What’s the Frequency, Kenneth?

Off the keyboard & microphone of RE

HFT

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Published on the Doomstead Diner on April 1, 2014

Discuss this article at the Podcast table inside the Diner

It does look like TSHTF in the world of HFT Algos Gone Wild in the last couple of days. Numerous large Pension funds have filed suit against the entire cartel of TBTF Banks over the rigging of the markets with HFT algorithms.

For the unfamiliar with this nonsense, I have done a short Rant as a primer to get yourself up to speed. Nothing you don;t know if you haven’t followed Zero Hedge the last few years, but the fact it is hitting the civil courts at least and the fact CNBC Pundits are getting all in a tizzy makes it a notable milestone in the collapse of this economic system.

The clearly agitated BATS CEO came out swinging, blasting Katsuyama and Lewis “Shame On You,” for apparently telling the truth of what occurs in the stock ‘market and letting everyone in on it’. The tension grows when he presses Katsuyama on whether he really believes it is rigged… who then erupts “I believe the markets are rigged.. and that you are a part of the rigging.” Then the gloves come off “you wanna do this, let’s do this!” and then it got worse (or better)…

A little snippet from the Rant here:

The latest Hoopla in the financial world is the recent exposure of rigging in the FOREX markets utilizing HFTs, or High Frequency Trading Algorithms. This is nothing really new of course, Zero Hedge has been highlighting the issues with HFTs for years, going back at least as far as the famous Flash Crash of 2010 in the pit of the S&P 500, with the famous call of the tape by Ben Lichtenstein.

Of course, that form of trading on the floor of the New York Stock Exchange has become pretty much an anachronism now, live Homo Sapiens don’t do the trading waving bundles of money or Stock Certificates at each other most of the time, computers just exchange quotes for buy and sell orders, at clock speeds measured in Nano-seconds.

Even if this was honest trading (which it is not for numerous reasons I will identify here as we go along), obviously the only people who can afford the Supercomputer time to be running this racket are the TBTF Banks and a few mega-large Hedge Funds. J6P individual Investor if he even really does exist anymore simply can’t compete at all in this type of Casino, so if you are betting this way you pretty much are just rolling the dice all the time, trying to out-guess what the folks running the Algos will do based on Newz pronouncements and other stupid variables. Nobody is trading here on the real WORTH of anything, mainly the TBTF banks are just trying to soak the “Muppets”, the backroom name for suckers still gambling their money in this market….

For the rest, listen to the latest Rant…

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