On Friday Nanex released more images, this time of ABC High Dividend ETF (ABCS) taking the price from $21.75 to $50.21 and back, inside 13 milliseconds. What Nanex's charts show are the bids running as high as $542, twice. This fast paced activity will not even register on an everyday Direct Access Trading platform, such a TradeStation. What blew our mind is that the convexity of the bid run-up matched that of a similar algo that ran on October 27th, 2011 on Dollar Thrifty Auto Group (DTG). We've been told that HFT tighten spreads and have no effect on price volatility. That may be so but those times when the bad algo's go haywire, serious market inefficiencies are created along with federal guidelines being broken. This is an instance where it is clearly visible that this is the same program and we're curious if it will be back on April 27th, 2012 and who's bid will go north of $500?
Saturday, January 28, 2012
Friday, January 27, 2012
This Needs To Stop
As more people become aware of the bad algo's that cause problems in financial markets, the true information remains suppressed from our perspective. All too often someone with a CFA or MBA will come out who works at a bank or as a systems engineer and they will tell people that HFT make very little money, keep spread tights, provide liquidity, etc. Some HFT algo's do do that but they are incredibly out numbered by the bad algo's. Over the past two months or so there has been a marked increase in activity (plus a trader gaining unauthorized access to individual broker accounts and the FRBNY having their $9.5 million code stolen). We've seen test programs run that just shoot 10,000+ quotes and quickly withdraw from the market (this has coincided with the increase in foreign exchanges offering co-location, enriched data feeds, and low-latency platforms). We've highlighted where RIMM was blasted before CNBC decided to falsely hype a errant story about RIMM being sold to Samsung. Also, there have been instances where there has been constant blasting into stocks like Carbonite and Google. Just the day before we wrote that post we found empty blasts coming repeatedly on multiple exchanges as a form of dud munition testing. Exchanges have seen empty quotes being send to illiquid preferred shares in an effort from DDM's to maintain their quote quota levels. These guys are getting more risky as more and more people are mislead about the actions of the bad algo's and more and more headlines focus on shallow and hallow American Presidential circus.
Wednesday, January 25, 2012
How The Computers Handled The FOMC Minutes, FED's Interest Rate Forecast, and Bernanke's Conference
Being a FED day today it was interesting to see the computers reaction when the easily readable text of the FOMC meeting was released in contrast to their reaction to the Fed's first interest rate forecast. The computers have been easily prepared for the FOMC meeting minutes as the format is the same as usual. The biggest algo readings on HFT Alert came after the Chairsatan finished his conference.
FOMC Press Release And Live Feed For 2:15 Press Conference
The Federal Open Market Committee began their meeting yesterday and just issued their press release.The 2:00 Fed document release is below the FOMC Statement. Later this afternoon at 2:15 the Chairsatan will perform his dry routine, quivering voice and all, and you may view it live at the bottom of this page.
Czech National Bank Governor Highlights Shortfalls Of EFSF
Miroslav Singer is the Governor of the Czech National Bank. He gave a speech to members of the European Parliament yesterday and managed to show the EFSF for what it is, a unclear and unorganized facility destined to fail. During his speech Singer mentioned that some nations of Europe and their respective banking corps may run into liquidity problems that would not be easily solved by obtaining funds from the open market. He points out regarding the EFSF that, it is not clear what benefit we expect from the EFSF or how it is supposed to generate them. Many objectives have been hinted at in the more than 18 months since it was created, but nothing specific has been implemented so far. Continuing on with his speech which lays out the lack of progress being made by the moneychangers Singer talks about the sociopath nature of these bankers and how they promote the "do as I say not as I do" adage.
Tuesday, January 24, 2012
What Does Gerald Celente See?
Gerald Celente from Trends Research who was burned by Jon "I'm a scum" Corzine and then called for a run on the banks, is back again to talk about his experience and what he sees for the future from the US to Europe to China to Australia. No further comment required, a worthy read from one of the most well known figures to go unprotected by US segregated customer account laws.
Monday, January 23, 2012
HSBC Preferred Shares Smashed!
Mid day today HSBC Preferred shares took an onslaught from the HFT crowd. The goal? To use illiquid shares in an effort to beef up exchange quote quotas at the NBBO. For more on HFT, listen to this.
Sunday, January 22, 2012
Sovereign Default Immunity Under US Law
A couple weeks back we posted an Excel spreadsheet of Eligible Collateral for Repurchase Agreements at the Swiss National Bank. Since then there have been bits and pieces of information dribbling out that paint a picture of desperation that we all know Central Bankers have been displaying but is now visible in real terms. CC broke down the information and realized the Euro was by far the largest currency overall being pledged at the SNB in an effort to maintain their liquidity lines and make sure the Ponzi has the full support of other fiat currencies. Zero Hedge released the information on the Euro Short levels and it's no surprise that the next big worry will be the legal immunity that Central Banks have to defaults of their sovereign nations. The Europeans have tapped the FRBNY at the highest levels in 12 months and is should be more than evident that the full on blitz to "hide the debt" is becoming drastically worse each day. One key aspect for 2012 that isn't being talked about is what the secret central bank cabal is doing to make sure they are capitalizing on the litigation arbitrage, should the house of cards collapse sooner than expected and financial equillibrium achieved, what are the rights central banks have in legal judgements should a sovereign nation default?
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