"I write out of concern that the integrity of our capital markets is being compromised by the ability of some insiders to view order information before it is available to the entire market, and use electronic trading strategies to profit from that information at the expense of other investors."
Full letter here:
Schumer Letter
Irene, I would love to get a copy of your book. Are you willing to exchange one Digital Dickweed coffee mug for a few hundred copies? I am sure you have them lying around, and it sounds about equitable.
Also, good thing of Irene to admit that any variant of forntrunning is illegal. We are with you!
This is so much more than just a short covering rally. Oh wait, it's not. 72.19% drop in Short Interest across securities, compliments of stock loan-cum-TARP bailout recipients. So you see, if you are a taxpayer, who believes that fundamentals are more critical than an artificially inflated market compliments of the biggest, most orchestrated short squeeze in history, you got Got by the same people you bailed out.
Update: Apparently Bberg had not completed filling its data at time of posting. We apologize for Bloomberg not having the perspicacity and alacrity of a 10 million SPARC turbo cluster. The end result: 21.05 billion shares short at 1.72% of float. The odd discrepancy is the increase in short-interest on NYSE-issued securities. Any readers who have an idea what is going on here, please chime in.
Nonetheless, below is the trend chart for the % of float as most recently reported by Bloomberg. If this data changes in 24 hours, an update will be posted.
hat tip JB
hat tip JB
This one falls into the category of one picture is worth a thousand optimistic promises. Original source compliments of Out of The Frying Pan (and Innocent Bystanders.)
Great recap piece in the New York Times on whether or not Wall Street is picking the pockets of "non-club" investors (read - the guys who do not generate 80% returns with a Sharpe > 5.0 - can someone explain how risk/return works again). The consensus sure looks good for class action lawsuit lawyers.
The piece also recognizes the tremendous contribution that Zero Hedge's readership has had in this ongoing debate, once more highlighting the interactive nature of new media and how crowdsourcing is the new dominant paradigm for Media 2.0.
Here is the link.
Even the New York Stock Exchange itself is acknowledging the HFT media campaign.
For anybody new to the site, please check out the Zero Hedge glossary for all the relevant articles on specific topics.
Additionally, should it be odd that Direct Edge, the company in the eye of the Flash hurricane with its ELP program, has the following reported ownership structure:
Yes. Direct Edge is an independent broker-dealer owned by a consortium that includes the International Securities Exchange (?ISE"), Knight Capital Group, Inc., Citadel Derivatives Group, The Goldman Sachs Group, and J.P. Morgan. Knight Capital Group was originally the sole owner of Direct Edge and the firm was spun off in the third quarter of 2007 when Citadel and Goldman made investments. With a 31.54% stake, the ISE is currently the largest shareholder of Direct Edge, followed by Knight, Citadel, and Goldman, each with 19.9%.
And here are the latest ruminations out of Max Keiser, who takes on a curious angle in his most recent Goldman Sachs attack:
Zero Hedge recently had some choice words against a subset of HFT, namely Flash Trading, and as even Irene Aldridge confirmed earlier, there is something very wrong with this critical component of program trading. It seems our admonitions have not fallen on deaf ears. In a startling development of anti-establishmentarian activism, Senator Charles Schumer has asked the SEC to ban Flash Trading in its entirety, as it "gives high-speed traders an unfair advantage over other investors."
From Bloomberg:
Senator Charles Schumer asked the U.S. Securities and Exchange Commission to ban ?flash orders,? saying the transactions give high-speed traders an unfair advantage over other investors.
Nasdaq OMX Group Inc., Bats Exchange Inc. and Direct Edge Holdings Inc. hold these orders for milliseconds, giving their customers the opportunity to gauge demand before traders on other exchanges get the chance to bid, Schumer said in a letter to SEC Chairman Mary Schapiro. Brian Fallon, a spokesman at Schumer?s office, confirmed the authenticity of the letter.
?Flash orders allow certain members of these exchanges to obtain access to order flow information before that information is made available to the public,? Schumer wrote. That allows ?those members to use rapid trading programs to trade ahead of those orders and profit from advanced knowledge of buying and selling activity,? he added.
The implications of this development are immense: if politicians are willing to take a major chunk of out exchanges' primary revenue streams, one may even hope that they won't stop there but will in fact continue much higher in the food chain and start investigating the perpetrators of real market malfeasance.
It seems 1-2's and Marla's post earlier could not have come at a more opportune time. In a presentation by Andrew Gluck of Advisor Products, the author touches on some starkly comparable points (and, usefully, those with acute ADHD may find this presentation a tad more palatable, hehe, just kidding Marla) in the context of the epic paradigm shift occurring in the media world. Zero Hedge explicitly agrees that while the course of new media is still very much uncharted, the inherent conflicts of interest at the nexus of mainstream media and its providers of funding (not to mention bloated leverage and CDS levels in the 20pts upfront even in these artificially tight times), will make the survival of legacy media products increasingly more impossible.
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