Media wakes up to HFT concerns

Ok, who woke up the media and told them about what has been going on in the stock market over the past two years?  After being one of the few critical voices trying to be heard over a chorus of HFT cheerleaders, we at Themis Trading have been pleasantly surprised with all the critical attention HFT has been getting lately in the press.  Just in the past few days we have been greeted by these stories:

 August 22, 2010 NY Times: “Stock Swing Still Baffles, With an Ominous Tone”  – “There is a credible allegation that there is seriously abusive practices going on,” said James J. Angel, a financial market analyst specialist at Georgetown University, “to the extent that somebody is firing in a very high frequency of orders for no good economic reason, basically because they are trying to slow everybody else down.”

August 22, 2010 Financial Times: “Brokers face fines over role in flash crash” –  “The sub-custodian chain can bury the identity of high-frequency traders in Eastern Europe and elsewhere who raise serious regulatory concerns,” Richard Ketchum, chairman and chief executive of Finra, told the Financial Times.

August 24, 2010 WSJ: “Saving the Stock Market Only to Destroy It” by Dennis Berman – “They thought they were saving the stock market. They ended up maiming it…Yet somehow we have wound up right where we began: with a market that many perceive as tainted and prone to gaming by a cadre of insiders. Only this time, instead of wielding the biggest, baddest berth on the New York Stock Exchange floor, they are wielding the biggest, baddest computers….Saving money has taken its own toll. The market has become deeply fragmented, traded across at least 50 trading venues both large and small. Those high-frequency traders now making the markets have only the option and not the responsibility to step in at a time of distress like the flash crash. In other words, we have traded cheaper up-front costs for unknown back-end ones. That is exactly what is spooking the same investors the SEC vowed to protect in 2005.”

 The noose is starting to tighten now on HFT as the masses begin to demand change.   But, if the heat gets too much for some of the HFT’s, they may want to consult Mike “The Situation” Sorrentino from MTV’s Jersey Shore for their next venture.  After having to put up with Snookie and getting ambushed by some “grenades” in the hot tub, The Situation is about to cash in.  The Hollywood Reporter is reporting that he will earn $5 million in 2010   Now, that is a lot of scarole for a guy whose day consists of “GTL”  (that would be gym, tanning and laundry for those of you who have never seen the show).