It started as your everyday hexagonal discussion on CNBC with the anchors up-in-arms over the fact that (shocker) some firms can pay for early access to critical economic data items. The disdain for the 'rich' was palpable as Bernstein, Sullivan, and then Cramer all exclaimed both their amazement and surprise that this was even possible. That was when Santelli stepped into the ring and explained - in what was a relatively well-behaved exclamation - that not only was the fact that early data releases were well-known to every real trader (as opposed to those who pretend for TV) but that the issue was absolutely not about 'early access' but about HFT. When we first brought the perils of HFT to the attention of the broader trading community in 2009 [5], it was the stuff of conspiracy theory - but now (as with many other things) it is conspiracy fact and in a few short minutes, Rick Santelli showed off his co-hosts ignorance of the real market and opened many new eyes to the damage that HFT can do in a market that is, well, anything but Reg-FD fair and balanced to all.
Sprinkle in some 'blame-the-rich' arguments, a few totally embarrassing proofs of Cramer/Bernstein's ignorance of trading reality, and Sullivan's desperately brave attempt to keep the entire thing from collapsing into a street fight and these few minutes are well worth the price of admission...
2:00 - "I have never heard of such a thing" - blah blah
5:20 - Santelli exclaims... "For years, subscribers could pay extra money for early access.." and so it begins
The extra 2 seconds that it gives the traders was not an issue until HFT - but now it enables thousands of transactions to take place before any human can hit the big green Booyah Buy button...