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When It All Goes Bidless: What Losing $1 Billion In 100 Milliseconds Looks LIke

Tyler Durden's picture





 

It's quiet out there; too quiet. But if you were watching carefully this morning, everyone's favorite government-subsidized bank - Citigroup - flash-crashed to the tune of a $1.2bn market-cap loss in a fraction under 100 milliseconds. A 1.3% micro-crash on absolutely massive volume so perfectly visualized thanks to Nanex. When does this 'liquidity-providing' fiasco stop?

 

August 27, 2012 at 10:27:50.900 Citigroup (symbol C) dropped 1.3% (from 29.80 to 29.42) in about 100 milliseconds.

1. One second interval chart showing trades color coded by exchange.



2. One second interval chart showing best bids and offers color coded by exchange.



3. One second interval chart showing all bids and offers color coded by exchange.



 

The following chart shows trades and bid/ask spreads for one of the reporting exchanges. ISO trades are color filled, while all other trade conditions are empty (white). Note, trades from NY-ARCA (red) began dropping about 20ms before NYSE (blue) where the price fell apart

 


 


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Mon, 08/27/2012 - 12:46 | Link to Comment yogibear
yogibear's picture

Good! Bot against Bot. The loosers blow up.

Mon, 08/27/2012 - 12:48 | Link to Comment Jack Napier
Jack Napier's picture

It would be more entertaining if they gave each algo a Rock'em Sock'em Robot body.

Mon, 08/27/2012 - 12:52 | Link to Comment camaro68ss
camaro68ss's picture

And its gone........

Mon, 08/27/2012 - 12:54 | Link to Comment HoofHearted
HoofHearted's picture

C has been warned. Keep screwing around, and we'll do this for real!

Mon, 08/27/2012 - 12:59 | Link to Comment strannick
strannick's picture

ZH. Keeping score. For the record.

Mon, 08/27/2012 - 13:09 | Link to Comment malikai
malikai's picture

HFTs are not liquidity providers. HFTs are liquidation providers. Please update your records appropriately.

Mon, 08/27/2012 - 13:30 | Link to Comment francis_sawyer
francis_sawyer's picture

The reason I never really got into BITCOIN (or any shit like that), is because in the end it seemed to me like the 'bitcoin miners' could just set up computers & steal shit at will...

This pretty much is the same thing...

Mon, 08/27/2012 - 13:38 | Link to Comment redpill
redpill's picture

Might crack the top 10!

 

http://www.youtube.com/watch?v=Oo3zWxO3yYs

Mon, 08/27/2012 - 13:45 | Link to Comment malikai
malikai's picture

I'm a big fan of bitcoin. But I don't partake as of yet. The ultimate problem I have is that they are fiat, no matter how constrained.

How would the miners steal at will? Are you aware of their function and how they get paid?

Check this out if you haven't already: http://www.weusecoins.com/mining-guide.php

Miners use hardware and electricity to 'generate' coins and provide the cryptographic services required for transaction processing. They have to actually 'work' to get coins, unlike our overlords at the central banks.

Mon, 08/27/2012 - 13:48 | Link to Comment francis_sawyer
francis_sawyer's picture

All I've done is glossed over it...

I'm not really talking about the 'price discovery' aspects (there seem to be some merits with respect to that)... My problem is when I saw all these addicts setting up multiple computer servers, which, from what I gathered in my brief audience, were basically just using the servers to mine coins...

WTF is that all about?... & if that's the case when something is small peanuts (like bitcoin is)... What would happen on a LARGE scale when the REAL THUGS came to town...

My point is... N-O-T-H-I-N-G is fail safe... Crooks will always find a way to infiltrate the system & steal from you... With that in mind ~ I'd rather make HARD ON THEM... In the end, I can handle a bunch of barbarians swinging poleaxes, maces, & tridents... I just don't want no dweeby little shit wearing a yamulke & eating a kosher 'hotpocket' while sitting in an air conditioned room stealing from me...

Mon, 08/27/2012 - 13:56 | Link to Comment redpill
redpill's picture

Of course nothing is fail safe, and obviously bit coin has had its share of scandal.  However, it when it comes to thuggary, there is no one worse than one Federal Reserve.

Mon, 08/27/2012 - 14:27 | Link to Comment francis_sawyer
francis_sawyer's picture

Surely the 'non'-Federal 'non'-Reserve has taken the art of the thievery to new heights...

But as for BITCOIN, let's just call that 'latent', or 'kinetic' thuggery at this point... The worse thing it could ever do is to get sophisticated...

Mon, 08/27/2012 - 15:24 | Link to Comment Turin Turambar
Turin Turambar's picture

IMO physical gold is fail safe.  When all goes to hell, you've still got the gold.  Oh yea, 100% reserve commodity currency is the way to go.  No fraud (fractional) banking allowed.  It's really not that hard people.

Mon, 08/27/2012 - 16:01 | Link to Comment Dr Benway
Dr Benway's picture

NOTHING is fail safe, NOTHING is 100%, and you are doing yourself a disservice by not realizing this.

Tue, 08/28/2012 - 13:26 | Link to Comment Turin Turambar
Turin Turambar's picture

Yes, and the limit of 1/infinity = 0.  I get it hypothetically speaking.

In a world where gold is no longer a store of value, your life span will be a function of how much food, water, and bullets you have.  Does that clarification make you feel better?  ;-)

Mon, 08/27/2012 - 14:18 | Link to Comment malikai
malikai's picture

I think I see what you're saying. If someone decided to put up a supercomputer or other large scale miner in order to destroy it. Well, I don't know if Shitoshi was thinking specifically about that but there is a pretty good couple of couters to that.

  1. Mining becomes 'harder' as the pool of miners or collective 'mining power' grows. So there are diminished returns for bringing on a big parralel fpga system online and it would just about be cost prohibitive, from my perspective.
  2. The production curve for BTC somewhat resembles hubbert's curve, except far more steep on the decline side and fixed by time. So this means that as time goes on, far fewer returns exist for large scale miners, diminishing their ability to get a large market share.

Caveats do exist, however. Regarding #1, early adopters are in a significant advantage, meaning they could move the market, quite easily. But as time goes on and they take profit (redistributing coins), their individual shares decline. Regarding #2, the vision is that as the production curve declines, mining purpose switches to focus on fee-based transaction processing. This means that large scale transaction processors could gather enough coins to do damage. But again, they are restricted by the same laws that apply to #1.

1 BTC is $11 right now, from about $7 in July. Last year's illiquidity bubble put them in the $30s. They flash crashed last year after a few months because a whale on GOX got his password cracked (due to GOX being weak security-wise and the whale's poor choice in password), but they have been grinding higher ever since and liquidity continues to grow. I lost the coins I had been playing with on GOX at the time during the flash crash.

Personally, I think BTC is an excellent case study in a modern truly free money market. I plan to put a few models on it at some point. I'm very much interested in seeing what I can find through that.

Mon, 08/27/2012 - 14:36 | Link to Comment francis_sawyer
francis_sawyer's picture

@malikai

At this level (which is tantamount to AMOEBA level) on Bitcoin... I'm as fascinated as you are... But then I just think of the way things ALWAYS go...

Think of it this way... In 1913, I'm SURE that there were at least a few well minded folks that thought the Federal Reserve was a good idea... On that note, I'm sure that the original THIEVES (who, could in no way imagine the technologicalk advancements to come) could not have possibly dreamed that their thievery could reach such incredible heights...

Things are dynamic, they evolve, they morph... I can't imagine BITCOIN would ever escape the criminal aspects that befall any wealth accumulation scheme...

This thred deals with theft of billions in milliseconds (I couldn't help but recall the ongoing threads on co-located systems on high speed fiber optic & telecom lines between NY & Chicago)... It leads you to God knows where... Real estate in Cleveland?

Anyone around here schooled on 'prism optics'?... If so, you'll get my point...

Mon, 08/27/2012 - 15:00 | Link to Comment malikai
malikai's picture

Yea, that opra feed is a monster. We used to run one to our Jersey colo. The hardware on either side cost us millions, not even including the feed or licensing. It never made sense to me why it was necessary to spend so much money on so much bullshit data. To me, the whole feed seemed like 99.99% bullshit, 0.01% useful data.

Anyway, who knows where btc will go. Either way, I'm watching it closely. I don't think it will become the next fed, not by a long shot. To me, what's interesting is seeing how the btc organism copes with crisis and adapts to its environment.

Mon, 08/27/2012 - 17:40 | Link to Comment The Big Ching-aso
The Big Ching-aso's picture

 

 

Excessive masterbotion.     They'll get hairy CPU's & then go HAL 9000 blind.

Mon, 08/27/2012 - 18:57 | Link to Comment Turin Turambar
Turin Turambar's picture

Per Mises Regression Theorem, money originates from a commodity.  Money isn't just an idea that somebody came up with and everybody adopted.  If so, then where did the valuation and prices come from?  Out of thin air?  No.  They would have to be arbitrarily created, and as such, it's similar to a fiat currency and will inevitably fail.  Some people try to be too clever for their own good; yet, cleverness does not allow one to disregard the laws of economics, ... e.g.  FED.

Mon, 08/27/2012 - 15:01 | Link to Comment blunderdog
blunderdog's picture

Bitcoin is NOT "fiat."  It is not legislated as a legal currency in any way.

Mon, 08/27/2012 - 16:31 | Link to Comment XenoFrog
XenoFrog's picture

The bitcoin environment is filled to the rafters with scams and schemes. Bitcoiners tend to have a split personality where they want to promote their "alternative currency" by saying, "get in early! before the value explodes!" and yet at the same time advertise it as a stable alternative. It cannot be a stable alternative as well as a way to get rich quick so long as you get in early.

 

Most of the bitcoins are held by a few big players, it's impossible to cash out of any significant number of bitcoins without crashing the market, and the only real use for the coins is for purchasing drugs and other illegal things off silkroad.

If you want to mine your own bitcoins, you will use more electricity and wear down your computer than it's worth. If you want to convert your money into an electric bill, go right ahead.

Does this seem like a good idea? Really?

Mon, 08/27/2012 - 16:56 | Link to Comment blunderdog
blunderdog's picture

    Does this seem like a good idea?

Only if you're committed to the idea of "money."

If you don't care about money as a concept, and are A-OK with the CB's destroying it, Bitcoin is a "nothing."  If you care about money, it's a great idea.

Mon, 08/27/2012 - 16:59 | Link to Comment XenoFrog
XenoFrog's picture

You're correct in the fact that Bitcoin is nothing. Enjoy proving how US fiat is a ponzi scheme by getting involved in a much more obvious ponzi scheme.

Mon, 08/27/2012 - 17:03 | Link to Comment blunderdog
blunderdog's picture

You don't understand what Bitcoin is at all.  It's not a Ponzi scheme.  It's a virtual commodity.

Mon, 08/27/2012 - 17:05 | Link to Comment XenoFrog
XenoFrog's picture

A virtual commodity controlled by a tiny number of bitcoin holders, and the exchanges are designed to make it easy for you to put money in and very hard to pull money out. Its followers cry, "Get in now before it's too late! You too can be rich quick!"

 

Now go look up Ponzi scheme in the dictionary. I'll wait.

Mon, 08/27/2012 - 17:35 | Link to Comment blunderdog
blunderdog's picture

It's not "controlled" by anyone.  Once you have it, you can exchange it with any party who wants to exchange it.

Believe whatever you like.

Mon, 08/27/2012 - 18:59 | Link to Comment Turin Turambar
Turin Turambar's picture

Yeah, I'll gladly exchange my material capital for virtual capital!  lol  The only 2 reasons people have stuck with fiat currency for as long as they have is the fact that at one time it was tied to something physical... usually gold or silver and legal tender laws.  Had this not been the case, then people would've thought the person who "invented" fiat currency was crazy.  Fiat currency with no history of commodity backing and no legal coercion to mandate its acceptance is akin to asking a person to part with the hard earned fruits of his labor in exchange for worthless little slips of paper or little metal discs that have no intrinsic value other than the "promise" that other people will accept them.  LOL

Tue, 08/28/2012 - 09:41 | Link to Comment blunderdog
blunderdog's picture

A medium of exchange doesn't have to backed by a physical resource.  This should be obvious to everyone, given that none of the prevailing media of exchange are currently backed by any resources.  In case you haven't noticed, the dollar has continued to "work" despite that lack of a commodity-backing.

As a store of value, what defines the rate of inflation is the ease with which more of the commodity is produced.  Bitcoin is limited in production by mathematical definition.

Apparently that whole "Austrian economics" realization is far too advanced for some readers.

Mon, 08/27/2012 - 18:49 | Link to Comment malikai
malikai's picture

As with anything worth paying attention to, BTC is controversial. Here demonstrated by our downvote fans.

Mon, 08/27/2012 - 22:12 | Link to Comment Neethgie
Neethgie's picture

dude that is the most fucking stupid thing i have ever heard a virtual commodity, that is a paradox. It has no backing it does not even exist, how moronic can you be to buy into a ponzi scheme, A VIRTUAL COMMODITY, here do you want some virtual oil to start your virtual car with... get more people to buy and we will change the world... bitcoins keep losing value vs fiat.

 

There was a song named imaginary places.. where the song goes "kids if you wanna piss off your parents buy real estate in imaginary places" You are an adult who has done that... madness

Tue, 08/28/2012 - 09:30 | Link to Comment blunderdog
blunderdog's picture

It's apparently beyond your understanding to think of a "virtual" anything.

What is the meaning of something like a "contract" in your world?  Do you believe a promise can "exist" in any meaningful way?

I don't really expect most folks to be able to understand what Bitcoin is.  It's not simple.

But then--neither is money.  Obviously most folks don't understand what that is, either.

Mon, 08/27/2012 - 13:25 | Link to Comment Skateboarder
Skateboarder's picture

Still regretting not throwing all my money into C when it was a dollar after the big crash. Twenty+ timesing your "investment" in a couple of years is like magic mang.

Mon, 08/27/2012 - 13:33 | Link to Comment francis_sawyer
francis_sawyer's picture

citi did a reverse split when it got over $5 and was threatening to crash again...

It is & always was a piece of shit (that is propped up by mindless MOMOs in the interests of saving their jobs so that gullible 401k holders don't bail [which keeps the Saudi Princes inWestment from going tits up)...

As is everything ~ it's all bullshit...

Mon, 08/27/2012 - 13:48 | Link to Comment Skateboarder
Skateboarder's picture

I didn't know about the split - that renders the returns much lower than the big numbers make it out to look. Still quite impressive in terms of the short-term (lol at the phrase considering the HFT operations that have been screwing the place left and right) gains that one could have made by buy-low-sell-high at the right time.

My dad still owns WFC - I should probably get him to sell that shit and convert to gold before fiat goes down the toilet or gold reaches orbit.

Mon, 08/27/2012 - 14:08 | Link to Comment KingTut
KingTut's picture

.. and you have to ask yourself "what is the true risk in buying the stock of an insolvent bank"?

You are betting that the Fed will simply look the other way long enough for you make some bank (so to speak).

Mon, 08/27/2012 - 14:44 | Link to Comment francis_sawyer
francis_sawyer's picture

Oddly ~ If one has everything else taken care of:

~~~

- food

- land

- water

- PM's

- guns & ammo, etc.

(NONE of which are a panacea ~ but may give you a small advantage)

all squared away... I'd have nothing against taking a flier on some small PAPER bets on this or that ('fun' money, so to speak)... As for me, I've become so sick of the system that there is no amount SMALL enough for francis_sawyer to call 'fun money'... I'd have more 'fun' with it betting on football games or giving it to strippers...

Mon, 08/27/2012 - 15:52 | Link to Comment NidStyles
NidStyles's picture

You do not "give" money to strippers, you make small transactions for her to rub her titties all over your face.

Mon, 08/27/2012 - 16:04 | Link to Comment NidStyles
NidStyles's picture

You do not "give" money to strippers, you make small transactions for her to rub her titties all over your face.

Mon, 08/27/2012 - 16:38 | Link to Comment vast-dom
vast-dom's picture

ergo it's an honest fair transaction vs. QE for the banksters to rape their muppets. but i saw some JPM jerkoffs at the strip club getting their faces rubbed by titties and we may infer it was taxpayer dollars for tips so QE to the strippers, right?

Mon, 08/27/2012 - 13:01 | Link to Comment vast-dom
vast-dom's picture

Dominique de Kevelioc de Bailleul: With the stock price of Morgan Stanley (NYSE:MS) inches from its Armageddon lows of Oct. 2008, whispers of the imminent overnight collapse of this U.S. broker-dealer begin to surface.  Client funds, again, are at risk.

“I’m hearing rumors that another major financial house is going to implode,” says TruNews host Rick Wiles.  In fact, the name I’ve been given is Morgan Stanley . . .

“It’s going to be put on the sacrificial alter by the financial elite.”

Beyond the evidence of a teetering stock price—Morgan Stanley’s troubles may never go away—leading to bankruptcy, if traders can glean anything from the financial activities of front-running insider George Soros, the man who warned in Jun. 2010 that the global financial crisis has entered “act II.”

According to Soros’ 13-F filing (ending Jun. 30) with the SEC, the billionaire financier reported that his fund sold nearly all shares of JP Morgan, Goldman Sachs and Citigroup—not paring back his holdings of financials, but completely dumping them.

And, as if to yell that the F.I.R.E economy is, indeed, on fire, the 82-year-old Soros also reports loading up on gold—adding a bit of poetry to Charlie Munger’s bizarre comment (1) in reference to investors who seek out gold in times of trouble.

Well, Soros’ act II has yet to crescendo to its tragic end, but “when a major global player with direct ties to the White House, Wall Street, and the banking system starts off-loading stocks and starts stacking gold, it suggests a very serious market move is set to happen,” says blogger Mac Slavo.

Adding to the speculation of a Morgan Stanley collapse, Bloomberg coincidentally pens an article on Aug. 23—the following day of the TruNews broadcast—in which the author Bradley Keoun recounts the dark days of Morgan Stanley at the height of act I of the financial crisis in 2008.

“At the peak of Morgan Stanley’s Fed borrowings, on Sept. 29, 2008, the firm reported that liquidity was ‘strong,’ without mentioning how dependent its cash stores had become on the government lifeline. . .” states Keoun.

“Neither Morgan Stanley nor its competitors in prime brokerage – Goldman Sachs Group Inc. (NYSE:GS), JPMorgan Chase & Co. (NYSE:JPM), Citigroup (NYSE:C) and Credit Suisse Group AG – disclose the size of their hedge-fund balances, leaving shareholders dependent on regulators who previously failed to rein in the risks. [Emphasis added]

But here’s where strong advice from Trends Research Institute founder Gerald Celente and former commodities broker Ann Barnhardt should be heeded.  Both consumer-friendly analysts implore investors and savers, alike, to withdraw from the financial system, warning that allocated brokerage accounts are not truly allocated. (2)

Bloomberg’s Keoun goes on to quote a former Financial Accounting Standard Board (F.A.S.B) member Adam Hurwich, who states, “It [Morgan Stanley's balance sheet] remains a black box,” referring to Morgan’s disclosure of whether allocated accounts at the firm have been re-hypothicated.

Regulators were asleep at the switch in the cases of MF Global and PFG Best, both filing bankruptcy post 2008, taking customer funds with them to the financial grave.  Why not Morgan Stanley?

“They don’t give you the information to be able to decipher whether they have changed anything,” adds Hurwich.

“Prime brokerage was presumed to be a pretty secure business, where the funding was not actually part of the liquidity of the bank,” Bloomberg quotes Frank Suozzo, president of FXS Capital LLC. “So if clients pulled their money out, the view was that money had not been lent out, so the cash would have been sitting there able to hand over. It turns out that that was not entirely correct.”

As the financial community found out in the case of MF Global, “prime brokers were able to reuse clients’ assets to raise cash for their own activities,” according to the financial crisis commission report, published Jan. 2011.

That’s a big red flag for investors to close their accounts with their brokerage firm—fast, especially accounts held at Morgan Stanley.

Why an establishment cheerleader such as Michael Bloomberg would allow an article which serves to remind investors of Morgan Stanley’s financial problems at this time may lend some credence to Rick Wile’s sources, who hear chatter about the impending doom of Morgan Stanley.

Like financial systems that could not be saved in the past, the banks must be then consolidated—that done, of course, after the bankruptcy, where the small investor gets wiped out and the ‘system’ acquires the remaining performing assets of the carcass.

The timing of the Bloomberg article is no coincidence.  Michael Bloomberg is only doing his part for the global banking cartel by tipping off that Morgan Stanley is ready for the “sacrificial alter.”  Get your money out.

(1) In early May, Munger told CNBC, “I think gold is a great thing to sow in to your garments if you’re a Jewish family in Vienna in 1939, but I think civilized people don’t buy gold.”  George Soros is a Jew, living in Hungary during the rise of the Third Reich.

(2) You can’t trust anybody and the entire system is collapsing.  What’s the takeaway from this?  It’s to make sure you have every penny in your pocket. —Gerald Celente, after losing 20 percent of his allocated brokerage account with MF Global.

“If you don’t understand what ‘get the hell out’ means, there’s not much I can do for you.” —Ann Barnhardt, after reviewing an appeals court ruling in the case of Sentinal Management Group, ruling that clients funds can be used to settle secured loans initiated through the banking industry.

Mon, 08/27/2012 - 13:07 | Link to Comment web bot
web bot's picture

Nice reporting on this.

Soros is the canary in the coal mine. Somethings coming.

Mon, 08/27/2012 - 13:22 | Link to Comment El Oregonian
El Oregonian's picture

"Soros is the Vulture in the coal mine. Somethings coming."

Fixed.

Mon, 08/27/2012 - 13:40 | Link to Comment web bot
web bot's picture

Ha ha - I agree! Nice one! +1

Mon, 08/27/2012 - 13:43 | Link to Comment CPL
CPL's picture

Well done.  Now get it to the news room!

Mon, 08/27/2012 - 13:44 | Link to Comment SmittyinLA
SmittyinLA's picture

LOL, read your brokerage agreements, I believe they ALL allow your custodian to play with your assets for free-(in not so few words). 

 

 

Mon, 08/27/2012 - 13:09 | Link to Comment vast-dom
vast-dom's picture

i was in the toilet when that happened and i forget to power up my algo sys darkwave x-a-rr fuck!

Mon, 08/27/2012 - 14:48 | Link to Comment ToNYC
ToNYC's picture

3/8 of a point on a 29 dollar stock is three 1/8 ticks. I remember shorting 4,000 GE and the infamous specialist would flash back the new offering a point higher after incessant statusing the order.

The only thing wrong with HFT is that it is a fraud since orders are entered without standing up two seconds for a human response. This is a human benefit transfer game or am I smoking crack with Bill Lee?

Mon, 08/27/2012 - 15:40 | Link to Comment vast-dom
vast-dom's picture

Bill Lee shot dope. And yes HFT is destructive to markets, if your definition of investing is to move capital around to productive entities in order to facilitate growth and hence returns. 

Mon, 08/27/2012 - 16:36 | Link to Comment max2205
max2205's picture

give me a ring when it moves 10 -20%...2% shit happens all the time now

Mon, 08/27/2012 - 15:13 | Link to Comment Stoploss
Stoploss's picture

I see a lot of BATSHIT in the chart!

Mon, 08/27/2012 - 15:21 | Link to Comment resurger
resurger's picture

I wonder if the order got filled in the first place

Mon, 08/27/2012 - 14:24 | Link to Comment Popo
Popo's picture

Seriously, you can't misspell "losers" and expect to have any credibility anywhere.  

Learn to spell "loser", you.... oh never mind.

Mon, 08/27/2012 - 21:06 | Link to Comment Curt W
Curt W's picture

His sister is looser, he is just a loser.

Mon, 08/27/2012 - 17:47 | Link to Comment Grinder74
Grinder74's picture

But can the bot spell O-I-H-O ?

Mon, 08/27/2012 - 12:47 | Link to Comment Boilermaker
Boilermaker's picture

Time to rape the corpse again!!

Mon, 08/27/2012 - 12:48 | Link to Comment Jack Napier
Jack Napier's picture

Would.you.like.to.play.a.game?

Mon, 08/27/2012 - 12:51 | Link to Comment sunaJ
sunaJ's picture

The only way to win is not to play.

Mon, 08/27/2012 - 13:10 | Link to Comment The Count
The Count's picture

Indeed, Watson. 

Mon, 08/27/2012 - 13:13 | Link to Comment Tim Knight from...
Tim Knight from Slope of Hope's picture

It's JOSHUA, remember. Oh, and if memory serves: "Strange game. The only winning move is not to play."

Mon, 08/27/2012 - 13:27 | Link to Comment mickeyman
mickeyman's picture

I'm pretty sure Janus has it right.

Mon, 08/27/2012 - 19:09 | Link to Comment ZeroAvatar
ZeroAvatar's picture

'Bot'o e Bot'o'.

Mon, 08/27/2012 - 13:26 | Link to Comment FeralSerf
FeralSerf's picture

If you breathe, eat and want to stay warm (or cool), you likely have no option of not playing The Big Game.   These market actions are just noise -- loud noise at times, but still just noise.

Mon, 08/27/2012 - 12:58 | Link to Comment El
El's picture

+1 If there is any justice in this world (and we all know there isn't much these days), these folks will get caught up in playing someone's personal SAW version of a game.

Mon, 08/27/2012 - 14:35 | Link to Comment my puppy for prez
my puppy for prez's picture

We are ALL victims/characters in a never-ending SAW movie!

Good analogy!

Mon, 08/27/2012 - 12:51 | Link to Comment LeisureSmith
LeisureSmith's picture

How about a nice game of chess?

Mon, 08/27/2012 - 12:53 | Link to Comment NorthPole
NorthPole's picture

Bitchez, bitchez!

Mon, 08/27/2012 - 15:59 | Link to Comment Pairadimes
Pairadimes's picture

Bidless, bitchez!

Mon, 08/27/2012 - 12:53 | Link to Comment Barack Obama
Barack Obama's picture

NANEX is unpatriotic. Reporting financial information that can be used by those who hate us for our freedoms is a threat to national security.

Mon, 08/27/2012 - 12:54 | Link to Comment ThisIsBob
ThisIsBob's picture

Can't see it on the 1 minute chart.

Mon, 08/27/2012 - 12:55 | Link to Comment Dr. Engali
Dr. Engali's picture

The Nanex didn't make those charts...

Mon, 08/27/2012 - 15:04 | Link to Comment amadeusb4
amadeusb4's picture

Repeating that is akin to having a booger hanging out your nose and your fly open. So, just an FYI, you have a giant booger hanging out your nose and your fly's open.

Mon, 08/27/2012 - 12:56 | Link to Comment El Oregonian
El Oregonian's picture

Overheard in the back office: Damn it! We need BIGGER AND BETTER BOTS!!!

Mon, 08/27/2012 - 12:59 | Link to Comment falak pema
falak pema's picture

The battle of Britain; is it a Spitfire or a Messerschmitt? 

You can see the fighter bot spiral down in its virtual smoke plume on your screens! 

Mon, 08/27/2012 - 12:58 | Link to Comment LeisureSmith
LeisureSmith's picture

Stanks the serial junking dog is out today.

Mon, 08/27/2012 - 12:58 | Link to Comment fonzannoon
fonzannoon's picture

Sorry I just can't get excited about a 40 cent drop in citigroup.

Mon, 08/27/2012 - 13:29 | Link to Comment SheepDog-One
SheepDog-One's picture

Yea, imagine if Citi actually dropped a mind-blowing 5 points some morning, total carnage if a .40 cent drop = over a billion.

Mon, 08/27/2012 - 13:54 | Link to Comment Fukushima Sam
Fukushima Sam's picture

The point is not so much the amount of the drop, but the speed in which it happened.  One-tenth of a second is pretty fast, especially if you are a human watching the market and trying to make decisions based on human timescales.

And what were the volumes to drive this drop in that one-tenth second timescale?  One party must have decided to exit a large position?

Mon, 08/27/2012 - 14:01 | Link to Comment fonzannoon
fonzannoon's picture

I am no expert on this but if one party exited a large position and they got, within a percent approx, the price they asked. That's a flash crash?

Mon, 08/27/2012 - 16:14 | Link to Comment Fukushima Sam
Fukushima Sam's picture

Great for the seller, perhaps not so great for the buyers.  But I guess that is their own problem, right?  But that leads to a breakdown of trust of the efficacy of the market to communicate information that a human can use to make decisions.  Which leads to broken markets, because markets are necessarily human enterprises.  Which leads to the point of the article.

Mon, 08/27/2012 - 12:59 | Link to Comment teahouse
teahouse's picture

Ron Paul Speech @ Tampa.

Financial Topic start around minutes 23

http://www.youtube.com/watch?feature=player_embedded&v=Sj-huXq_ts8

Mon, 08/27/2012 - 13:00 | Link to Comment daz
daz's picture

it's like a 4th dimension market inside of a market.

 

Mon, 08/27/2012 - 13:35 | Link to Comment CPL
CPL's picture

m-a-r-k-e-t-c-ep-t-i-o-n??

 

omg...<gasp> no.

Mon, 08/27/2012 - 13:01 | Link to Comment mrktwtch2
mrktwtch2's picture

we are the borg..resistance is futile..lol

Mon, 08/27/2012 - 13:23 | Link to Comment mick_richfield
mick_richfield's picture

assimilated accounts

Mon, 08/27/2012 - 13:16 | Link to Comment Jlmadyson
Jlmadyson's picture

Morgan Stanley blowing up?

Ugggh I wonder who has been saying that for ohhhhhhh so long.

WATCH YOUR MONEY.

Lehman 2.0 heh. Look out below. Rumors better better just be rumors or 08 will look like a cakewalk. The dominos would be catastrophic at this point in the game.

Mon, 08/27/2012 - 13:12 | Link to Comment Racer
Racer's picture

Must have been a few people that had stops/orders on C... the robots sniffed them out and killed them

Mon, 08/27/2012 - 13:15 | Link to Comment The Count
The Count's picture

The markets are now just as bogus as our two party system. Ron Paul was made to look like a loon from the get go by the MSM and the Tea Party was quickly assimilated by the Republican party. Everything so the rigged two party system continues. Same with the markets. The sheeple must not be allowed to leave the game or else there is nobody for the industry to milk. It's all an illusion, baby. So the markets must be proppeed up somehow or its Tilt (for those who still know what a real pinball machine is) 

 

Mon, 08/27/2012 - 13:14 | Link to Comment Joshua_D
Joshua_D's picture

Algobot Jox, coming to a theater near you.

Mon, 08/27/2012 - 13:18 | Link to Comment SheepDog-One
SheepDog-One's picture

Someone mustve sharted themselves over at Citi this morning big time.

 

Mon, 08/27/2012 - 13:18 | Link to Comment Hype Alert
Hype Alert's picture

When does this 'liquidity-providing' fiasco stop?

 

It doesn't.  It's the only game in town.

Mon, 08/27/2012 - 15:15 | Link to Comment Theosebes Goodfellow
Theosebes Goodfellow's picture

When the government "bubble" bursts. It's the last chapter of The Creature from Jekyll Island horror classic from 1910.

Mon, 08/27/2012 - 13:23 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

bullish

Mon, 08/27/2012 - 13:24 | Link to Comment Downtoolong
Downtoolong's picture

Can you imagine this chart getting reviewed on CNBC, and someone asking the simple question, who sold and who bought at the bottom?

The better question when this kind of shit happens is, why can't we see that?

Mon, 08/27/2012 - 15:05 | Link to Comment CCanuck
CCanuck's picture

See what???? Move along!!!!

TPTB

Mon, 08/27/2012 - 13:24 | Link to Comment SheepDog-One
SheepDog-One's picture

ZEE LEE QUEEEE DEEEE TEEEEE!!!

Mon, 08/27/2012 - 13:28 | Link to Comment savagegoose
savagegoose's picture

wall - dyne systems.

Mon, 08/27/2012 - 13:35 | Link to Comment Brazillionaire
Brazillionaire's picture

100 milliseconds? That seems slow. Hopefully, someone is on the problem.

Mon, 08/27/2012 - 13:45 | Link to Comment Conman
Conman's picture

C almost green - no problem nothing to see here , move along.

Mon, 08/27/2012 - 13:47 | Link to Comment Anasteus
Anasteus's picture

Does it mean they've lost two times more than Knight Rider? Great job, Tyler!

Mon, 08/27/2012 - 13:50 | Link to Comment JustanEmotion
JustanEmotion's picture

HFT porn

Mon, 08/27/2012 - 14:07 | Link to Comment TN Jed
TN Jed's picture

Why don't they just TELL us the price instead of this market charade.  Then CNBC can get back to quality programs like weed, hookers and scam artists.

Mon, 08/27/2012 - 14:17 | Link to Comment SWCroaker
SWCroaker's picture

Not to insult biker gangs, but these bots going at things unattended is like having the Hells Angels swoop around a corner, stop their bikes in front of your house, throw a wild raucous party where they trash everything in sight, and then hop on their bikes and leave.

HFT algos, wrecking the investing neighborhood one mini-crash at a time...

Mon, 08/27/2012 - 14:25 | Link to Comment Son of Loki
Son of Loki's picture

No problemo, friend.  The generous taxpaying Middle Class has their backs.

Mon, 08/27/2012 - 14:29 | Link to Comment q99x2
q99x2's picture

They must have run out of 401K for breakfast this morning.

Mon, 08/27/2012 - 14:31 | Link to Comment LarryDavis
LarryDavis's picture

Turn those machines back on

Mon, 08/27/2012 - 14:32 | Link to Comment diogeneslaertius
diogeneslaertius's picture

THE AMALGAMATION OF WEALTH AND CAPITAL

Mon, 08/27/2012 - 14:36 | Link to Comment vertexa
Mon, 08/27/2012 - 17:03 | Link to Comment Overflow-admin
Overflow-admin's picture

And is THIS a coincidence or is there a correlation?

Mon, 08/27/2012 - 17:32 | Link to Comment RmcAZ
RmcAZ's picture

Isn't that like $5?

Mon, 08/27/2012 - 14:42 | Link to Comment mammoth mo
mammoth mo's picture

The question is not whether citi is green or not.  The question is who got their stops whipped out.

 

 

Mon, 08/27/2012 - 14:45 | Link to Comment Mr_Wonderful
Mr_Wonderful's picture

Guizhou, one of China's poorest provinces, has said it will spend 3 trillion yuan on eco-tourism and creating a series of national parks.

http://www.telegraph.co.uk/finance/china-business/9500548/China-announce...

That´s like half a trillion dollars. I guess they´ll spend this kind of money over maybe 50 years, LOL.


Mon, 08/27/2012 - 14:53 | Link to Comment Sokhmate
Sokhmate's picture

When it goes bidless, it is not good bidness

Mon, 08/27/2012 - 14:54 | Link to Comment lincolnsteffens
lincolnsteffens's picture

I need a little help here. I've gotten most of the cash out of Merrill Lynch but I have shares in precious metals and mining stocks and a bit in start up oil and gas. also Central Canadian Fund and Sprott non allocated gold. 

Am I to understand that all of this could be at risk of vaporization or is it only the

cash portion which is supposed to be insured under Fed banking funds insurance?

Would appreciate anyone's comments.

 

Thanks

Mon, 08/27/2012 - 15:02 | Link to Comment Red Heeler
Red Heeler's picture

Member for 1 year and 43 weeks?

Mon, 08/27/2012 - 16:00 | Link to Comment Its_the_economy...
Its_the_economy_stupid's picture

He can't be for real.

Mon, 08/27/2012 - 15:02 | Link to Comment blunderdog
blunderdog's picture

Assume the worst, no matter what.

Mon, 08/27/2012 - 17:04 | Link to Comment GlomarHabu
GlomarHabu's picture

If you are going into precious metals why on earth would you not take the physical kind ..all you have is more paper..own the stuff, the physical gold coin, the silver bar,etc.

Mon, 08/27/2012 - 17:09 | Link to Comment lincolnsteffens
lincolnsteffens's picture

I do own the physical. Not a good idea to put it all in one basket. Have some overseas and near enough to get my hands on it if necessary.

I thought my owning stocks were held in my name and not accessible to a

brokerage house.? No?

Mon, 08/27/2012 - 17:50 | Link to Comment GlomarHabu
GlomarHabu's picture

near enough to get my hands on ???

Naturally the host country in a global meltdown will have bank doors wide open AND allow all who want to take their physical gold and silver out do so with no intervention ..... good plan.

BTW, how you gonna get there and back?

Mon, 08/27/2012 - 17:06 | Link to Comment SubjectivObject
SubjectivObject's picture

Got stock certificates in hand?

WonWerd: AIG .............. And It's Gone

Mon, 08/27/2012 - 15:04 | Link to Comment mammoth mo
mammoth mo's picture

Alright people we have some work to do.

Call up today's charts for Bank of America, Citigroup, JP Morgan, FAS, USB, WFC.

They seem to have a rolling ramp up. 

Wells Fargo begins at about 10:15.

USB and JPM at about 10:30

Bank of America 10:45

Citigroup about 11:00

The FAS starts ramping up right around the same time as BOA.

 

I'm guessing the FED pressed the print button (NSS).

The question is was it done in an order to make some in the know some quick cash.  Obvious answer is yes.

The unobvious answer is what is the pattern?  See one financial jump and jump on the next?

Mon, 08/27/2012 - 15:10 | Link to Comment sailfrog
sailfrog's picture

This just in:

Selling pressure soaks up bids and moves stock price. More at 11.

Also new discoveries suggest putting water on things makes them wet.

Tune in after the game for all the news.

Mon, 08/27/2012 - 15:20 | Link to Comment ekm
ekm's picture

This is exactly what I'm saying. There is a constant bid on anything, only the government is capable of organizing that by using trading desks of primary dealers.

There may be glitches like this, but it is continuing.

 

Theoretically it may go on until most of market is owned by Primary Dealers and there is nothing left to trade.

Based on what I've read, that's what happened in 2008 before the crash. No suckers showed up until Primary Dealers ended up owning most of the market. Hence Bear Stearns and Lehman had to be sacrificed onto the altar of Volume and JPM managing to scoop Bear Stearns and $2/share.

Mon, 08/27/2012 - 15:58 | Link to Comment Its_the_economy...
Its_the_economy_stupid's picture

The retail investor is gone. The market principles now must devour one another.

Popcorn please.

Mon, 08/27/2012 - 16:09 | Link to Comment ekm
ekm's picture

Exaaaaaaaaactly.

Mon, 08/27/2012 - 17:00 | Link to Comment GlomarHabu
GlomarHabu's picture

Correct ... in fact almost the entire middle class in this country has evaporated ......  remember twenty years ago when every WS firm had commercials on TV.  I've taken a year off of watching TV but I'd bet very, very few are doing any advertising. They know they've huckstered as much money out of Joe Sixpack that they can so now their only salvation is a security blanket provided by their friends on The Hill and at 1600.

Mon, 08/27/2012 - 18:15 | Link to Comment ekm
ekm's picture

Impressive resume.

I am interested in your points of view. Please comment as much as you can.

Mon, 08/27/2012 - 15:38 | Link to Comment PontifexMaximus
PontifexMaximus's picture

Again, election ahead, don't you worry, God's hand will be in the market, move on!

Mon, 08/27/2012 - 15:53 | Link to Comment HungrySeagull
HungrySeagull's picture

So... C does nothing and still lose a coin.

 

What happens when there is absolutely no volume and the HFT's crash the market to generate movement to comply with thier single minded programming order.

Mon, 08/27/2012 - 18:02 | Link to Comment Darkness
Darkness's picture

Mate, WTF. 

Mon, 08/27/2012 - 18:17 | Link to Comment Radical Marijuana
Radical Marijuana's picture

I turn off the computer for 12 hours, and more than a dozen good new articles appear on ZeroHedge ... more than I could possibly have time to read!

The old science fiction stories were based on the idea that the military would develop computers that took humans out of the loop. However, it has turned out that the money system was automated, and took humans out of the loop, before the military system did!

Those are combined money/murder systems: global electronic fiat money frauds, backed up by nothing but the threat of atomic weapons, all of which are astronomically amplified by many orders of magnitude.

My little summary, off the cuff, of how this happened ...

In the 1980s the first computer program was made to vacuum up all the nickles and dimes all over the world, and that made billions of dollars, until the collapse of the Soviet Union spun that program out of control, and it lost some billions.

Back to the drawing board, the biggest banks have been hiring all of the brightest mathematicians, and computer experts, to improve their machines' high frequency trading.  Some legal regulations had to be gotten out of the way, for those systems to really take off, or at least, the threat of any actual enforcement of those rules had to be diminished to practically zero, until these computers could really start to fight each other

It is like some Star Wars metaphor, except the knights in shining armour, with light swords, doing battle, are the HFT computers.  One has to stretch the metaphors to try to imagine what is going on!!!  Electrified beasts are doing battle, like a video game, EXCEPT, the price of food and fuel for everyone depends on the outcomes of their battles!

After the mathematical computing powers were advanced enough, and the pesky limits of laws, or of the actual potential enforcement of the laws were gotten rid of, then, during the last five years, the automatic, computer controlled, high frequency trading has been developing at an exponential rate.

There are lots of good charts that demonstrate how that picked up speed in the last five years, e.g.:

http://www.nanex.net/aqck/2804.HTML

Also referred to in many other articles as

"Chart of the day HFT edition" ... which shows us the system, in real time, during the last five years, leaving human beings behind in the dust!

No human being can possibly keep up with the news of the day! But nevertheless, the price of their food, and fuel, and practically everything else, is more and more being controlled by computers trading with each other!

Another basic science fiction theme was that these computers are being fed psychotic instructions, because they are arising in a psychotic systems, based on lies, backed by violence, that refuses admit that, and certainly can not escape by being able to jump up any levels, and laugh through themselves, through understanding their own absurdities, at a higher levels of consciousness.

As in HAL in the 2001 Space Odyssey movie, these computers are the ultimate expression of GI/GO, garbage in, garbage out!

The old-fashioned fraud and force systems are being pumped up many orders of magnitude.  I used to say billions, then I had to start saying trillions, and recently, I started saying quadrillions of times!

Fraud and force, dishonesty and violence, running organized systems of lies and robbery, have been turned over to automated electronic systems, which are backed up by weapons of mass destruction.

However, in our Bizarro Mirror World, it was NOT the computers controlling the weapons of mass destruction, the hardware in the murder systems, that took over first, but rather, the computers controlling the software, in the money systems, that have taken over first.

Still, all the basic science fiction ideas are becoming facts, faster than anyone, including me, ever imagined was possible!

Mon, 08/27/2012 - 21:35 | Link to Comment Slightly Insane
Slightly Insane's picture

At that rate, 10 minutes would be all that is needed to "re-set".  Let's go.  Hit the "red button".  I can't remember if it was the "red" pill or the "blue" one?  I think I'll take the snickers bar instead .... no pills for me.

I'ld stand away from the high rises, as the bodies will be falling from the sky, like mannah from heaven.

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