That’s what they are, that’s the only way they have made billions of dollars. They cheat. Read this most fascinating account of how they do it.
The rise of high-frequency trading helps explain why activity on the nation’s stock exchanges has exploded. Average daily volume has soared by 164 percent since 2005, according to data from NYSE. Although precise figures are elusive, stock exchanges say that a handful of high-frequency traders now account for a more than half of all trades. To understand this high-speed world, consider what happened when slow-moving traders went up against high-frequency robots earlier this month, and ended up handing spoils to lightning-fast computers.
It was July 15, and Intel, the computer chip giant, had reporting robust earnings the night before. Some investors, smelling opportunity, set out to buy shares in the semiconductor company Broadcom. (Their activities were described by an investor at a major Wall Street firm who spoke on the condition of anonymity to protect his job.) The slower traders faced a quandary: If they sought to buy a large number of shares at once, they would tip their hand and risk driving up Broadcom’s price. So, as is often the case on Wall Street, they divided their orders into dozens of small batches, hoping to cover their tracks. One second after the market opened, shares of Broadcom started changing hands at $26.20.
The slower traders began issuing buy orders. But rather than being shown to all potential sellers at the same time, some of those orders were most likely routed to a collection of high-frequency traders for just 30 milliseconds — 0.03 seconds — in what are known as flash orders. 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.
In less than half a second, high-frequency traders gained a valuable insight: the hunger for Broadcom was growing. Their computers began buying up Broadcom shares and then reselling them to the slower investors at higher prices. The overall price of Broadcom began to rise.
Soon, thousands of orders began flooding the markets as high-frequency software went into high gear. Automatic programs began issuing and canceling tiny orders within milliseconds to determine how much the slower traders were willing to pay. The high-frequency computers quickly determined that some investors’ upper limit was $26.40. The price shot to $26.39, and high-frequency programs began offering to sell hundreds of thousands of shares.
The result is that the slower-moving investors paid $1.4 million for about 56,000 shares, or $7,800 more than if they had been able to move as quickly as the high-frequency traders.
Multiply such trades across thousands of stocks a day, and the profits are substantial. High-frequency traders generated about $21 billion in profits last year, the Tabb Group, a research firm, estimates.
“You want to encourage innovation, and you want to reward companies that have invested in technology and ideas that make the markets more efficient,” said Andrew M. Brooks, head of United States equity trading at T. Rowe Price, a mutual fund and investment company that often competes with and uses high-frequency techniques. “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.”
Yeah, cheating usually does harm the integrity of the market, just as badly as steroids harms the integrity of baseball. So the only reason why Goldman Sachs has made so many billions in the last quarter is because they have a super-fast computer housed in their building that trades for them before anyone else really has any chance to get in. And see, it doesn’t really matter if you’ve got the natural ability and skills to smell a profit, because you, as a human being, are simply not fast enough to keep up with a super computer. You’re out of the game. The price is manipulated against you, so that Goldman Sachs makes the profit you would have made.
And here I was thinking I was finally getting to understand how the stock market really worked, and I learned the game was up anyways because the ruler of Wall Street, Goldman Sachs cheats anyways. Who wants to play with them?
Talk about not getting it. Palestinians, angry at the commercial, tested the theory in reality. This is what you actually get when a Palestinian kicks a soccer ball over to Israeli soldiers:
Executives and other highly compensated employees now receive more than one-third of all pay in the U.S., according to a Wall Street Journal analysis of Social Security Administration data — without counting billions of dollars more in pay that remains off federal radar screens that measure wages and salaries. Highly paid employees received nearly $2.1 trillion of the $6.4 trillion in total U.S. pay in 2007, the latest figures available. The compensation numbers don’t include incentive stock options, unexercised stock options, unvested restricted stock units and certain benefits.
So to the 300 million other Americans out there, you’ve gotta split up $4.3 trillion somehow while $2.1 trillion goes to the top 3 million Americans. Got a problem with that? Tough. Go to Canada.
And where are most teens pregnant? In the religious South of course.
More of this please. Let the Republican party be known as this lunatic and crazy. Let it sink further into oblivion and destitution. No one will shed a tear.
Brad DeLong has some cool graphs on debt to GDP ratios. Here are two of interest:
Let them truly be an independent nation-state, and then let’s see if they keep the same belligerent stand.
Read it all. The conclusion is this: Abu Zubaydah was cooperating with the FBI using its finely honed skills at interrogation. When Jessen and Mitchell showed up with the CIA and started abusing Zubaydah, he clammed up, as any rational human being would when mistreated. Then they upped the torture, waterboarding 83 times in FIVE DAYS! What kind of sick fuck does this? Something is seriously warped in the minds of Jessen and Mitchell, the Mormon boys who ran SERE. They are two fucked up individuals. They need to be tried for their war crimes.
Good for them, and why the hell are American commanders so bothered by this? Why do they really want to keep staying in a country that clearly doesn’t want them around anymore? Can’t you guys read the writing on the wall?
It’s sad that it has come to this, that this is the way America will be leaving Iraq, through Iraq’s curt, missive dismissals, slowly choking our abilities to move around their country. But that is the price America pays for having killed so many Iraqis. It shouldn’t be such a surprise that Iraq really doesn’t like us right now. And there is absolutely nothing we can do about it right now except leave Iraq. We do not have any moral standing in that country. Not after the hundreds of thousands of civilians dead, the utterly reprehensible actions at Abu Ghraib.
Our actions in Iraq will haunt us for generations to come.
Today’s hypocrite? Governor Sanford. Here are the lurid details:
South Carolina Gov. Mark Sanford shed his fiscal conservatism on several taxpayer-funded international trips, including a South American jaunt that included time with his mistress, choosing expensive first-class or business-class seats while his aides sat in coach.
Sanford, who once criticized other state officials for costly travel, charged the state more than $37,600 for one first-class and four business-class flights overseas since November 2005, expense records show. Other state employees flew in the back of the plane at a fraction of the price, according to the documents.
The Republican governor, who balked at taking federal stimulus money after arguing it was an unwise use of taxpayer funds, charged the state $8,687 for a Delta Air Lines trip to Brazil last year that included a leg in business class, state expense records show.
This is the face of today’s fiscal conservatives.
Earlier I wrote a post about Growth and Taxes in which I shared this graph
Now, I found a graph from Matthew Yglesias that shows the wealth of the very rich
Note again, when the rich are at their richest, bubbles form. When they are not, sustainable growth occurs.
Once again, tax the rich. Tax them at 50%. Pay off our national debt. Stay close to, if not above, the budget on an annual, consistent basis. We’ll have sustainable, manageable growth. Otherwise, we’re just gonna oscillate wildly once again with bubbles and their constant bursting.
I continue to sense that the administration is putting too much weight on solving the conflict.
Uh… should we… er… should we not be putting much weight on solving the conflict? How many more people do you want to have killed Mr. Foxman? Why prolong the conflict?
Give it up for Media Matters having the guts to listen to this vile bile. This is what conservatives listen to EVERY DAY. Note in particular Glenn Beck. This is entertainment for conservatives? Let me tell you, I didn’t feel the Spirit listening to that. I felt complete hate. The world in which Glenn Beck, Rush Limbaugh, and the rest of them live really really sucks. It’s really really crappy. It certainly doesn’t embody what I expect from family-friendly, Christ-loving homes that they say they defend.
Look at that graph. Let’s talk about sustainable growth. Note some very interesting things about this graph. When did we have the most sustainable growth in American history? From the 1930s to the 1980s. Where did we have bubbles? The 1920s and the 1990s-2000s. Where did we have a massive difference and disparity between the income of the very wealthy and everyone else? The 1920s and the 1990s-2000s.
When the tax rates on the very rich are low, bubbles form, creating artificial growth that is not only unsustainable but destructive to the rest of the economy. When the tax rates on the very rich are high, sustainable growth occurs where recessions are not as severe and not as destructive to the overall economy.
Tax the rich at high levels. It produces sustainable, manageable, long lasting economic growth. Lower taxes on the rich and you create huge bubbles of artificial growth that will inexorably lead to a massive downturn as the economy corrects itself.
Someone else wrote this op-ed for her, and she “approved this message,” branding it with her name.
Seriously, she can’t quit politics. She’s flipped off her own state, telling them they are no longer relevant for her, and now she wishes to get even more into the national scene. This op ed is dripping with hate for “liberals.”
The ironic beauty in this plan? Soon, even the most ardent liberal will understand supply-side economics.
I guess she’s not writing to try and convince liberals to listen to her. Her argument is simply to “drill baby drill.”
We must move in a new direction. We are ripe for economic growth and energy independence if we responsibly tap the resources that God created right underfoot on American soil. Just as important, we have more desire and ability to protect the environment than any foreign nation from which we purchase energy today.
That’s it. That’s all she has to offer, “drill baby drill.” Oh and “liberals suck.” That is the basic gist of her argument. Liberals suck, and we need to drill baby drill.
Of course, Alaska is not the sole source of American energy. Many states have abundant coal, whose technology is continuously making it into a cleaner energy source. Westerners literally sit on mountains of oil and gas, and every state can consider the possibility of nuclear energy.
Coal, oil, gas. Any renewable energy in those? Nope. Does she talk about renewable energy? Nope. Drill baby drill.
Can America produce more of its own energy through strategic investments that protect the environment, revive our economy and secure our nation?
Yes, we can. Just not with Barack Obama’s energy cap-and-tax plan.
Sadly, she offers nothing to answer this question. Drill baby drill does not help America produce more of its own energy that protects the environment, will revive our economy or secure the nation. No matter how much we stick with carbon energy, America simply does not have enough of it under its soil, and those dastardly Middle Eastern nations, and Venezuela and Russia, will continue to have more than we, thus, the more we continue staying with carbon energy, the more we are beholden to what those dictators say. Mrs. Palin simply does not have the capacity to consider other options. It is beyond her grasp to think outside the box. She has been very consistent that drilling is America’s only option.
So as one who leans with the liberals, I tell conservatives right now, please bring it on. More of this please. Let Sarah Palin speak for your party and ideology for the foreseeable future. Thank you.
Yes, in 2009, a Republican governs California to a point where the government has to give out IOUs to people they owe money.
Yes, in 1992, a Republican governs California to a point where the government has to give out IOUs to people they owe money.
Yes, in the Great Depression, a Republican governs California to a point where the government has to give out IOUs to people they owe money.
Notice a pattern? Notice a trend?
About 4,000 troops — most of them U.S. Marines — descended upon Nawa and other towns along the lower Helmand River valley 10 days ago in a massive operation to root out the Taliban. Their aim is to combat the insurgency in a new way: Instead of targeting extremist strongholds, they will aim to protect communities from the Taliban.
I mean, DUH! It’s written in the military’s own counterinsurgency field manual: PROTECT THE FUCKING CIVILIANS!