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HomeSense on Cents Commends JP Morgan for Standing Up for Long-Term Investors
Posted by Larry Doyle on July 15th, 2010 1:24 PM |
Why are investors increasingly less comfortable putting capital to work in the market? Why are investors increasingly less confident in the very structure of the marketplace itself? The simple fact is the supposed technological advancements embedded in high frequency trading have come with very real costs for long-term investors. The biggest advocate for investors in addressing these real costs has been Themis Trading’s Joe Saluzzi. I interviewed Joe twice over the last year and have referenced his work often. I commend Joe for often being the lone wolf within the industry crying out on these critically important issues.
Well, Joe now has company in the form of a very, very, very large wolf. Who might that be? None other than JP Morgan. Thanks very much to a regular reader of Sense on Cents for pointing out a story, JP Morgan’s Views On The Five Best Things About the Flash Crash, that ran yesterday at the fabulous site Zero Hedge. (more…)
Financial Times Highlights Great American Joe Saluzzi
Posted by Larry Doyle on May 26th, 2010 12:31 PM |
Confidence in the markets and the economy is ultimately a function of truth, transparency, and integrity.
The reason global investors have such little confidence currently is due to the very simple fact that both the financial industry and their government counterparts have not promoted practices which embrace these cherished principles.
That is not to say that each and every individual in the financial industry or in government does not try to promote these values. In fact, I believe the overwhelming majority of people on Wall Street and in the global markets do embrace these values, but they are not in a position to speak out when the principles are violated. I love it when I come across people who possess the courage and are unencumbered to speak out for the truth, transparency, and integrity our markets, our country, and our world so badly need. Like who? (more…)
No Quarter Radio’s Sense on Cents Welcomes Back Joe Saluzzi
Posted by Larry Doyle on May 22nd, 2010 10:00 AM |
UPDATE: This episode of NQR’s Sense on Cents with Larry Doyle has concluded. You can listen to a recording of the episode in its entirety by clicking the play button on the audio player provided below. Once the audio begins, you can advance or rewind to any portion of the episode by clicking at any point along the play bar.
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What really happened in the markets on Thursday May 6th? Can regulators truly address the underlying issues that caused the ‘flash crash’ or are our equity exchanges fundamentally and structurally broken?
How can you protect yourself in the face of such unbelievable volatility? Who benefits and who loses in the face of this volatility?
Will circuit breakers proposed by regulators work? Will we witness more days like May 6th?
If you have any interest in our markets and our economy, you will not want to miss my show this Sunday evening from 8-9pm ET as No Quarter Radio’s Sense on Cents with Larry Doyle Welcomes Back Joe Saluzzi. >>>> (more…)
Joe Saluzzi Exposes ‘Theft on Wall Street’
Posted by Larry Doyle on May 14th, 2010 9:17 AM |
Themis Trading’s Joe Saluzzi was designated a Sense on Cents Hall of Fame medalist this past January. Mr. Saluzzi has once again distinguished himself by providing a significant degree of transparency into the technical structures of our seriously flawed equity exchanges.
A recently released white paper, Exchanges and Data Feeds: Data Theft on Wall Street,written by Joe and his colleague Sal Arnuk at Themis Trading is getting a LOT of attention on Wall Street and in Washington. I welcome highlighting and bringing this 3-page paper to Main Street. If you have any interest in the markets and our economy, this paper is a MUST read. Allow me to whet your appetite: (more…)
From the Archives: High Frequency Trading Debate: Mano a Mano
Posted by Larry Doyle on May 7th, 2010 2:44 PM |
In light of the structural problems displayed in the market yesterday, I believe it is timely to repost a commentary from last July:
In the spirit of continuing the dialogue on high frequency program trading, please view this ‘mano a mano’ debate on CNBC.
In one corner is Joe Saluzzi of Themis Trading. In the other is Irene Aldrige, Managing Partner of Able Alpha Trading.
Mr. Saluzzi initially exposed this activity to the public in late June. Irene views this trading activity as a natural evolution of modern technology.
Please let me know how you score “the fight.”
Additionally, for those interested in further pursuing information on structural issues in the marketplace related to high frequency trading, here is a link to my Review of Sense on Cents Interview with Joe Saluzzi on High Frequency Trading from last August.
LD
A Windfall Profit Tax for Wall Street?
Posted by Larry Doyle on January 12th, 2010 8:42 AM |
The American taxpayer bailed out Wall Street. How does Wall Street return the favor and refund the American taxpayer? Why is Washington pursuing this topic now? The Washington establishment feels the beating pulse of rage from the American public.
I guess it would have been too much to expect the Washington crowd to proactively address the topic of repayment from its incestuous partners on Wall Street. In fact, we should expect to hear the Wall Street establishment bellow that they have paid back the TARP funds and that should be sufficient. Wall Street should not be so naive. The American taxpayer bailed out the entire industry as much as it bailed out any single specific firm. Washington should not be so cute in structuring a repayment program where the costs are conveniently passed along to the American public. American taxpayers should not be easily placated. (more…)
Shedding Light on Dark Pools
Posted by Larry Doyle on October 20th, 2009 4:17 PM |
Kudos to Joe Saluzzi once again. While a number of people in the markets have been pushing for increased oversight of high frequency trading, in my opinion, nobody deserves more credit than Joe Saluzzi of Themis Trading. The pressure initiated by Joe and pushed by others is starting to bear real results. How so?
The highly predatory nature of ‘flash orders’ will likely be discontinued. Now we learn that trading activity in dark pools will also likely be seriously restricted. What are dark pools? Why should you care? If you have an interest in the markets, you should care. Let’s navigate.
I was honored to have Joe join me on August 2nd on No Quarter Radio’s Sense on Cents with Larry Doyle. From my review of that interview, we learned that dark pools have developed in the following manner:
– Originally launched by one or two exchanges for the purpose of allowing major money managers to cross large blocks of stock ‘off the floor’ and thus protect the buyers and sellers identities and the price of the transaction
– Now every dealer and exchange have developed dark pools resulting in more and more business occurring off exchanges and without any benefit of transparency. Who is disadvantged? Those without access to the dark pools.
– Dark pools initially had minimum size orders, but many dark pools have increasingly shifted away from a size requirement.
– Dark pools have developed in such a way that some market participants will abuse the intended purpose of the facility, that is to transact, and instead will look to discover information on pending orders through these dark pools. (more…)
High Frequency Trading: Point-Counterpoint
Posted by Larry Doyle on July 17th, 2009 6:12 PM |
High frequency trading activity has become a very hot topic both on and off Wall Street. My trading instincts tell me that this activity is not productive for the long term health and well being of the market. I have referenced the work of Joe Saluzzi and his colleagues at Themis Trading in making the case for the prosecution.
In an attempt to present a case for the defense, I searched and found commentary written by Sang Lee, managing partner at Aite Group. Lee recently wrote for Advanced Trading, In Defense of the High Frequency Trading Community:
Various potential regulations, including the reinstatement of the uptick rule and transaction tax directly threaten the business model of the high frequency trading community.
Sense on Cents counterpoint: The uptick rule required short sellers of stock to only transact at a price higher than the previous trade. Our friendly Investing Primer, Investopedia, informs us:
This rule was introduced in the Securities Exchange Act of 1934 as Rule 10a-1 and was implemented in 1938. The uptick rule prevents short sellers from adding to the downward momentum when the price of an asset is already experiencing sharp declines.
The rule worked fabulously for almost 70 years before being discontinued in July 2007. It was discontinued in an attempt to promote trading volume on the exchanges and in turn increased fees.
Sang Lee writes further in making his point:
In recent years, growth of alternative electronic trading venues has been driven by a multitude of factors: the introduction of decimalization; the adoption of FIX as the main protocol for electronic communication; the availability of technology for developing market infrastructure conducive for electronic trading; the rapid adoption of electronic trading; the adoption of algorithmic trading; and the availability of co-location services.
Sense on Cents counterpoint: Fairly obvious with all of the technological advancements that we are not looking at your grandfather’s “buying 100 shares of IBM.” Modern day trading activity is both fast paced and high energy. Little wonder why it has become so much more driven by technical analysis than fundamental valuations. (more…)
