High Frequency Trading
Open Thread ...
You can't make this stuff up!!!
It doesn't get more flagrant than this: the full HFT criminal monty exposed for all to see.
Biggest US Dark Pool Busted For Rigging Markets, Engaging In Precisely The Manipulation It Warned AgainstSubmitted by Tyler Durden on 08/11/2015 17:07 -0500
The WSJ reported that none other than the operator of the biggest dark pool in the US by volume, Credit Suisse and its massive Crossfinder dark pool, "is in talks with regulators to settle allegations of wrongdoing at its “dark pool” with a record fine in the high tens of millions of dollars, according to people familiar with the matter." What is grotesque about this story, is that back in December 2012, it was none other than Credit Suisse which conveniently explained and laid out all those forms of HFT manipulation which we accused virtually every HFT firm of employing since 2009... and which Credit Suisse itself is now accused of engaging in!
Just days after China bans Citadel (and its high frequency trading) from trading Chinese markets, US Treasury and Federal Reserve officials have been forced to admit they "need to consider whether the race for speed, at this already advanced stage, helps or hurts market functioning." As WSJ reports, Fed governor Jerome Powell and Antonio Weiss, a senior counselor to U.S. Treasury Secretary Jacob Lew, said Monday that the government should re-evaluate the structure of U.S. markets in light of recent events. They are growing more concerned about signs that financial markets have grown more volatile with the growth of fast trading. As Weiss concludes, "the constant pursuit to save one more millisecond not only consumes resources potentially better invested elsewhere, but increases the pressure on the plumbing of the system to handle ever-increasing speeds and messaging traffic." The pre-emptive blame-mongery is beginning...
- Unhappy Voters Shake Up Presidential Race (WSJ)
- China stock exchanges step up crackdown on short-selling (Reuters)
- China Dethroned as World’s Most Liquid Stock Market After Curbs (BBG)
- Xiaomi retakes the smartphone lead in China as Apple slips (Engadget)
- Impact of EPA’s Emissions Rule on Industry to Vary (WSJ)
- Citadel’s Ken Griffin Leaves 2008 Tumble Far Behind (WSJ)
- Greece says expects bailout deal by Aug 18 (Reuters)
Since the market is once again on the verge of a terminal liquidity seizure with its associated side-effects (see China for details), the authorities needed to remind the "market" just who the scapegoat will be when the next crash finally does come. Which is why earlier today in an unexpected "preliminary second quarter guidance" release, ITG, owner of the Posit dark pool, was just busted with a $22.6 million potential SEC settlement for what appears to have been blatant frontrunning of company clients in its own prop trading pod. But what is particularly amusing in this case is that while everyone knows that when it comes to HFT's, it is never called "rigging" - the proper nomenclature is "glitch", so now we learn a new term to use instead of "criminal frontrunning" - drumroll... trading experiment,
Over the last five-plus years in regard to today’s financial markets, the most revered memes that are recited in unison whether it’s in the form of a silent prayer or, it’s done in a near backwoods revival fashion from the televised financial shows “pulpit” in a “Can I get an …. !!!” stylized homily are: “It’s different this time!” followed with “The Fed’s got you’re back.” However, what they mean today may find those that put all their “faith” into such dogma finding that faith severely tested. For as of today July, 26, 2015 It truly is – different this time. And what else is different is: the Fed. may indeed have one’s back. Only problem this time is – that back may no longer be “yours.”
The pantsuit revolutionary is at it again. Once again demonstrating her populist chops by employing the services of lobbyists to bundle millions in campaign funds. It’s no wonder opinion polls on her have been plunging as of late.
The real reason why retail investors weren't impacted by the NYSE's halt is a hard truth... to retail investors, the NYSE is always dark
Where Do Retail Investor Orders Go? The simple answer: to the highest contracted bidder. Stock "wholesalers" or internalizers like Citadel or Knight pay retail brokers lots of cash to execute retail trades, essentially creating a "third market". Why? Because in a high frequency trading world, where stock prices have never been more fuzzy to the end user, but crystal clear to those that spend enormous sums on colocation and PhD employees, it's never been easier to print money (not unlike Bernie Madoff's scheme in the 90's). But that is the subject of a much, much longer story. Someone should write a book.
One of the most entertaining angles of the imperial spectacle known as the 2016 U.S. Presidential campaign, has been watching Hillary Clinton, the consummate insider, pretend to be an outsider. The fact that anyone eats this up is a testament to the epic stupidity and ignorance of the American public.
But... but... they just provide liquidity.
On Thursday this past week there were a few attempts at crisis management that should go into textbooks (as well as history books) everywhere in years to come as: Crisis Management 101.a – Lessons in Ineptitude. The responses as to settle the angst in an ever-more-skeptical, as well as frightened investing class was not only inane as demonstrated by the responses (or better yet; lack there of) given at the NYSE by way of “answering” as to why it halted its operation for nearly 4 hours. Was only outdone by what many view as the near insane when one views the steps taken in China to “calm” their markets. Is that how one instills confidence? It instills something – however the term isn’t anything resembling “confidence.”
Over the course of the last few years one thing that has been prevalent more than nearly any other time we can recall is just how many so-called "experts" have lined up to proclaim how their prognostications "were surely sound." The rationale? They must be correct in all their assumptions for – "Just look at these markets!" Well suddenly when one looks at these markets – it's not for the reasons the "experts" wanted. Now it's: "What in the world is going on in these markets!?"
We are running dangerously low on "conspiracy theories"