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Home“If You Think Flash Boys Was Explosive, In Bed with Wall Street Is Downright Nuclear”
Posted by Larry Doyle on May 12th, 2014 10:50 AM |
While many in and around Wall Street and Washington have been either dismissive or silent on the issues Michael Lewis addresses in his book Flash Boys, a select few brave souls have issued a real siren call over the years.
Lewis pays respect to these ‘men in the arena’ who have shined a light on the less than pristine plumbing of our equity exchanges. Specifically on page 202 in a footnote, Lewis writes the following:
*Eric Hunsader, the founder of Nanex, a stock market data company, is a fantastic exception to the general silence on this subject. After the flash crash, it occurred to him to use his data to investigate what had gone wrong, and the search never really ended. “Almost every rock I overturn, something nefarious crawls out from under it,” he said. (more…)
HFT Exposed: Market Is Not Fair; Little Guy Loses
Posted by Larry Doyle on April 8th, 2014 8:53 AM |
Of all the questions on all the topics across all the market segments, the one that keeps being repeated by most investors — both institutional and retail alike — is the question regarding the fairness of the game.
That question and others were posed yesterday to James McCaughan who, as President of Principal Global Investors, just so happens to oversee the management of $300 billion and was interviewed by Tom Keene and Michael McKee on Bloomberg Surveillance.
Regarding market fairness in the midst of current high frequency trading practices, McCaughan does not equivocate in stating, “the market is not fair.” (more…)
Weekend Reading Re: Knight Capital and HFT
Posted by Larry Doyle on August 4th, 2012 7:09 AM |
Investors are constantly confronting the question whether it is safe to go in the water, that is, to commit capital and make an investment.
With so much concern already surrounding the structure of and practices within our equity exchanges, there was serious fuel added to these fires with the malfunction and accompanying meltdown at Knight Capital this week.
This story and situation deserve serious attention. To that end, when I want to know what goes on within the equity markets, I immediately go to the most reliable source. Who is that? Our resident Sense on Cents’ Hall of Famers Joe Saluzzi and Sal Arnuk at Themis Trading. What do these ‘men in the arena’ have to say about the Knight Capital debacle and the structure of the equity markets overall? (more…)
Trading Volumes Plummet, “Choose Not To Play”
Posted by Larry Doyle on March 9th, 2012 8:58 AM |
“The problem here is, when the public becomes aware of the nature of the game, they may choose not to play. This is the problem not only for Goldman but for Wall Street as a whole if people choose not to play.”
I made that statement in the midst of an interview two years ago with CNBC’s Mark Haines (may he rest in eternal peace) about Goldman Sachs. (For those interested you can access that interview here. My comments about Goldman specifically and this topic begin around the 3 minute mark.)
What have trading volumes done on the NYSE over the last two years? (more…)
Mortgage Settlement Pisses Into the Wind
Posted by Larry Doyle on February 12th, 2012 5:34 PM |
In a nation now all too familiar with a “too big to fail” banking system, a heavily manipulated and high frequency dominated equity market, and an incestuous financial regulatory system, we should not be surprised with a mortgage settlement that does little more than ‘piss into the wind’.
Pardon my cynicism, but one does not need to look too deeply into the recently announced mortgage settlement to understand there is little in the way of meaningful justice embedded in this contrivance. (more…)
Duncan Niederauer and “5 Guys Named Vinny”
Posted by Larry Doyle on January 9th, 2012 10:09 PM |
I had to chuckle yesterday morning when reading a comment that came in regarding my recent commentary on high frequency trading.
Eddie wrote,
Hi,
Plain and simple for years I was taught it was not only unethical but illegal to intentionally manipulate stock prices. The only intention of HFT is to do just this.Joe and Sal are correct when they say the people that are supposed to regulate this behavior are now in their pocket. For years the NYSE protected the Specialists and the public was assured that orders were being handled properly and the SEC audited the exchange and all of these firms quarterly. (more…)
Reason to Be Concerned About the Market
Posted by Larry Doyle on July 6th, 2011 8:12 AM |
It is a well known fact that an increasing percentage of daily trading volume in the equity markets is driven by high frequency traders. Whether you think that is a good or bad development is currently irrelevant. It is a reality.
That reality has clearly changed the nature of investing and assessing the markets.
How does one invest with a long term horizon when so much of the market is driven by short term traders? Very carefully.
Long term investing requires a solid understanding of fundamental analysis. In the midst of that endeavor, though, investors might want to have an appreciation for technical analysis, which can be utilized across an array of time segments but is very often applied for shorter time periods. (more…)
Lots of Laughs and ‘Sense on Cents’ With New York’s Bravest
Posted by Larry Doyle on September 14th, 2010 7:25 AM |
How often do we not remember what we did last week, while never forgetting the jokes told and the 3-putt greens in the midst of friends at a charitable golf outing? I was fortunate yesterday to play in a local charity golf outing with some of New York’s Bravest. While the funds raised were not for the benefit of the NYFD itself, the fact that I was able to spend time in their company was awesome. Reminiscing about past golf outings while simultaneously making new memories which we can share in the coming years was spectacular.
As has happened in the past, and given that this outing occurs shortly after 9-11, our conversation included recollections of that fateful day. The depth of their feelings and memories of so many lost friends and fallen comrades are truly palpable. May we never forget. I am not writing today to rekindle those memories, but I do feel compelled to pay respect to all those members of the NYFD and NYPD who made the ultimate sacrifice that day.
While the best memories from a day like yesterday are from the interaction with The Bravest, other members of our respective groups are also top shelf and actively involved in the markets. While there is plenty that occurs on a golf course that is best left on the golf course, in the midst of lost balls and missed putts, there were plenty of comments and opinions on our markets and economy. While I lost my share of golf balls, I picked up plenty of insights including: (more…)
What Happens When Investors Lack Trust?
Posted by Larry Doyle on August 6th, 2010 1:05 PM |
Think the structure of the equity markets is broken? With the preponderance of equity volume now dominated by high frequency trading and true retail investors fleeing in droves, what do people think the chances are that we could experience another Flash Crash as we saw on May 6th?
Last evening, The Wall Street Journal ran an online poll on this topic in Legacy of the ‘Flash Crash.’ I have to admit, I was surprised by the results. Did you get concerned witnessing the 1000 point ‘whoosh’ in a very short time period on May 6th? An overwheming number of pollsters believe it can happen again.
With our computer-drive stock market, could a “flash crash’ happen again?
“You’re Playing with Sharks”
Posted by Larry Doyle on July 22nd, 2010 6:20 AM |
Is it safe to go in the water? In other words, is it safe to play in the markets under the current construct? Do small retail investors truly stand a chance against the ‘big boys’ on Wall Street running high powered algorithmic trading programs and assorted other high frequency trading mechanisms? Are fundamental traders being thrown around amidst the ‘high waves’ and ‘strong surf’ pounding the shore?
No doubt, the scene on Wall Street has changed dramatically over the years. The onslaught of high frequency trading complete with a wide array of ‘bait and tackle’ such as flash orders, dark pools, naked access, co-location, and much more make it extremely challenging — if not downright daunting — for those who believe they can navigate these waters with simple ‘rod and reel.’ (more…)
