It appears that Wall Street is so rigged that Las Vegas looks honest and fair in comparison. Consider the latest study.
A quarter of all public company deals may involve some kind of insider trading, according to the study by two professors at the Stern School of Business at New York University and one professor from McGill University. The study, perhaps the most detailed and exhaustive of its kind, examined hundreds of transactions from 1996 through the end of 2012.It's becoming more and more obvious that what is being sold to us as "capitalism" is nothing more than an insider scam.
The professors are so confident in their findings of pervasive insider trading that they determined statistically that the odds of the trading “arising out of chance” were “about three in a trillion.” (It’s easier, in other words, to hit the lottery.)
The S.E.C. and the Justice Department have publicly made prosecuting insider trading a priority...It's not a surprise that the SEC doesn't see any illegalities. Consider U.S. Securities and Exchange Commission Chair Mary Jo White while testifying before Congress recently was asked about Michael Lewis' new book about high-frequency trading markets.
But, the professors conclude, the Securities and Exchange Commission litigated only “about 4.7 percent of the 1,859 M.&A. deals included in our sample.”
"The markets are not rigged," she told a U.S. House of Representatives panel. "The U.S. markets are the strongest and most reliable in the world."Well that's certainly a relief. I was worried for a moment.
Normally you might think that when someone gets between you and the exchange in order to buy or sell in anticipation of your trade, it would be considered either front-running or insider-trading. But Mary Jo White says that it isn't, so it must not be. Consider how the SEC has approached the issue.
“I think you really do want to do a soup-to-nuts review,” says White, who stresses that any study will begin with the presumption that “the markets are not rigged.”When you start off an investigation with the assumption that something doesn't exist, and you don't find it, then the investigation is a success.
Of course the Wall Street mouthpiece, CNBC, has jumped at the chance to defend their masters. But I'm betting that you haven't guessed what sort of "logic" they are using to defend insider trading.
As insider trading is clearly already pervasive, and a significant use of time and resources, I think it's time to finally legalize insider trading.Wow! They don't even deny the rigging. Since everyone breaks the law and rips off the little guy, we may as well make it legal.
You know, I kinda agree with him. If they put up a big sign and say "this game is rigged" then you won't feel very sorry for people who complain they were robbed.
This defense of blatant illegalities is slightly different from their defense of high-frequency trading, when they said "No one has been a bigger beneficiary of high-frequency trading than the so-called little guy."
The market rigging is so pervasive, that it's almost impossible to put all of it into one diary.
At this point it really requires imagination to call our current system "capitalism", because capitalism requires some sort of level playing field to work, and that isn't what we have.
(Reuters) - Retail equities investors have put stock trading on hold as they wait for more certainty about the economic recovery and more volatility that can translate into trading profits, the head of TD Ameritrade Holding Corp said on Wednesday.Ladies and gentlemen of the court, I would like to present to you exhibit A: TD Ameritrade CEO telling us that the retail investors aren't trading these days.
"The market is pretty dead," TD Ameritrade Chief Executive Fred Tomczyk said at Sandler O'Neill & Partners' global exchange and brokerage conference on Wednesday.
Now I present to you exhibit B: testimony at the Senate from yeterday by another Ameritrade executive, Steven Quirk.
But Mr. Levin pointed to different data from the first quarter of this year that showed that TD Ameritrade routed its nonmarketable orders to two markets that paid the highest rebates available. “So, again, your subjective judgment as to which market provided best execution for tens of millions of customer orders virtually always led you to route orders to the markets that paid you the most?” Mr. Levin asked.Virtually always.
“No, not always led us …” Mr. Quirk began.
“I said ‘virtually always,’ ” Mr. Levin responded.
After a short pause, Mr. Quirk said, “Virtually, yeah.”
And who pays the highest rebates to Ameritrade? High-frequency traders.
Or to put it another way: Ameritrade is feeding their small retail customers to the Wall Street lions.
And with that ladies and gentlemen, I rest my case.