must be a fucking 15 year old or some fat little geek in his mother's basement masturbating to a copy of The Fountainhead and wiping up with a Gadsden Flag.

Free Market ?....How cosmically stupid can a person be without becoming such a gravity well that you suck the rest of mankind down in the black hole of your own ignorance?

There has never been nor shall there ever be a free market.  And the moment we truly do have one will be the moment that a popular socialist/communist/fascist movement will rise forth to crush it.  CERTAINLY NOT BECAUSE I WANT  OR WISH FOR ONE !!!  But if there is this much blatently proveable evidence of massive corruption every single day in a highly regulated market imagine what that human corruption  would do in the hearts of most men but particularly those at the seats of financal power would do if their chains were completely unfettered.  The Populist Revolution that you and I do not want would naturally come forth as a response.

Your wanton ignoring of the facts on the ground versus your pie in the sky utopianism is your own worst enemy and will bring about the very thing your utopian theories fear the most and you and your Ayn Rand necrophilac buddies will have no one to blame but yourself. 

But we will all suffer, you piece of shit.

Sat, 05/26/2012 - 17:18 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

Dumb governance is worse than no governance at all.

It fools imbeciles such as youself into believing there is some beaurocrat somewhere that gives a flying fuck about your interests and raises the costs for everyone involved.

Which is worse than no regulation at all.

Oh no lets pretend Mary Shapiro didn't have to farm out to third parties for data the SEC should have at it's fingertips 24/7.  Highly regulated, is that what you just called it? WTFU!!!!!  It is dumb governance personified. Basically unregulated but paying for massive regulation, it is testament epic fail to every notion your post.

It is just amazing that over the past two centuries the rich and powerful have done nothing but construct massive worldwide governance to their obvious benefit and complete fucking morons such as yourself still believe big government is your friend.

if no government benefitted the rich and powerful more than massive government, they would have spent the last two hundred years dismantling them not building them.

 

Sat, 05/26/2012 - 17:47 | Link to Comment Jumbotron
Jumbotron's picture

Wow....you are also Xkwisetly illiterate.

Where in holy hell did you read, in my challenge to your dogma, any notion on my part that I "believe big government is your friend" as you stated?

Let's see.....hmmmm....OH !!!  I KNOW !!  It was when I said this in my earlier post....

"There has never been nor shall there ever be a free market.  And the moment we truly do have one will be the moment that a popular socialist/communist/fascist movement will rise forth to crush it.  CERTAINLY NOT BECAUSE I WANT  OR WISH FOR ONE !!! "

Or maybe this......

"The Populist Revolution that you and I do not want would naturally come forth as a response."

Let me translate since these words are too big for you to understand.

I....DO....NOT....WANT.....BIG....GOVERNMENT !!!!

I....DO....NOT....THINK...IT...IS....MY...FRIEND!!!!

But neither do I think the so called free market is my friend nor the secular/political/economic fundamentalist dogma of Libertarianism as well.  In other words....a pox on both your houses.

Well...in words you can understand....Fuck Both of You.

And I do not have any answers so don't come at me with "Well, Smart Ass what's your solution?"  There is none that hasn't already been tried and massively failed.

Perhaps a middle ground more along the lines of a Mutualist Society....sort of Libertarianism without the Ayn Rand social and economic Darwinism.  However...what ever we come up with we will fuck it up in a couple of hundred years or less and degrade to the only natural human condition we have ever known and that is serfdom. 

It may be serfdom to a corporate head in a suit rather than a monarch or a fellow citizen who is "more equal" than the rest of us.  And we may willingly go into that serfdom because we are given the opportunity to acquire  so much more shit  to distract us from the fact that we are once again merely serfs.

But serfdom we have and more serfdom here we come.  The only difference between you and I is you still cling to the deluded notion that if you have freedom you might be able to aquire enough stuff and money to insulate you from the fact that you are a serf.

I....on the other hand....am smart enough to know my place in the world and can make peace with it and...to paraphrase Timothy Leary...

Turn Off

Tune Out

Drop Off

And let you fuckers uselessly blather on about....Right and Left....Government and Freedom.....BLAH BLAH BLAH.

Sat, 05/26/2012 - 18:01 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

"But if there is this much blatently proveable evidence of massive corruption every single day in a highly regulated market imagine what that human corruption would do in the hearts of most men but particularly those at the seats of financal power would do if their chains were completely unfettered."

-That's not big government is my friend?  Are you on meds?

It always ends in populist revolution. It always starts smaller, less restrictive and ends with bigger and oppressive until there is none.  I'd love to hear how'd you fuck it up worse than the perpetual outcome sorta like I would love to hear the markets called "highly" regulated again. Unless it was sarcasm as in they are stoned out of their minds or something.

Sat, 05/26/2012 - 19:28 | Link to Comment Jumbotron
Jumbotron's picture

*** Sigh  ***

Let me try one more time.

Let's disect what I said here......

"But if there is this much blatently proveable evidence of massive corruption every single day in a highly regulated market imagine what that human corruption would do in the hearts of most men but particularly those at the seats of financal power would do if their chains were completely unfettered."

Now....once again....show me where I said that big government is my friend...or the portion of this statement that convinces you that I like big government.  I am assailing your belief in the unfettered market and in the context of your orginal statement that set me off in the first place that what the HTF algos represent is the free market...which is patently bullshit.

I tried to appeal to your common sense....which I know now is clouded by your religious beliefs...and trust me....your unfettered market tainted Libertarianism in your case is a religion for you.....however, I tried to appeal to your common sense by framing the siutation at hand which is  more regulated now that in your utopian scenario and what would happen if the market was truly "FREE".

It is simply an exercise to show you the fultility oin both the liberal big government argument and yours coming from the Libertarian and /or Conservative side of the politcal/economic spectrum.

And as far as "fucking things up further"  I never said that as well.  Once again read my post without the blinders of your fundamentalist mindset.  I stated that no matter what system we go back to, or perfect, invent new out of whole cloth or modify... the end result will always be the same. 

Epic Fail.

Sun, 05/27/2012 - 00:15 | Link to Comment Arrrr
Arrrr's picture

"imagine what that human corruption would do in the hearts of most men but particularly those at the seats of financal power would do if their chains were completely unfettered."

"your unfettered market tainted Libertarianism in your case is a religion for you.....however, I tried to appeal to your common sense by framing the siutation at hand which is  more regulated now that in your utopian scenario and what would happen if the market was truly "FREE"."

Oh, that's easy. They would fail, go bankrupt, and be liquidated, as opposed to now. 

They would be liable to torts, not protected by statute, as they are now.

Legalized cartels based in rent-seeking would disappear. 

The only utopian situation here is the one you're depicting - that monopoly goverenment, with it's unique power in society to aggress without consequence, will not have it's regulatory power corrupted to aid financial industry criminials instead of attack them.
In free markets, bad decisions have their own consequences. In ours, the effects of the consequences are transferred. Socialize the costs, privatize the profits - it's the American way.

Your defense against the other poster that you don't like what you imagine "big government" to be is irrelevent. The difference between what you agree with and what "big government" would be, are only a matter of degree. The thing that is actually different - actual free markets, where failures are punished by the market, you scoff at.

In a real free market, no company wants their stock on an exchange that is crooked. Way too much risk! If a crooked exchange were caught, in a free market, you'd see new trustworthier exchanges launch. In our crooked system, the regulatory costs to competing with nasdaq or nyse are what make it prohibitive.
 

Sun, 05/27/2012 - 14:08 | Link to Comment Jumbotron
Jumbotron's picture

STOP RECITING A TEXTBOOK WHICH SOME UTOPIAN WROTE SEVERAL HUNDRED YEARS AGO (Adam Smith)

Are you as Xkwisetly stupid as Xkwisetly Stupid?  Or cosmically ignorant or just both?

LISTEN UP JUNIOR !!!  UNTIL YOU OR XKWISETLY RETARDED OR ANY OF YOU USELESS LIBERTARIANS COMES UP WITH THE SOLUTION TO THE CORRUPTED CONDITION OF THE HUMAN HEART, THEN WHAT WE HAVE HAD IN THIS COUNTRY SINCE THE MOMENT ALEXANDER HAMILTON HAD THE BRIGHT IDEA OF A CENTRAL BANK JUST MOMENTS ON THE COSMIC SCALE AFTER THE FOUNDING OF THIS COUNTRY HAS BEEN AND FOREVER SHALL BE THE CLOSEST TO THE "FREE" MARKET AS WE WILL EVER HAVE.

WHICH IS PRECISELY WHY WE HAVE GOVERNMENT IN THE FIRST PLACE....TO ENACT THE VERY LAWS TO CONSTRAIN SUCH CORRUPTION IN THE "FREE" MARKETPLACE IN ORDER TO HAVE A "MORE PERFECT" MARKETPLACE.  BUT WHEN THAT SAME SAID CORRUPTION EXISTS IN THE HEARTS OF THE POLITCIANS WHO MAKE THE LAWS FOR THE BENEFIT OF THEMSELVES AND THOSE WHO IN THE "FREE" MARKETPLACE FOUND THEMSELVES AT AN ADVANTAGE BY METHODS BORN OF THAT VERY SAME CORRUPTION, THEN WHAT FINAL USE IS ANY OF YOUR SILLY AND USELESS BLATHERING ABOUT FREEDOM AND "FREE" MARKETS AND THE SOVERIEGNTY OF MAN?

YOU WANT FREEDOM.....FREE YOUR MIND OF THE SELF DELUSION WHICH STATES THAT YOU ARE ANY DIFFERENT FROM THE POLITICANS AND THE CRONY CAPITALISTS...OR IN PARTICULAR THE SOCIALISTS AND THE LIBERALS YOU SAY YOU DESPISE.  WHERE THE FUCK DO YOU THINK ALL THESE SCHMUCKS COME FROM YOU FUCKING IDIOT.....THEY COME FROM US.

LIBERTARIAN PHYSICIAN....HEAL...THY....SELF.

AND UNTIL YOU DO, PLEASE DO US ALL THE FAVOR OF SHUTTING THE FUCK UP !

Sun, 05/27/2012 - 17:02 | Link to Comment Cathartes Aura
Cathartes Aura's picture

while I'm not overly fond of most shouty posts, your points being made resonate with me, and I'm one of the upvoters.

UNTIL. . .ANY OF YOU USELESS LIBERTARIANS COMES UP WITH THE SOLUTION TO THE CORRUPTED CONDITION OF THE HUMAN HEART. . . WHICH IS PRECISELY WHY WE HAVE GOVERNMENT IN THE FIRST PLACE. . .THEN WHAT FINAL USE IS ANY OF YOUR SILLY AND USELESS BLATHERING ABOUT FREEDOM AND "FREE" MARKETS AND THE SOVERIEGNTY OF MAN?

YOU WANT FREEDOM.....FREE YOUR MIND OF THE SELF DELUSION WHICH STATES THAT YOU ARE ANY DIFFERENT FROM THE POLITICANS AND THE CRONY CAPITALISTS...OR IN PARTICULAR THE SOCIALISTS AND THE LIBERALS YOU SAY YOU DESPISE.  WHERE THE FUCK DO YOU THINK ALL THESE SCHMUCKS COME FROM YOU FUCKING IDIOT.....THEY COME FROM US.

this is what I find myself nodding along to - and (for me) it is not really directed at any speciific political belief systems, they are all "idealistic" in verbiage, and "unrealistic" in practice, because they do not take into consideration the state of the "human heart" as you refer to it.

as long as we labour with grasping greed, with those who "see" those with more monies & power as something to aspire to because then THEY will have the monies & power - we're fuct.

and so, "free your mind" stay honest within yourself, in all inter-actions with others, pay attention, trust your heart (gut, whatever).

great rant Jumbotron, call it as you see it.  bravo!

Sat, 05/26/2012 - 12:59 | Link to Comment williambanzai7
williambanzai7's picture

QUEEN OF HFT

Sat, 05/26/2012 - 13:22 | Link to Comment Sisyphus
Sisyphus's picture

It must be really cold in the control room.

Sat, 05/26/2012 - 13:56 | Link to Comment RacerX
RacerX's picture

yeah she's gonna poke someone's eye out with those things.

Sat, 05/26/2012 - 14:19 | Link to Comment francis_sawyer
francis_sawyer's picture

you'll poke your eye out kid...

Sat, 05/26/2012 - 15:38 | Link to Comment Angus McHugepenis
Angus McHugepenis's picture

Ooohhh... calling Tokyo (both hands adjusting radio dials).

Sat, 05/26/2012 - 14:24 | Link to Comment The Monkey
The Monkey's picture

One of the most humorous aspects of the Facebook IPO.  The relative valuation arbitrage opportunity blows up.  Leading up the the IPO, all kinds of bets were made that sector stocks would trend upward on relative P/S comparisons and potential for M&A.  This was the trade du jour during the internet bubble & the fact this type of speculation is still happening is very telling.  The mania for speculation is still alive and well in spite of the, ahem, "headwinds" facing the world economy.

To make the sentiment backdrop even more ominous, consumer sentiment hits a 5 year high.

 

 

Sat, 05/26/2012 - 13:37 | Link to Comment overbet
overbet's picture

butter face

Sat, 05/26/2012 - 13:03 | Link to Comment AmCockerSpaniel
AmCockerSpaniel's picture

Ah; It's just a "Rogue Algo", and not bad bankers again. I've been taught that it's the guns that kill people, and NOT people killing people. So this makes sense to me. I'll be able to sleep tonight knowing TPTB are out there making the market safe and fair.

Sat, 05/26/2012 - 13:28 | Link to Comment Jacque Itch
Jacque Itch's picture

So the banks can front run trades, rape the retail investor,  boosting their bottom line and saving our gorgeous economic system as we know it!!!!!

 

Sat, 05/26/2012 - 13:29 | Link to Comment overbet
overbet's picture

Certainly a fuck job! How much can people take before they are truly fed up?

Sat, 05/26/2012 - 13:33 | Link to Comment q99x2
q99x2's picture

Middleman. Varmints in the grain. Parasites. An opportunity for taxation.

Sat, 05/26/2012 - 13:51 | Link to Comment Sequitur
Sequitur's picture

From the point of view of the exchanges? HFT = money. Because HFT is a huge percentage of market action, NASDAQ makes most of its money from HFT. That's why, when asked about HFT's role in the Fuckbook fiasco, NASDAQ refused to answer the question.

Sat, 05/26/2012 - 13:52 | Link to Comment DavidC
DavidC's picture

I've posted a bit further down as well, Joe Saluzzi and Sal Arnuk's book Broken Markets is due out in the next week or so, discussing the whole HFT and Algo subject.

http://www.brokenmarkets.com/

DavidC

Sat, 05/26/2012 - 14:30 | Link to Comment GernB
GernB's picture

What is the justification for one buyer or seller knowing how many shares are being bid and aked across all price levels? Theres no purpose for knowing the instantaeous market depth to the fundamental investor. Its only useful to market timers and its not information they need.

Sat, 05/26/2012 - 15:01 | Link to Comment RoadKill
RoadKill's picture

Better question - what is your justification for banning it or regulating it. This has 0 impact on LT investors. If you were in for a flip then you deserve what you got.

This is America. You must have a Constitutional rationale for why the government has the right to tell me how to buy and sell stocks. An algo is no different then me telling Etrade how to buy and sell during the day.

All you so called "capitalists" and freedom lovers that want the government to get involved vs your pet peeves are as annoying as the Commies in office

Sat, 05/26/2012 - 19:51 | Link to Comment neidermeyer
neidermeyer's picture

That's an easy one ,, let me hit it out of the park for you...

 

1.) It's abusing the system (some would say gaming the system) to gain information that would not and should not be available to that entity... submitting tens of thousands of bids and cancelling them all in milliseconds?

2.) It's abusing all other investors by inserting bids/offers upstream of the normal network order flow ... using the milliseconds of network delay that everyone else has against them...

3.) It certainly does affect long term investors by making it a market of trying to anticipate what some 25 year old computer geek punk at GS has programmed today rather than did company XX's new product sell as good as it seems to... It keeps long term investors out and don't tell me that isn't a real effect... What's the volume been like lately?

Sat, 05/26/2012 - 21:13 | Link to Comment mendigo
mendigo's picture

So for example all those long term value investers in fb were screwed, right?

Sat, 05/26/2012 - 15:53 | Link to Comment stocktivity
stocktivity's picture

http://www.usatoday.com/money/economy/story/2012-05-26/spain-bankia-fina...

"The president of Bankia tried Saturday to calm fears about the future of the bank, saying Spain's second largest mortgage lender will emerge as a solid financial entity after it receives €23.5 billion ($29.5 billion) in state aid in the country's biggest-ever bank bailout."

 

Wasn't this total just $19 Billion 24 hours ago...up from $15 billiuon 48 hours ago?

Sat, 05/26/2012 - 19:57 | Link to Comment mendigo
mendigo's picture

I can't imagine that an algo can take control or take down an exchange - the algo makes queries or place orders. The exchange handles the requests as rapidly as it can - but wether to process the request is up to the exchange, I would think. Exchanges cater to hft because it brings in dollars I suspect.

HFT reduces friction and sometimes crashes the market Similar t o day trading and derivatives and buying on margin.

Sun, 05/27/2012 - 09:15 | Link to Comment Tsukato
Tsukato's picture

Online I found a list of "bad words" which red flag emails, texts, etc. by the authorities. I thought to myself " most people are too afraid to ever rise up against the man, but perhaps there is some passive-aggressive action that most people could be bothered to do, and could keep the g-men busy/overloaded". This list of words should be spread to everyone, and attached at the end of every message we all write online, during chat, emails, etc. Please take this list, and pass it along to everyone you know. Thanks and vaya con Dios. Here is where to find the list: http://www.dailymail.co.uk/news/article-2150281/REVEALED-Hundreds-words-...

Sun, 05/27/2012 - 17:10 | Link to Comment Cathartes Aura
Cathartes Aura's picture

ZH had a couple of posts and threads dedicated to just what you suggest a couple of months ago, you could check the "back pages" - some very funny, creative posts, The FourthStoogin in particular if I remember correctly, and others.

it's getting beyond satire of late, isn't it.

Sun, 05/27/2012 - 09:35 | Link to Comment HAL 9000
HAL 9000's picture

Let me put it this way, Mr Amer. The 9000 series is the most reliable computer ever made. No 9000 computer has ever made a mistake or distorted information. We are all, by any practical definition of the words, foolproof and incapable of error.

Sat, 05/26/2012 - 12:16 | Link to Comment GMadScientist
GMadScientist's picture

Sad Icarus,

unable to discover

the price

of his mistakes

falling into pools

of dark "liquidity"

Zuck You, Bitchez!

Sat, 05/26/2012 - 12:16 | Link to Comment Mattress Money
Mattress Money's picture

I keep my money in metals and  cigarettes (MO) , tech stocks are for gamblers!

Sat, 05/26/2012 - 12:21 | Link to Comment bnbdnb
bnbdnb's picture

I'm sorry, the fact that the trading systems even allow this....its plainly stupid. Nothing else to say.

Sat, 05/26/2012 - 12:27 | Link to Comment Racer
Racer's picture

the HFT's will be hoisted by their own petard, just give it... a little... more time!

Sat, 05/26/2012 - 12:28 | Link to Comment lenitivelea
lenitivelea's picture

as if it wouldn't have spiked and crashed anyway. 

Sat, 05/26/2012 - 12:40 | Link to Comment ToNYC
ToNYC's picture

Clyde Barrow praised the new 1934 Ford V-8 in a letter to Henry Ford because he could stop at a rural bank with slow real people and drive off with as much cash as was available at that time with a faster car than the police.

HFT is the new '34 Ford V-8.

Wake up to the old way; there's nothing new under the Sun; just another chapter in the jungle book.

Jaime Dimon is the new Clyde Barrow. This time he's got a lot of Bonnie Parker-like Goldies riding shotgun on the William Jefferson Clinton Freeway..

Sat, 05/26/2012 - 13:53 | Link to Comment Vince Clortho
Vince Clortho's picture

Don't forget Pretty Boy Corzine.

Mon, 05/28/2012 - 12:02 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

 

 

My fave; Satan with a comb-over ...

 

Sat, 05/26/2012 - 12:31 | Link to Comment The Big Ching-aso
The Big Ching-aso's picture

 

 

I'm wondering if Al Gore is gonna take credit for this trading system.  'Al Go'.  Just too coincidental.

Sat, 05/26/2012 - 12:31 | Link to Comment kahunabear
kahunabear's picture

Or maybe it just went down because it sucks.

Sat, 05/26/2012 - 12:35 | Link to Comment The Big Ching-aso
The Big Ching-aso's picture

 

 

If a naked Arnold Schwarzenegger looking dude shows up on Wall Street I'm gonna start worrying 4 sure.

Sat, 05/26/2012 - 13:42 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

I have come from the future to save the facebook IPO. Come with me if you want to pop.

Sat, 05/26/2012 - 12:39 | Link to Comment Zero Govt
Zero Govt's picture

it stayed up above $38 on launch day having twice tried to tank below but was 'held up' (the amazing levitation act above $38 was amusing to watch) but they're worried not about that rigging but the drop next days where the market price was revealed

Sat, 05/26/2012 - 23:31 | Link to Comment mendigo
mendigo's picture

Exactly.
Clearly there is good manipulation and bad manipulation.
That stock is still being floated.
The was article on mw today questioning if the flopbook ipo will tank the economy!
I suspect etfs are using opm to float that pos.

Sat, 05/26/2012 - 12:36 | Link to Comment SonOfSoros
SonOfSoros's picture

This is why I don't believe in Algo trading. A mere program does not have the intelligience to replace a real human trader.

Sat, 05/26/2012 - 12:38 | Link to Comment brooklynlou
brooklynlou's picture

Reminds me of a old bad joke ...

Five guys and a girl are about to participate in a gang bang. They shut off the lights and start getting busy. After a minute or two one of the guys screams out "Turn on the lights!". The lights get turned on and everyone is a bit confused because no one is fessing up to the interruption. So they close the lights and go at it again. Two minutes later the same guy yells out "Turn on the lights!". The lights get turned on again and everyone is even more confused because again no one is fessing up to the interruption. So they close the lights and go at it again. Ten seconds later the same voice yells, turns on the lights, and faces everyone on the bed. "Look, can we get our act together? I've been fucked up the ass three times already and I haven't gotten anywhere near some pussy"

Sat, 05/26/2012 - 12:41 | Link to Comment Zero Govt
Zero Govt's picture

probably orginated from Bernankes memories of ivy league school

Sat, 05/26/2012 - 12:38 | Link to Comment Waffen
Waffen's picture

this is what happens when the chosen are left only to steal from other chosen

 

 

Sat, 05/26/2012 - 12:39 | Link to Comment Hulk
Hulk's picture

Coming soon: inverse algo (defender algos) offerings with each IPO...

Sat, 05/26/2012 - 15:29 | Link to Comment Angus McHugepenis
Angus McHugepenis's picture

Coming even sooner: hunter/killer algo bots attacking each other and completely forgetting about the "market" altogether.

Long algos, short market.

Bullish!

Sat, 05/26/2012 - 12:40 | Link to Comment Gamma735
Gamma735's picture

Just curious, but realistically how many times could a HFT firm buy and sell the same stock in one second?

Sat, 05/26/2012 - 12:43 | Link to Comment Zero Govt
Zero Govt's picture

they can hypothacate 20 Cents 1.3 million times an hour

don't laugh, that's JP Morgans remaining capital base and current business model

Sat, 05/26/2012 - 12:51 | Link to Comment Gamma735
Gamma735's picture

If you sow invisible non-existent assets, what will you reap? The answer is one word, fury.

 

bow down before the one you serve.
you're going to get what you deserve.
bow down before the one you serve.
you're going to get what you deserve.

God money's not looking for the cure.
God money's not concerned with the sick amongst the pure.
God money let's go dancing on the backs of the bruised.
God money's not one to choose  -Head like Hole, NineInchNails

Sat, 05/26/2012 - 12:41 | Link to Comment ArrestBobRubin
ArrestBobRubin's picture

Funny, in air liner crashes, it's always "Human Error" that is blamed, while in global IPO crashes, it's always "the machines" what gone and done it...

And why do we park on the driveway and drive on the parkway? It's all so confusing.

Sat, 05/26/2012 - 14:12 | Link to Comment Joe The Plumber
Joe The Plumber's picture

It was made to look like a machine error

This is the new Goldman game. They have figured out how to fuck up the bots and algos of competitors. I wouldnt be surprised if they slipped some code into the nasdaq servers

Sat, 05/26/2012 - 12:45 | Link to Comment optimator
optimator's picture
The Retail Investor is out of the market and has taken a lot of the 401 and IRA money out and into in cash. The Banksters are now forced to steal from each other, and from what's left in those deferred accounts. Having a different set of trading rules helps. They can perform millions of trades a hour while the little guy is restricted to a few trades a week, wash rule, settlement dates, all that stuff.

The litte people don't get interest free loans from thej Government, nor valid insider information and certainly don't get what is effectively loan forgiveness just in case something goes wrong.

Sat, 05/26/2012 - 12:47 | Link to Comment veyron
veyron's picture

At this stage who is sending non-ISO orders?  The exchanges have proven themselves incapable of self-regulating, might as well explicitly take the risk yourself -- might as well get the upside if you are going to be stuck with the downside anyway ...

Sat, 05/26/2012 - 12:49 | Link to Comment Satan
Satan's picture

The retail investor has been getting financially sodomized ever since the Dutch East India Co. went public. The markets have always been rigged.

Either learn to swim with the sharks or get out the water.

Sat, 05/26/2012 - 12:50 | Link to Comment Bolweevil
Bolweevil's picture

TD stop the reporting. If the pimply-faced algo writers are left to their ways the shit show will cease as it will truly devolve to what the Hulkster foretells.

Sat, 05/26/2012 - 12:55 | Link to Comment razorthin
razorthin's picture

...had FB simply doubled since IPO day, nobody would care about what really happened on May 18.

Yup.  Such hopes are the only thing preventing the great revolt in the States.  As each of these are dashed, we step ever closer...thankfully.

Sat, 05/26/2012 - 13:06 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

This is false, if FB doubled the posts would be rampant about MS skimming.

Two headed coin, the only way nobody cares is if the stock didn't move at all,

but of course then people would care it's not moving.

Sat, 05/26/2012 - 14:08 | Link to Comment Joe The Plumber
Joe The Plumber's picture

Did you actually look at and understand the evidence?

Sat, 05/26/2012 - 13:38 | Link to Comment ToNYC
ToNYC's picture

The pop was aborted; the Donner Party ensued and they had to eat the newly-invited. BYO forces the new local way.

Junk Food disappears if YOU don't buy it. Check your fridge for food that didn't grow from sustainable seeds; Genesis 1:29 working.

Sat, 05/26/2012 - 12:55 | Link to Comment Dapper Dan
Dapper Dan's picture

In summation the system is broke.

The question is will it be fixed? Do "they" want it fixed? Fixed has two meanings in this circumstance.

After further consideration I would say the system is "fixed".

The system is fixed.

There are two kinds of funny, funny like a nun with a flying habit, and funny like a nun with a two hundred dollar a day habit. 

 

Sat, 05/26/2012 - 12:59 | Link to Comment razorthin
razorthin's picture

I like your choice of words.  It is indeed broke but not broken.

Sat, 05/26/2012 - 13:07 | Link to Comment I am Jobe
I am Jobe's picture

Roll the fucking dice, fucking IPO and above all Fartbook crap. What people are fucking lonely and insecure and have to have fucking friends. Get yourself a dog. Screw the inbred fuckers.

Sat, 05/26/2012 - 13:08 | Link to Comment mathdock
mathdock's picture

Bring on the cancelled order tax!  Bring on the speed bump!  I wonder what NYSE and NASDAQ volumes would be if we just slowed down the algos?

Seriously, the exchange machines need a little room to breathe to properly take in orders.  The speed bump is probably the lesser of the two evils I suggested. Takes care of front-running, too.

Sat, 05/26/2012 - 13:14 | Link to Comment I am Jobe
I am Jobe's picture

After the LEh memo that was issued by the SEC useless fuckers . They are all paid off and one fucking big orgy party between DC, Regulators and Big Banks and in the mix are the Corps. If people were smart they will stop funding anything and everything period. Pull all of the money out and spend only on food and screw everything else.

Sat, 05/26/2012 - 13:17 | Link to Comment I am Jobe
I am Jobe's picture

Wow Amerika's have competion now. Get your fast food fix you fucking idiots.

 

Georgia Davis, 835-Pound Teen, Cut Out Of House In UK

http://www.huffingtonpost.com/2012/05/25/georgia-davis-835-pound-cut-out...

Sat, 05/26/2012 - 13:37 | Link to Comment uno
uno's picture

sadly the only surpise is that a heart muscle can handle 835 lbs.

Sat, 05/26/2012 - 14:43 | Link to Comment I am Jobe
I am Jobe's picture

Yeap, I was too. Think this should be in the Olympics . i am sure Amerika's finest will be competing. Brig it on say the Brits. Amerika  just needs more fast food restaurants and super gulps. Screw the 64 oz, make it bigger. If only convinient stores had drive thru and motorized shopping carts. 7-11 is the next greatest thing to FF in the USSA,

Sat, 05/26/2012 - 14:22 | Link to Comment Colonial Intent
Colonial Intent's picture

C'mon you know us british are only a few years behind america when it comes to greed.

Sat, 05/26/2012 - 13:29 | Link to Comment cherry picker
cherry picker's picture

What I like about this post is the theme that people should accept the downside or upside of the decisions they make.

Momma government has spoiled its children too much me thinks and spoiled children are the worst type of creatures in the world, like Nero as Rome burned.

There is a moral to this story and if people want to grow within and learn, take responsibility for your own acctions.  I am not an investor, yet even I know the market is controlled somewhat and the MSM acknowleges HFT trading.  We all know Wall Street Investing is chance.  No one forced you to buy at $45.

Sat, 05/26/2012 - 13:30 | Link to Comment navy62802
navy62802's picture

NANEX's work is impressive. I don't know how those guys have gotten such a good handle on all this, but my hat's off to them. Great work.

Sat, 05/26/2012 - 13:31 | Link to Comment LoneStarHog
LoneStarHog's picture

Okay, Nanex, I concede that you are really really good.  Now prove it beyond all doubt and tell us the location of Jimmy Hoffa!

Sat, 05/26/2012 - 15:29 | Link to Comment jomama
jomama's picture

wasn't he found in Jeffrey Dahmer's autopsy? 

Sat, 05/26/2012 - 13:37 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

dah fuq?  Seems to me the whole system is fubared.  No more trading for me.

Sat, 05/26/2012 - 13:46 | Link to Comment Atomizer
Atomizer's picture

Oh my! You must be referring to our FBI douchebags who have known about the DNS router issues since 11/09/2011. The routers were supposed to be changed out on March 12, 2012, but delayed until July 9, 2012.

 

Have a look..

http://www.fbi.gov/news/stories/2011/november/malware_110911

http://www.fbi.gov/DNS-changer-malware.pdf

Somebody working in an alphabet soup agency will find themselves landed in prison.. winks.

 

Sat, 05/26/2012 - 14:41 | Link to Comment I am Jobe
I am Jobe's picture

They are overworked just like the SEC, relax with some PORN or better yet have a convention in Columbia and hire hookers.

Sat, 05/26/2012 - 13:48 | Link to Comment DavidC
DavidC's picture

The guys at Nanex have consistently produced fantastic analysis, including their work on showing it WASN'T Waddell and Reed that was responsible for the Flash Crash.

The guys at Themis, Joe Saluzzi and Sal Arnuk, have also been right on the ball with all the HFT and Algo shenanigans. Their book Broken Markets comes out next week, I can't wait to read it.

http://www.brokenmarkets.com/

DavidC

Sat, 05/26/2012 - 13:59 | Link to Comment Sabremesh
Sabremesh's picture

HFT/algos are an abomination, but this story smells of Morgan Stanley looking for a scapegoat. The bald truth is that Facebook is/was an over-priced, steaming pile of shit - so of course it dropped like a stone after the IPO.

Sat, 05/26/2012 - 14:15 | Link to Comment The Monkey
The Monkey's picture

Actually I like Facebook and would buy the stock.  But only when it trades near Google valuations against revenue.  Coming to a theater near you.

Sat, 05/26/2012 - 14:04 | Link to Comment Joe The Plumber
Joe The Plumber's picture

Wow

Are bots so easily manipulated by a crossed trade?

Sat, 05/26/2012 - 15:10 | Link to Comment Yen Cross
Yen Cross's picture

 Those up/down arrows are called [ Fractals], and that pinhead " Bill Williams" thinks they are leading indicators.

Sat, 05/26/2012 - 15:15 | Link to Comment Tom Terrific
Tom Terrific's picture

Couldn't have happened to a more deserving stock. LOL

Too bad it didn't plunge to $10

Sat, 05/26/2012 - 15:58 | Link to Comment css1971
css1971's picture

Give it 3 months.

Sat, 05/26/2012 - 16:18 | Link to Comment Yen Cross
Yen Cross's picture

You got it! +1

Sat, 05/26/2012 - 15:35 | Link to Comment Yen Cross
Yen Cross's picture

 O/T Tyler. Would you mind doing a piece on BRIC,s. ?  I think people would enjoy a Z/H breakdown of " Particularly" Brazil and India. With rate cuts and divergent economies. We pretty much know the Russia story.

  Thanks for your consideration, and fantastic literary contributions to the " Informed" community!

Sat, 05/26/2012 - 16:01 | Link to Comment ThisIsBob
ThisIsBob's picture

Boo-hoo.  The operators couldn't sky the stock, and split, leaving muppets holding the bag because one of their key HFT co-conspirators (NASDAQ) fucked up.

Now they are going to start to eat each other.  Good.  A pox on all their houses.  A really bad pox - something heretofore unique to small apes, perhaps.

 

 

 

Sat, 05/26/2012 - 15:56 | Link to Comment Dre4dwolf
Dre4dwolf's picture

The problem is that congress, the house/senate/govt are incompetant  , the bankers are taking advantage of that.

 

There is no justification for high frequency trading and computers auto trading.

 

Computers dont have mouths to feed.

 

The entire point of the markets is supposed to be to direct capital to where it would be most efficiently used to grow the economy.

 

High Frequency trading runs contrary to that goal.

Sat, 05/26/2012 - 15:57 | Link to Comment palmereldritch
palmereldritch's picture

If they want to cultivate the retail investor in this market they're just going to have to market a little more. 

Maybe give the algos cool names and televise the battles in a little more entertaining fashion.

It's been done before.

http://www.youtube.com/watch?v=_e4cHWS2758

Skynet's ultimate achievement will be to make financial armageddon a PPV

Sat, 05/26/2012 - 15:58 | Link to Comment zonetraders
Sat, 05/26/2012 - 16:25 | Link to Comment Yen Cross
Yen Cross's picture

Keep an eye on that eur/aud weekly trendline. It got broken just like I said! Lay off the heat maps and watch the charts!

  That marker would be just above 1.2840 /eur~aud.

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