It's a beautiful thing (albeit a story about what may be the most horrific truth ever to emerge about U.S. equities markets) when Daily Kos scoops...hmmm....
almost the entire freakin' world on
the biggest financial ripoff in the history of mankind.
From the front page of tomorrow's NY Times, two-plus weeks behind a small trade magazine, Daily Kos, market guru Karl Denninger, and the Zero Hedge blog as well as a few verbs short, but anyone reading it will get the picture: "Traders Profit With Computers Set at High Speed."
Traders Profit With Computers Set at High Speed
By CHARLES DUHIGG
Published Online: July 23, 2009 In Print: July 24, 2009
...Powerful computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange...and, their detractors contend, reap billions at everyone else's expense.
These systems are so fast they can outsmart or outrun other investors, humans and computers alike...
--SNIP--
Nearly everyone on Wall Street is wondering how hedge funds and large banks like Goldman Sachs are making so much money so soon after the financial system nearly collapsed.
--SNIP--
And when a former Goldman Sachs programmer was accused this month of stealing secret computer codes -- software that a federal prosecutor said could "manipulate markets in unfair ways" -- it only added to the mystery. Goldman acknowledges that it profits from high-frequency trading, but disputes that it has an unfair advantage.
I don't want to reprint too much of this story, but in it former New York Stock Exchange CEO and Chair William Donaldson tells us that "...individual investors...are at a huge disadvantage."
High-frequency traders often confound other investors by issuing and then canceling orders almost simultaneously. Loopholes in market rules give high-speed investors an early glance at how others are trading. And their computers can essentially bully slower investors into giving up profits -- and then disappear before anyone even knows they were there.
That's called "frontrunning." Go look it up. Where the hell are the indictments?
...While markets are supposed to ensure transparency by showing orders to everyone simultaneously, a loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee...
That's called "frontrunning." Stop beating around the (Wall Street) Bush. Where the hell are the indictments?
Per Andrew M. Brooks, head of United States equity trading at T. Rowe Price:
"But we're moving toward a two-tiered marketplace of the high-frequency arbitrage guys, and everyone else. People want to know they have a legitimate shot at getting a fair deal. Otherwise, the markets lose their integrity."
"Moving towards a two-tiered marketplace?" That train pulled out of the station years ago.
It's called frontrunning. It's grossly illegal. WHERE THE HELL ARE THE INDICTMENTS?
It's not a "two-tiered marketplace," it's a "two-tiered society!"
A line from "God Bless The Child," my all-time favorite song:
"...Them that's got shall get, them that's not shall lose..."
For more info on the biggest ripoff in the history of mankind:
On July 6th--"Breaking: FBI Arrest Opens Goldman-Sachs' Pandora's Box,"
On July 9th--"The Outrage Against Goldman-Sachs Builds,"
On July 11th--"DKos Diary Reverberates Throughout Wall St," and
On July 17th--"Krugman On "The Joy Of Sachs," As Frontrunning Truths Emerge."