Just Steal In The Open


There’s no need to bother with trying to hide it any more.

Incidentally, “off market” the stock traded as low as four dollars and change.

That evidence, of course, has been “excised”, and the so-called “circuit breakers” that were supposed to prevent this didn’t.  We now have a new breed of computer-led market abuse, with this one apparently having figured out how to get around the circuit breakers.

This market has now become one of computers that look for “opportunities” to play this game between the different markets.  If you have a stop order, you’re going to get it run and get hosed.  You therefore can no longer manage risk unless you can sit on the terminal all day long, every day, and evaluate whether what you’re seeing is due to some news that is hitting the tape you haven’t heard yet, or whether it’s a computer-driven game.

Of course you have no way to know which it is – which means you must guess.

Guess wrong, the same thing happens if you have a stop.  You get hosed.

These sorts of “events” are now commonplace.  Nanex has repeatedly documented what look to be intentional acts of “quote stuffing” intended to cause delays in the quote system, which the computers then pounce on – and screw you.

There is no longer a fair and open market in which you can trade.  There is now a market full of pick-pockets who roam the exchanges with impunity and in fact legal sanction and permission from the exchanges and regulators, stealing as much money as they can, targeting random stocks on any given day.

As an investor, you have no defense against this, since these acts have been made explicitly legal, even though it is allegedly unlawful to take any act that is intended to manipulate the price of a security.

Total number of indictments?  Zero.

One sanction, issued against a company that got caught doing the same thing a few years prior, and yet still had the ability to interconnect with the exchanges – and do it again.

There’s no point in investing and in order to trade you have to be willing to accept the risk of these intentional acts of theft – that is, the risk that government-permitted pick-pockets are roaming the investment landscape along with those who truly are disagreeing on the price of an asset – that is, those who are performing the price-discovery act.

Don’t expect enforcement against anyone on this.  Fully 70% of all volume – all shares traded today – are coming from these jackals – these “HFT” machines that, when they’re able to find an exploitable problem like this, instantly jump on it before you even see it, operating with a speed beyond the capacity of a human with form and function guaranteed to make you the loser.

There is no market in which you can invest any more folks, and until the people who are doing this are stopped, their computers unplugged, and the principals involved go to prison, there won’t be.

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