Slashdot Mirror
Somebody Stole 7 Milliseconds From the Federal Reserve
An anonymous reader writes "Three to seven milliseconds before the fed moved interest rates, billions of dollars of trades were input that took advantage of the changed rates, reaping huge profits. According to a report at Mother Jones, 'Last Wednesday, the Fed announced that it would not be tapering its bond buying program. This news was released at precisely 2 pm in Washington 'as measured by the national atomic clock.' It takes 7 milliseconds for this information to get to Chicago. However, several huge orders that were based on the Fed's decision were placed on Chicago exchanges 2-3 milliseconds after 2 pm. How did this happen?'"
Looks like you picked the wrong week to stop sniffing glue.
Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
Now we have proof!
Its because the powers who make up these Fed changes are in it for the money, they tried to get their friends billions and they hoped no one would notice the few milliseconds.
Or why it is framed as 'banks break physics' rather than 'someone talked and then fraud happened'.
they STILL didn't get first post, did they?
If you have inside information, you can act surreptitiously claiming to guess what the board is going to do. The timing wouldn't matter. If you lacked inside information, you could still have an algorithm waiting to trigger new buy/sell values based on anticipated activity levels after any fed announcement.
There isn't any story here at all.
Can someone explain this to me in idiot? I don't see what the problem is, nor why I should care.
If you don't see a problem, then no amount of idiot will make you care.
I have a hunch, but I'm not about to tell you! The speed of light says it is possible, I'll leave it at that! The gov spends lots of money in their lockups to make sure cheating doesn't happen...
Can someone explain this to me in idiot? I don't see what the problem is, nor why I should care.
FTFA
There would seem to be three possibilities: 1) Some trader was extraordinarily lucky, placing a massive bet just before a major announcement that would make that bet highly profitable. 2) There was a leak, either by a media organization with early access to the data or even someone at the Fed. Or 3) The laws of physics have been violated as the information traveled from Washington to Chicago faster than the speed of light.
Big money interests are engaged in insider trading.
In idiot: Bad men do bad thing. Touch you in bad place.
Do you even lift?
These aren't the 'roids you're looking for.
They didn't steal 7 milliseconds.. they had the information minutes or more likely a few hours before everybody else. Don't try blaming this on some simple technological advandage.
High Frequency Trading isn't new... http://en.wikipedia.org/wiki/High-frequency_trading This past June, a news article caused a $28million dollar gain: "If you’re a high-frequency trader, a few milliseconds is a big deal. And in this case, a 15-millisecond head-start meant that $28 million in shares traded hands before the number was even published, http://qz.com/91242/the-15-millisecond-head-start-that-led-to-28-million-in-trades/" This shouldn't come as a surprise that companies in the business of making money will do everything that they can to (drum roll...) make money
I'm pretty sure it was Billie Ray Valentine and Louis Winthorpe. They did this previously and managed to bankrupt Mortimer and Randolph Duke in the commodities market.
The world is made by those who show up for the job.
Someone had inside information, and placed trades in order to gain a profit using that information that others didn't have access to.
How did this happen? The big firms have trading algorithms that handle trading automatically. They're sophisticated enough to detect patterns, and survey enough information and websites to detect a false tweet about an attack on the White House that they brought down the stock market about 5% in a few seconds just last January.
You think the NSA conducts mass surveillance? They only have paranoia and government budgets to sustain them. Wall Street has profit and the potential for unlimited profits to motivate them. Based just on motivations alone, who do you think has the better technology?
...that if the timing is down to milliseconds then the system is broken. It's automatically an unfair playing field tipped towards the largest competitors that have the computing power and programing to operate on that time scale.
Of course nothing about Wall Street is about fairness anymore and usually they don't care about the law, either.
Washington to chicago by road is 1100 km, that's 1100 km/300000 km/s = 3.6ms, so in a straight line it would be less than 3.6ms.
Insider gets info early, writes code order trades at 1:00:00.008 pm Chicago time. PC clock isn't perfectly synced with the atomic clocks, runs a little fast for some reason.
The real thing to look out for are all the trades made before 2:00:05pm Eastern time, because it will take around 5 seconds for any human observer to read, notice, decide, and click a macro trigger. It is very safe to assume that all trades within 5 seconds of an announcement are suspect and worth investigating in more detail.
The Federal Reserve announced a change in interest rates at a particular time - 2PM, Washington time. Trades were placed in Chicago 2ms after 2PM. It takes about 7ms for news to get from Washington to Chicago. As a result we can say two things:
1) Someone has been dabbling in insider trading, or has a loose mouth. Either way, if they become known, they're in deep shit.
2) Slashdot editors don't proof-read their submissions, given that the summary states it takes 7ms for a message to get to Chicago, that 2-3ms after 2PM trades took places on the Chicago exchanges, and 7-2=5ms, not the 7ms we were promised was stolen.
The alternative of course is time travel, which I'd much rather was true. A couple of years back we had a couple of crackpot papers on the arxiv that can be interpreted as saying that the Higgs boson was travelling back in time and sabotaging attempts to observe it. Perhaps this is evidence that the Higgs is getting more subtle.
If you have insider information well ahead of the announcement, you schedule your move not days, hours, or minutes before, but a few milliseconds before, and hope nobody notices. The smaller the advance time, the less likely it is detectable.
There are a lot of assumptions in the facts of the situation, though. Are the clocks really that well synchronized and such low latency that 2ms of difference can't possibly be explained other ways? Or maybe someone just took a huge but honest gamble and it paid off? It certainly deserves investigation, but there are probably plausible alternative explanations besides something nefarious.
Information was leaked and the whole thing setup to look somewhat legitimate. 3ms is the absolute fastest anything can get from Washington to Chicago, so the information was there before the official announcement.
I'm pretty sure it was a speed of light violation. We should announce to the rest of the world this marvelous discovery.
Goldman Sachs
"Three to seven milliseconds before the fed moved interest rates, billions of dollars of trades were input that took advantage of the changed rates"
Do you have any idea what you're talking about? The decision to taper or to continue the bond purchasing has absolutely nothing to do with the federal funds rate, which remains at the zero lower bound, where it has been for years.
Several large orders betting the other way may have been placed a few milliseconds after 2:00 PM as well. But there is a 'feature' in on-line trading that allows high frequency traders to cancel or abort trades that they claim were made as a result of 'system errors'.
Have gnu, will travel.
http://www.zerohedge.com/news/2013-09-24/tip-box-fed-made-it-possible-many-people-leak-it
Furthermore, the 7ms is wrong.
It would seem foolish to trade within milliseconds of 2pm without knowledge of the Fed decision, since the other party could be in DC and in legitimate possession of the information. So it is surprising that the criminal got a counterparty to accept the trade. This trick will probably only work once. There was a time when this sort of information was released after the close of markets.
Did they use TCP/IP over neutrinos?
Here's hoping!
uh, Chicago is on Central time, so 2PM Washington (Eastern) time = 1PM Chicago time, so 2PM+2ms Central time = 3PM + 2ms Eastern time...
3.757 ms is the time it takes light to travel from DC to Chicago(throw in a couple mirrors on balloons to get over that whole curvature problem, keep in mind I'm basing this off of 700 mi which is actually a driven route so I'm sure straight-line is shorter), so it -could- have happened without insider info... and some really cool lasers attached to really fast computers. (hah!)
One of the one's that sucked, that is.
NSA chairman's broker is based in Chicago. :-)
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
If people knew half the shit that Wall Street does they wouldn't like it. I think articles like this actually make it harder to have a productive conversation about the fairness of Wall Street because it makes it seem like this type of abuse is the exception rather than the norm.
There is a revolving door between Wall Street, Corporate board rooms, and the Fed. Not only do people go through that revolving door but so does information, so does hits about what might happen in the markets or what might come out of the Fed. Go watch Wall Street, either one, it's dramatic but its accurate enough for the average person to get a idea of what goes on behind those closed doors.
Since the briefed reporters entered the room with the cameras in it for the press conference two minutes before 2:00:00.00, their appearance might have contained the information. F'rexample, eyeglasses off = no taper, eyeglasses on = taper; arms crossed over chest = higher rate, hands in pocket = lower rate, arms at side = no change.
OTOH, it wouldn't surprise me if corporations (and the NSA, CIA and DIA) had made breakthroughs in information transmission vs, time, either.
http://www.wolframalpha.com/input/?i=washington+to+chicago
This isn't high frequency trading, this is either a violation of physics or insider information.
No. And it shouldn't even come as a surprise that corrupt government officials provide insider information to greedy businesses.
But while it may not be a surprise, it is still an outrage.
Of course, the deeper problem is that the fed attempts these kinds of manipulations of the economy to begin with; if the fed couldn't do that, there wouldn't be insider trading on this kind of information in the first place.
http://www.nanex.net/aqck2/4436.html
"To those who are overly cautious, everything is impossible. "
that is all
I don't see a probem here I figured someone had a faster internet connection and with that their automated transcation systems just did the job they were to do. The following article even mentions the need for speed: "Those cables could reduce the Internet's latency by about 60 milliseconds between those two points That's an imperceptible lag for the average Internet user, but it's an eternity for high-speed stock traders. They can make or lose millions of dollars in that span of time" So nothing got stolen just someone was faster as far as I would think. http://money.cnn.com/2012/03/30/technology/internet-cable/index.htm
Paul: Father... father, the sleeper has awakened! - Dune
they have the government in their pockets, they rule your world. any questions?
What is not clear to me, and I even rtfa is did traders know the fed was going to be releasing information at 2PM? If so this could have just been a really good guess that the fed was going to continue the current course. So could traders have known an announcement was coming?
Or 4) Somebody actually spoofed the source address and the trade was placed in DC, and reached Chicago on a higher QOS level internet link.. Literally packages competing with each other in the interface queses bit buckets.
Or it could just be a flaw in the forwarding mechanism in some really big router on the way that preferred packets from one source than packets from another.
This is a much more plausible explanation.
Nah, it couldn't be that. We would have gotten our space cash by now.
4) Information leading to financial gain travel at speeds faster than the speed of light.
Someone had inside information, and placed trades in order to gain a profit using that information that others didn't have access to.
GREAT SCOTT!!!
They can take my LifeAlert pendant when they pry it from my cold dead fingers.
Someone made a lot of money by being a very productive member of society. He was in fact too productive, thus breaking several productivity laws set in place to give an illusion of productivity being fairly distributed and productive.
From: http://www.cnbc.com/id/101056168
"Inside a room on the top floor of the William McChesney Martin, Jr. building, Fed officials instructed reporters not to send information about that decision to the outside world before precisely 2 p.m. as measured by the national atomic clock in Colorado.
The doors were locked at 1:45 p.m., and Fed staffers handed out copies of the statement at 1:50 p.m., allowing reporters a few minutes to digest the complicated document before reporting on its contents. At 1:58 p.m. television reporters were escorted out of the room to a balcony where cameras had been prepositioned. The Fed's security rules dictated that television reporters were not allowed to speak before precisely 2 p.m. Print reporters were told they were allowed to open a phone line to their editors at headquarters offices a few moments in advance of the hour, but not allowed to interact with people on the other end of the line until exactly two p.m."
So many hacked communications channels are still possible from this. The print writers can signal the editors when making phone calls before 2pm, without talking to them. For example, the editor can instruct the reporter to call them on landline if it's a sell, or his mobile number if it's a buy. The TV reporter can wear a jacket if it's a sell, or remove it if it's a buy, so someone across the building can monitor the balcony for pre-release signals... etc.
Also, from the http://www.nanex.net/aqck2/4436.html:
"It wasn't just gold. It was everything that traded. In fact, the 1/100th of a second after 2pm was the most active 10 milliseconds in the history of the U.S. Stock an Futures markets."
This was a major, major hack, and they waited as late as they could wait, without signaling their competitors.
No leak would allow someone to time those trades so precisely. there may have been a leak, but there was also something done to make it possible.
Another possibility is that it was a big player like Buffet or Sachs, counting on profiting one of two ways: a) precede the market b) bet wrong but cause the market to reverse, triggering massive losses to those who told their broker to trade according to the news, with a stop-loss protection.
To carry out B, you have to be able to place a second bid greater in magnitude but opposite sign to the first, about ten minutes after the news breaks. You also have the liquid assets to do it. since the bailouts doubled the national debt and gave it to banks in interest free loans with no set date of repayment, then yes, itmay be possible that investment banks did it.
Correct Horse Battery Staple: 72 bits of entropy. Enter "Correct H" into google. When it generates the phrase, that's
That assumes the fiber travels in a straight line. This is not the case, though people have been blowing holes thru mountains to straighten the routes to make trades faster...
Awesome furniture, accessories and cabinetry in Santa Rosa, CA: http://humanity-home.com/
That doesn't justify the 7-2=7 thing. (Let's assume time changes are implicit, being a thoroughbred European as I am I might be forgiven one or two lapses on US timezones.)
Inside job. Someone knew in advance what the news would be and programmed a set of trades to happen immediately before the news was announced.
Time Bomber the Book coming soon.
4) Someone released the information after 2pm like the rules say, but they released it from a server in Chicago at 2pm, so it beat the news leaving New York at 2pm by enough milliseconds to make someone a huge profit.
It was "as much as $600 million dollars in assets changed hands in the milliseconds before most other traders in Chicago could learn of the Fed's September surprise"
Sure that is a lot of money, but smaller than the "billions" promised in the Slashdot story.
I suppose you can measure anything on the "billions of dollars" scale. I make a small fraction of billions of dollars every day.
//TODO: Think of witty sig statement
Yeah someone else pointed that out (or perhaps it was you in another comment) :) This is quite a silly story in the first place - insider trading is serious, but the summary doesn't seem to have been checked particularly thoroughly and this being Slashdot I've not bothered reading the article.
Haha that assumed I intended Washington, Tyne and Wear - which doesn't loom very large in the British pysche - and gave me a value of 20ms.
Or, more likely, 5. The clocks weren't quite synchronized and the trade actually occurred several milliseconds later.
Check out my sci-fi/humor trilogy at PatriotsBooks.
Sure it's plausible. Atomic clocks. What the exploiter did was try to time the leak so that it happened exactly after the fed announced its decision before anyone else had a chance to react on it. They performed the trades at exactly 2:00 so that it all looked kosher. The problem was that they did it faster than what is physically possible and thus what was a plan to give plausible deniability backfired and thus exposed that they had insider knowledge.
Huh?
The executive branch nominates the Fed president but that person doesn't report to the POTUS.
My guess is that someone with an inside connection to the Fed leaked the information (over cocktails or a golf outing the day before) to one of their hedge fund buddies who made the billion dollar bets. They jumped the gun because they figured that John Q. Public isn't going to believe that trades made a few thousandths of a second too early can really be that big of a deal. Even if they get caught and wind up paying a fine, they will still make out like bandits. Tax these millisecond trades and they'd go away or, at least, the volume would drop significantly. Instead of the paltry fines that the SEC levies on the cheaters, they ought to take the entire transaction away from the guilty party. That'd stop the practice. In a heartbeat. Third strike and you go directly to jail.
CUR ALLOC 20195.....5804M
Conclusive evidence for it!
I meant "tried to time the trade"
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
Well, when you transmit data using neutrinos, FTL communication is possible, right? /joke
No need to concoct such a nefarious plan.
http://www.zerohedge.com/news/2013-09-24/tip-box-fed-made-it-possible-many-people-leak-it
Plenty of people knew and could leak the information early.
The other option is that a news organization that had the same early access to the data released the data at 2pm (which they are allowed to do as long as they are also in sync with the national atomic clock which is typically a best practice anyway), and the servers they used to release the data were located closer to Chicago, in which the computers used by the high speed trading knew to get their input from those systems which were physically closer to their own location (potentially co-located within the very same datacenter), and placed their trades based on that information.
We were all warned a long time ago that MS products sucked, remember the Magic 8 Ball said, "Outlook not so good"
How do they sleep at night? Really comfortable. They are sociopaths.
The problem is that the light cone from DC to Chicago is larger than the time in which the first transactions happened in Chicago.
There are a few possible explanations:
- If the light cone is really 2-3ms, it is possible that one path of information went via copper wire (electrons in copper wires move at less than the speed of light) while the other went via fiber-optics
- Two paths as above, only with different latencies of routing equipment
- Someone in Chicago had insider knowledge, and was tipped off
- And from having read TFA, I think it's possible that someone with the embargoed information had a copy of it in Chicago, programmed to transmit at the intended moment, thus abiding by the letter of the rule. It is entirely possible that they might not have considered the relativistic implications, not even trying to be the "first post" guy. Whoever made those trades happened to be looking at that alternate source in Chicago instead of the "official" one. It could be argued that this would be a good idea to do intentionally, as long as they can keep the information properly locked up ahead of time when it is in more places.
With all the high-speed trading going on these days, Einstein was bound to get involved sooner or later.
#naabhaprzrag, #sverubfr-000, #agi-fcbafberq, negvpyr[pynff*=' negvpyr-ary-'] { qvfcynl: abar !vzcbegnag; }
The Obama administration respects no laws. Not even C.
Maybe someone finally invented thiotimolline?
#naabhaprzrag, #sverubfr-000, #agi-fcbafberq, negvpyr[pynff*=' negvpyr-ary-'] { qvfcynl: abar !vzcbegnag; }
The speed of light has nothing on the speed of bad news, so I assume there are some other exceptions.
When they say "Atomic clocks" they don't mean those cheap wall clocks you can buy that are synchronised via. a LW radio time signal, they mean actual atomic clocks that are synchronised and calibrated in a lab.
When it comes to high frequency trading these guys take things FUCKING seriously.
It really appears like all this mining for microseconds is a giant waste of resources, and very prone to corruption and mis-use. I see no value in it for 401k folks, or businesses looking to sell stock to fund new ventures.
Why not institute trading on a minute scale? Trades are all resolved between :00 and :01 seconds, and you have 59 seconds to arrange the next set of trades. This would allow a level playing field between humans and machines, and it is hard to believe that trading more often than on a minute by minute basis adds any positive value to the economy.
Yes, advanced notice of the news and trades programmed to execute at the appropriate time. However, they chose the wrong time to look appropriate.
Time Bomber the Book coming soon.
Well, yes, yes it would. Did the fed time their release for exactly 2:00 and slave their clocks to the naval observatory (as many modern computer systems do)? Does the financial community know this? The financial community has hyper-accurate knowledge of timing in their own systems as well as exactly how many milliseconds it takes to complete a trade.
Suppose you have information leaked an hour ahead of time. You can't act on it then because it'd be obvious that you had leaked information and you know they're looking for that. So, you have to wait until everybody else has it. But if you wait until everybody else starts to react to the news, your leaked information is worthless.
You also only have an hour to think about what to do, so you can't change your IT system and whatever plan you come up with you have to either act immediately or not. So, you tell your existing IT system that is already capable of hyper-accurate timing to execute a trade just after the announcement.
Later on you realize that everybody has hyper-accurate timing, not just you.
Seriously, I've been contacted by maybe a dozen financial company recruiters who want me to squeeze another quarter millisecond out of their trading network. I'd sooner flip burgers. Millisecond trading is theft. Period. Even when it happens enough milliseconds after receiving information to have broken no law.
Moderating "-1, Disagree" is simple censorship. Have the guts to post your opinion.
Looking good, Billy Ray!
It doesn't mean much now, it's built for the future.
Computers placing billion-dollar stock market trades based on what they see from other news computers in a matter of microseconds. Awesome.
Should I be trusting my investment portfolio to Agent Smith Holdings, LLC, or the firm Shodan Glados?
Perhaps this is evidence that the Higgs is getting more subtle.
And a lot richer.
We need a "+1 -- nice sig" moderation.
So, someone had inside information, but they were sloppy. They thought that placing trades at 2:00 PM was fine, but they didn't account for the delay of light.
Either that, or someone has a working neutrino communication system, so they can go through the Earth, not along its surface.
My bet would be on the former, and I wouldn't be too surprised to see some people go to jail over this.
That's what comes of not having a physicist on your criminal team.
The executive branch is ultimately responsible for what the Fed does, including investigating and stopping fraud at the fed.
You don't get it: the guilty part sits where the information was leaked. Punishing the people who acted on that information may also be useful, but it isn't going to solve the problem.
(posting Anon as I modded thread, bucc5062)
/. day), but even in the comments there is no mention of who dunnit, The 600M had to go somewhere, to someone and from that I would figure a good starting point.
,when the reality seems to be more colorful with some depth (and lousy reporting). Okay, I'll go read the article.
It would seem to me that a trade of this size, even at the speed in which it was made would have a identification trail attached in some way. I did not read the article (typical
1 - was there a crime committed? If so then somebody in the Fed or FBI would be starting an investigation (was that brought up)
2 - if no crime then while cool, it seems a non-issue so why all the noise?
I realize life is not black and white, but in a news story like this, the presentation makes it seems like "something bad happened" by unknown people
Catherine Zeta-Jones in a catsuit.
- If the light cone is really 2-3ms, it is possible that one path of information went via copper wire (electrons in copper wires move at less than the speed of light) while the other went via fiber-optics
Less than *what* speed of light? If you're thinking of c, then this applies to both copper wires AND optic fibers. (There's this thing called index of refraction for glass.)
Ezekiel 23:20
It might take 7ms for signals sent over fiber at 2/3 c via non-direct route...
However a pre-programmed bit transmitted via radio signal can propagate in 3 ms.
Given extraordinary lengths and expense HFT folk have been willing to take it seems logical that someone would do/try it.
is money - Ben Franklin
Deep shit? You mean they might be forced to accept another billion dollars in free bailout money?
Manipulating the past is a pricey game. Perhaps this is actually the Higgs recovering its losses from the other year.
I'm sure that The Fed and Goldman Sachs having essentially revolving doors connected by a short hallway has nothing to do with it.
I'd be surprised if every computer involved in these sorts of transactions had an actual physical atomic clock built in. Instead, I would expect a single master clock that multiple devices synchronize themselves with, which opens up the possibility for local network propagation delays that can introduce slight imprecision. I could be wrong.
Check out my sci-fi/humor trilogy at PatriotsBooks.
I am so glad that when corporations couldn't be bothered to honor their pension promises to employees the IRS came up with the bright idea of allowing 401ks so we can all gamble our retirement life savings away in the stock market.
The difference between 1929 and 2008? Not nearly enough bankers jumping out of windows. Maybe someone should start pushing them.
I remember watch this documentary about the Super K Computer in Japan with about 50.000 Hard drives and countless overclocked processors.Anyways this computer was doing thing never imagines with these super computations,one part in this documentary spoke about unnamed company using this technology to reap the most from the markets.Buying and selling huge lots of stocks and bonds in milliseconds.
Radio transmission delay is 3.2 ms. It required transmission of a few bytes (single data bit with "huge" security overhead).
956 km / 300 km/ms = 3.2 ms
http://www.mapcrow.info/Distance_between_Chicago_US_and_Washington_US.html
Kilometers: 955.76
https://en.wikipedia.org/wiki/Speed_of_light
299,792,458 m/s
Why aren't these announcements made during non-trading hours?
I understand that there could be trading going on in Asia and Australia and such, but the impact will still be lower.
I think the option of investigating the FED for leaks is the best option to follow. Make sure they check who came up with the idea of making the announcement while futures markets wre in session.
Someone made a lot of money by being a very productive member of society. He was in fact too productive, thus breaking several productivity laws set in place to give an illusion of productivity being fairly distributed and productive.
Transform to translate to ethical human speak:
s/productive/corrupt/g
Make sure everyone's vote counts: Verified Voting
What if there was a guy named Beeks that had the report in his briefcase and traveled to the exchange in advance of the public announcement, and there were 2 men and a woman that intercepted the report and used it to their advantage while swapping it with a fake report which was given to the original people?
Signal in copper travels about 98 pct of the speed of light in air and light in fiber travels about 66 pct. Copper is faster not taking into account any latency in amplifiers.
You're thinking of an inverse neutrino field diverted through the deflector dish. That's how you generate a biased coherent tachyon beam. Be sure to use compressed pulse power modulation to prevent plasma feedback induction.
I can only hope the responsible investors are properly ticketed and fined. What a glorious and historic $75 that will be.
round-trip time would be 14 ms then.
thanks, slashdot, for giving my my recommended daily allowance!
I'm pretty sure it was a speed of light violation. We should announce to the rest of the world this marvelous discovery.
I took care of it next week.
Time Bomber the Book coming soon.
Whoever did it had illegal insider info and probably thought that no one would notice a few milliseconds.
The cow says "Moo." The dog says "Woof." The Timothy says "Thanks, valued customer. We appreciate your input."
"For security reasons, we firewalled NTP" ? :p
When did we start talking about airport security?
Check out my sci-fi/humor trilogy at PatriotsBooks.
Leaving dissatisfied. ;(
People knew the taper wasn't happening weeks beforehand, without any insider knowledge;
http://www.youtube.com/watch?v=Tak9ODlBJgM
Is this information released in a machine comprehensible format? If not, then there would be additional time for a person to communicate the information to a computer. This might be as simple as a single keystroke, but that still takes about a second to do.
Are we sure that there isn't something more to the story than a simple 7 ms?
-1 disagree is not a modifier for a reason. -1 troll, flaimbait, redundant, overrated are NOT acceptable substitutes.
High frequency traders are using quantum-locked communications!
Get free satoshi (Bitcoin) and Dogecoins
I had my SLV hedged with some puts, which had increased on value over the past several days, due to anticipation of taper. Speculating on the possibility of surprise, I traded them for a spread in the near week options. The puts were January '14, so the trade actually resulted in a net credit.
Next, the surprise. This caused my weekly call options to increase in value *dramatically*. Score 1 for me.
Now this isn't all roses, because my other hedges had to be put back in place--I'm long SLV, but short Jan '14 20 calls and I don't just want to let that run naked. I won't bore Slashdot with the banality of hedging these positions. The whole affair has gotten me some cash back from selling calls against SLV--in fact, I started with 1000 shares and now have 1100 due to the strategy of selling vertical call spreads and using the cash it generates to buy more shares.
With a little luck (yes, luck, it's gambling), the year will end with me ownint 1200 shares of silver--a 20% gain in terms of silver the past couple years; but an unrealized dollar loss. Then, I wait a bit to see if SLV rises to the point where I'm willing to sell a vertical call spread and use the premium to buy some OTM puts so I can sleep well.
This is a very conservative, albeit somewhat complicated option strategy, and if the SEC ever audited me they'd see I'm not dirty. The fact remains though, I made the right trade a couple hours before the news, simply because I thought it might be prudent to exchange the time value on my puts for some cheaper near-calendar options.
2pm in Washington is not 2pm to an observer in Chicago. The concept of NOW is relative to the observer. There is no breaking of the laws of physics here and no proof of insider trading.
Apparently the great minds of the Masters of the Universe aren't familiar with the speed of light. No matter for them though - the head of any major financial institution could rob the president at gunpoint on live TV, and still not be prosecuted for it.
Congress has immunity to insider trading laws. If pointing a finger, point it where you might find a real target.
Makes me wonder about the government shutdown drama... very easy to know when to short your stock when you can control what US stock values are in the first place...
Fixed that for you. (And I don't mean "For The Win".)
Of course, this hack isn't even new. There's the value of delaying a radio broadcast was documented in the movie The Sting. And before that there was the Count of Monte Christo who did a man in the middle injection of fake tweets into France's Semaphore packet system to ruin a banker.
I would assert that High frequency trading is simply parasitic. Many people have suggested a transaction tax could fix this. It would damp the frivolous trades yes, but it would not fix these mega scale singleton trades that can happen like this.
my proposal: What one should do I think is fix this by injecting random delays into the trading system itself. That is you would queue up all trades for the last 100 milliseconds into a block. Then randomize their order. then execute the trades in that new order. This would erase any value of a trade that depended on beating another trade by a few millisconds. You'd still have some edge cases to worry about (i.e. racing to be in the block before the next block). But you could fix that too (dither the interval size between 80 and 120 milliseconds at random, so no one would know where the block boundaries were.
For this to be viable enough people would have to agree that HF trades have no actual value added. Additionally, one would have the potential problem of exchanges popping up that did not honor this. But those would not likely have enough liquidity to matter.
Some drink at the fountain of knowledge. Others just gargle.
Was it Aaron or Abe?
If it's such a big problem how about you announce it at 4pm when the market is closed?
Seven puppies were harmed during the making of this post.
You're assuming they were using fiber...there are faster ways to get to market these days.
It sounds as if news services could have released it at exactly 2pm in Chicago without breaking the Fed's rules. The rules say "public use."
I often work with material under a press embargo. If I get something on Tuesday with an embargo of 2pm EST Wednesday, that means I can send it to my editor in Chicago (or anywhere else) on Tuesday. That's not public use. My editor will wait until 2pm EST and release it (for public use) at that time in Chicago.
FTA:
Transmitting them to the news service's own computer system in Chicago isn't "public use."
"No public use" means you can transmit your story to your editor in Chicago, who holds it until 2:00:00 pm EST and releases it immediately in Chicago.
That would be an unusual news story. It would consist of 1 machine-readable bit meaning "buy." But that's all their readers need.
Quick, everybody, you've got 7 milliseconds to mod me up to +5 insightful.
I'm pretty sure it was a speed of light violation.
Technically no. A wormhole is a space-time distortion, and the speed of light is not, and cannot, be violated when traveling through it. It only appears to be a violation of the speed of light to someone not taking into account the reduced distance through the wormhole.
P.S. Kudos to our financial wizards for figuring out how to create and use a wormhole. Contrary to the cynics who think they just plain cheated, using a wormhole is not forbidden by any financial regulation.
You're thinking of an inverse neutrino field diverted through the deflector dish. That's how you generate a biased coherent tachyon beam. Be sure to use compressed pulse power modulation to prevent plasma feedback induction.
but what if you simply reverse the polarity of the neutron flow? That always works!
http://www.geoffreylandis.com
If a packet leaves Chicago heading east and a packet leaves New York at the same time, which state will they meet at?
The clocks weren't quite synchronized
Yes, it's so difficult to synchronize clocks these days. A GPS receiver will only get you a time reference accurate to within tens of nanoseconds.
The industry standard for high frequency trading is 3ms. They have these crazy algos reading news in real time, making predictions, and performing end to end execution in 3 ms. That's your economy on crack. They should end it all.
It could be both thanks to nominal value verse market value.
Let’s say I buy a Treasury future option. The underlying asset would be $100,000 in Treasuries but the option might trade for $1,000.
If the trade was done on the exchange I am going to guess that the nominal value was 600m and the actual market value was 1/100s of that value.
4. NSA insider got the info in the minutes before 14:00EDT, contacted buddy to release the order queued up for 13:00CDT.
You are being MICROattacked, from various angles, in a SOFT manner.
The executive branch is ultimately responsible for what the Fed does, including investigating and stopping fraud at the fed.
Great! Now all we have to do is find out who committed this egregious crime, and the head of the Justice Department will prosecute, right?
Eric Holder
Attorney General of the United States
Aw, fuck. *sigh* nevermind...
An enigma, wrapped in a riddle, shrouded in bacon and cheese
Apparently, the quants have put their physics expertise to good use. Unfortunately for the rest of us, it's worth more as a trade secret than as a generally available technology.
The "computer" is not going to make a new repair to fix damage done by an investors faulty logic.
All trades should be executed with a random delay between 5 and 30 seconds.
-- "Oh. This guy again."
If someone was expecting one of two outcomes, they could have done the math on both of them. If I make this trade what can I win. They placed the trade not knowing the outcome. But they had a cancel order (or reverse order) ready to go. If the news was not what they expected, they could have canceled it with minimal losses. Buying a lot of gold and the market doing nothing on the FED's news would mean that they could sell it back without much market shift.
I know this is what happened because I did stay at a Holiday Inn Express last night.
Im a gamer, not a grammer major. This post is full of spelling and grammer mistakes.
P.S. Kudos to our financial wizards for figuring out how to create and use a wormhole. Contrary to the cynics who think they just plain cheated, using a wormhole is not forbidden by any financial regulation.
Why does it have to be a wormhole? Couldn't it be quantum entangled bits as well? We did just successfully complete quantum teleportation in a lab last week....
nothing mysterious here except why this submission was accepted but mine never are.
As someone who makes a good part of my living trading bonds, there's a lot of misinformation here.
1) There is no such thing as "insider trading" in treasury bonds or their futures (or commodities futures or foreign exchange or options on any of the above). The reasoning is that the majority of the participants in those markets are knowledgeable insiders. Corporate bonds are a grey area but no one has ever been prosecuted and numerous people have openly traded on insider info. The SEC brought one case related to trading on credit default swaps, but it didn't go anywhere. Insider trading on stocks and stock options is illegal by case law.
2) if you had information about the Fed's future rate policy, you could make you bet in the spot or futures markets well ahead of the announcement. You would get a better price on your bet by doing so assuming it was a large bet, because markets tend to thin out before announcements (for technical reasons irrelevant to this discussion - just know it happens reliably).
I would guess the most likely explanation here, as with most apparent violations of the speed of light, is poor clock synchronization or other measurement issues.
No, not at all. The first link mentions another possibility a grey area.
3) CNBC is suspected of transferring the information before the 2pm to chicago, but not releasing it to the outside world until 2pm. No faster than light speed needed. The rule was stated as disclose from the room to the public. Is a server in chicago public? No. Is it outside the room ? , yes. So my understanding is that CNBC might be in trouble, or might not if the rule was ambiguous enough.
Never break laws or regulations that can simply be bent to your will.
Well.. maybe. Or Maybe not. But Definitely not sort of.
If Comcast is doing the routing, Oregon.
"Think about how stupid the average person is. Now, realise that half of them are dumber than that." - George Carlin
Utah, at the new NSA data center.
why does 1) involve "extraordinarily lucky" people...either the rate is adjusted or it isn't...seems quite possible to have correctly guessed the outcome
Some people have some odd ideas that the stock market creates money, that more money comes out than goes in, etc. by some magic. It doesn't actually work that way; the stock market is a zero-sum game played in multiple non-fixed units. Some units can become relatively bigger or smaller than others. This is itself an illusion, as only the money matters.
In short: you spend $25 for a stock, but then the stock is worth $50. You keep 1 stock, but it's equivalent to $50. This gives the illusion that you've gained profit by the stock becoming worth more dollars.
The next stage in this illusion is that you sell the $50 stock and get $50. Somebody else who has $50 trades you $50 for that stock. So it seems the same number of dollars and the same number of stocks are in the game, just now your stock is worth more dollars equivalent.
This should raise a red flag, and it does.
The only thing in the market is dollars. The rest is lies.
Let's say the market has exactly $10,000 in it, no more. 100 stocks worth $100 each, people have bought them, they now have $10,000 of stocks and $10,000 of money. Then the stock becomes worth $200, and people start selling. As they sell, that $10,000 of money moves *very* quickly; soon there is little money, say $1,000 of money, but there are still 55 stocks left. People will try to hold onto their money, we could conjecture; or we could extrapolate that you may try to sell 10 stocks but that's $2,000 and there are only $1,000. In either case, you need to roll back the price of that stock to sell it. To sell it all off, you'll have to deal with a downward price spiral--lower the price as the last bits of money dry up, until people are buying the stock off you cheap.
In the real market, liquidity rarely runs dry. More money is always put into the market than needed; and more stock is available than desired. When a stock becomes more desirable--the price appears to be increasing, the news indicates it may be desirable, etc--the price goes up high. This is when "smart money" unloads the stock onto "dumb money"--that is, the bright traders give you overvalued pink slips and take your money. Eventually the amount of liquidity from selling causes a price dip, and the desirability of the stock starts to slide. The stock comes down, and then the dumb money panics and sells. The dumb money then walks away with less cash, while the smart money buys back these cheap stocks to cycle again.
The short of it is: You should care because investment bankers basically live by robbing your retirement account dry. Whenever somebody gains money, somebody else loses it. If somebody is cheating, they're cheating people out of their money.
This is why I focus on decreasing my debt rather than making retirement savings; and why my savings are primarily low-risk and cash based. It's hard to rob people blind by playing the game better than them. I can do it, but it's really fucking hard and it's kind of a career-type thing. Sorry, I have better things to do. I'll take an honest job. If I'm not playing to win, I'm not putting my money into the pot to watch it get stolen.
Support my political activism on Patreon.
1) Some trader was extraordinarily lucky, placing a massive bet just before a major announcement that would make that bet highly profitable.
To what extent did people know a major announcement would be made at 2pm?
2pm is a nice round number, so it's plausible that someone already had a big bet scheduled to go off at that time.
But if people knew a potentially major announcement would be made at 2pm having a prescheduled bet go off at that time is just ludicrous.
I stole this Sig
And my sources inside the Treasury agree.
They only care about jail when it's the 99 percent, not the Masters of (Theft in) the Universe.
-- Tigger warning: This post may contain tiggers! --
the head of any major financial institution could rob the president at gunpoint on live TV, and still not be prosecuted for it.
Well, duh. I thought that's why campaign promises were never fulfilled. They even make you move your whole family to the white house so your loved ones can be "secured".
It also assumes that you have one guy at one end of the fiber with a flashlight and another guy at the other end looking into the fiber with his remaining good eye. In reality there are switching delays in the routers etc, which the companies involved have tried to reduce as much as possible, so I can believe that 1.5ms after the press release is issued, the photons are on the fiber for 4ms then 1.5ms after reading the photons, the HFTs have placed their orders.
Tachyon Control Packets running over Internet Protocol version 8 sub-ether.
-- Tigger warning: This post may contain tiggers! --
Utah, at the new NSA data center.
No, the one near DC. There are 3 in the continental US.
-- Tigger warning: This post may contain tiggers! --
Couldn't it be quantum entangled bits as well?
No.
There's always aftermarket (which used to be when I bought/sold most things).
Additionally, this would then spike out the Aussie and Japanese markets, and the latter are particularly sensitive these days and could start an Asia-wide trading spike that would magnify the effect much more than it should be to such "news" (if lack of news is news).
-- Tigger warning: This post may contain tiggers! --
Does it even make sense to discuss this in terms of ms? Once the Fed decision was announced, someone had to read or listen to it, digest it, and then make a decision. A purely non-thinking reflex in humans is measured in the order of 100 ms-- e.g. light goes on, push a button, no thought involved. Is someone trying to suggest that if the press release was given at 2:00:00 in a machine readable format, a computer parsed the information (it presumably was not given as a buy or sell recommendation) and made a decision to trade without human interaction/vention, it would have been kosher?
Even if this was 100ms after 2pm, this was almost certainly a criminal act. I think a human making a decision involving billions of dollars would probably like to take a second or two to make sure they weren't misinterpreting the press release before investing even if they were in a hurry.
Could it be that investors' trades, made in NY, get to Chicago faster than the Fed data does, via one of the dedicated dark fiber lines and microwave transmission networks boasted by the likes of Spread Networks, McKay Brothers, and Tradeworx? They are able to shave off many millisecs compared to conventional methods.
http://www.wired.com/business/2012/08/ff_wallstreet_trading/2/
If I spent $2 on my credit card; it would be easy to track me down. If I walked into a drug store and spent $2 in cash, the security cameras would record who I was.
Why don't we know who made this trade?
In idiot, the Woosh. is implied. .... Awwww", for a car alikeness.
or, "Vrooom, vrooooooooooOOOM. Weeeee! Ka-POW
This wasn't high frequency trading, this was a big trade, made intentionally to take advantage of a presumed market movement, and whoever made the trade would still have made it if there were a tiny transnational tax on top of it. This wasn't some computer constantly submitting prices and making hyperfast trades, it was probably a trading decision made by a real live human--it just happened to be very time dependent and was scheduled with millisecond accuracy (maybe too much accuracy if the story is correct).
A per-transaction tax would do absolutely nothing about a trade made based on information acquired over golf (which would already be illegal).
Bottles.
I'm pretty sure it was a speed of light violation. We should announce to the rest of the world this marvelous discovery.
I agree. It's obvious that someone has invented a way to transmit packets faster than light, so they are in transit before they are even transmitted!
Well I will take a crack at it....you see the problem is the current system is designed to allow the parasites, those that have made insane amounts of money by rigging and manipulating the government and the system to keep their elite status by being able to pull shit like this which ordinary folks can't do because they don't have the capital required to "buy in" at the correct facilities to beat the wire.
When i see shit like this, along with both parties seeming not to give a shit about being scene outright kicking the poor when they are down i have to wonder....how much time does the USA really have left? After all as has been pointed out several times the unemployment numbers are bullshit and if you figure in all those that they just magically drop from the rolls we are looking at a good 23%+ unemployment, meanwhile you have the right wing being so damned vicious to the poor you might as well replace the elephant with Monty Burns and then to add the shit icing on the asshole cake you have shit like this which allows the really nasty leeches like Goldman Sachs to make mountains of money off of the American people.
So I have to wonder if this isn't the root cause of why all empires fall, those at the top become so fucking greedy that they tilt the system so damned far out of balance the whole thing collapses. It pretty obvious that in the last 4-5 years or so many in power have stopped caring about the kayfabe of giving a fuck about anyone but the elite, the working poor and unemployed, which outnumber the top 1% by a good 10,000 to 1 (because in reality its more like 0.01% that get a good 70% of the wealth consistently) are just being bombarded with story after story like this where the elite scam billions and the only thing the government does is ask if they want a task break, and the war on poverty by attacking food stamps, medicaid/care, disability, welfare, etc makes it real clear to the poor folks that the elite really want them gone...so is this how it ends? With the poor getting everything taken away until their is nothing to lose and we have own own Arab Spring?
I don't know but I can tell you the flyover states are beginning to look like the depression, small businesses that were here for generations closed and the factories gone so that huge chunks of land are nothing but abandoned buildings, and instead of helping the broke and starving poor those in government seem to be doing everything they can to curbstomp poor folks and take away any benefits they may get. Hell I got a disabled relative that if he isn't able to win against them taking his disability he'll be homeless by Xmas, and I hear similar stories from all my customers, women and kids sleeping in cars because they found a way to take away what pitiful benefits they were getting, tents popping up all over the place because folks got nowhere to live, it makes me wonder if the whole French "let 'em eat cake" situation is repeating here and will end with the same result. The teeming poor have nothing to lose and their ranks grow by the day, its seriously bad here folks.
ACs don't waste your time replying, your posts are never seen by me.
The only plausible scenario seems to me to be the one where a leak took place well in advance of the news release. For a few milliseconds to make any difference, someone would have to have a bot capable of unambiguously parsing the Fed news release in order to make the correct trading choice. Unless such announcements are made in some highly structured, machine-readable format, a human had to have made the call on how to trade, and humans don't act that fast.
Then again, maybe it was Skynet...
To fool these folks, the Fed chairperson should start their speech, and then, before delivering the "big new", juggle or talk about movies for several minutes (or several hours). Or, announce the the information will be provided at a future date.
In the U.S. of A. the term "insider trading" applies only to share/stock trading, where it is illegal.
Those not trading stocks - such as commodities, bonds or spot FX need not concern themselves with such nonsense. Trading on material non-public information is perfectly legal in those markets.
Or alternatively to a tax, introduce a random delay on the order of 1 to 5 seconds to each order. That way, a ms advantage will be lost in the "sea" of 5 seconds. And for those who say that ms level trading provides important liquidity to the market, I say that if 5 seconds makes such a big difference, to a trade, it is cheating or at best gaming the system rather than investing. And investing is in my humble opinion the true value and purpose of the stock market.
Yeah but learning that involves reading the article.
(Also, thanks, it does provide one entirely sane and legal explanation.)
Wall Street spends treasure on smart computer programs. Equally likely is they had a semantic search program on some news wire the Fed released at exactly 2 pm. The solution is to delay government electronic release by the lag time of public news media release. Beyond that, there is little one can do to beat computer trading response time by large funds other than put a fixed delay in the execution of computer trades to give real-time humans a shot.
That is why day trading by live humans can be a fool's game right now.
Can you show me on this dollar bill where he touched you?
It may have been legit (!). The rules* say "2pm by the National Atomic Clock", which is in Colorado. The distance from CO to Chicago is about 1019 miles, and to DC is 1681 miles. So Chicago can use the news 3.5ms earlier than DC.
* As gleaned from a handful of secondary articles on the story.
How does one steal milliseconds from a country's central banking system?
I guess time really is money.
Possible that the person had a radio transmitter in Washington, to send out a single pulse to indicate whether to make a trade or not. Not hard to get a low bandwidth / low latency radio signal from Washington to Chicago.
Ummm, what? That's exactly how most trades originate.
Here: "Today, when Bloomberg releases a market-moving headline, on average it takes 4 seconds for the markets to move after the news story hits. Bloomberg machine-readable news can help you get ahead of that window.... Bloomberg's Event-Driven Trading feed offers clients instant, machine-readable delivery of Bloomberg's world-class news and data, including breaking headlines, exclusive worldwide market-moving coverage, structured financial data from company releases, news analytics, and global economic data."
Trying to compete with these guys by websurfing is really no different than reading the evening paper.
Well, here's a recent article that says the percentage of trades that are automated has been falling and may only be slight majority now.
These sort of announcements are generally written by computer, sent by computer, received by computer (over quite expensive lines), parsed by computer, and acted on by algo trading, generally in less than 1 ms these days. There's a whole industry around it. (Or should I be expecting a Whooshing sound any minute now?)
I suspect the answer is: the "Chicago Exchanges" have nodes on the low-latency Wall Street network.
Socialism: a lie told by totalitarians and believed by fools.
Can someone explain this to me in idiot? I don't see what the problem is, nor why I should care.
problem:someone made mony using insider information, which is AFAIK a federal crime of felony;
solution: go old school and suspend trading in securities, including bonds and government bonds, from 15 minutes before a potentially market moving news dissemination, to half an hour afterwards.
this was widely used in equity markets before the socalled "liberalizations" came about. Oh, while we're at it, go back to force trading on official markets, of any securities liable to go exchanged in private hands and/or end up in instruments which end up in private hands. No dark pools, no proprietary trading , or other comparable things.
Problem solved.
"If a boss demands loyalty, give him integrity. But if he demands integrity, give him loyalty." (John Boyd, 1927-1997)
you do realize that 50% of all current trades last less than 100ms right? That is right folks 50% of the current volume is nothing but hot air. that is why the stock market has had 10-15% growth but the economy is barely doing 1-2%.
The fact this happened shouldn't surprise anyone. this is the problem of HFT.
i thought once I was found, but it was only a dream.
No one advocating taxing HFT actually understands HFT. They do both use the same infrastructure, though, so the confusion is natural.
Socialism: a lie told by totalitarians and believed by fools.
Of course! It's like putting too much air in a balloon!
You may notice a huuuuuge grin on the face of one George Soros.
No brain, no pain.
I stand corrected. So the press releases are in machine readable format-- I take that to mean in ASCII, html, pdf or whatever. But this does not mean they are in a machine understandable format. I can understand 4 seconds to react because a person is poised to click the correct sell/buy button after reading, understanding, and then executing the order. If the press releases are in such a format that a computer can make billion dollar decisions without human intervention, then that is yet another thing that is very wrong with Wall Street.
Washington DC to Chicago has a distance of about 595 miles. Light travels 186,282 miles per second. That is 3.19 milliseconds. The article keeps saying 7 milliseconds. What am I missing here?
Okay ... from the article here http://www.cnbc.com/id/101056168 it says:
"Print reporters were told they were allowed to open a phone line to their editors at headquarters offices a few moments in advance of the hour, but not allowed to interact with people on the other end of the line until exactly two p.m."
So print reporters are not allowed to 'interact with people'.
Lets piece together how this could have happened, and still been in line with the Feds likely flawed lockdown procedure in the information age.
1) Print reporters working for low latency trading services pre-submit their stories, without interacting with people, and these stories get distributed
to servers in Chicago and New York, ahead of the 2pm release time.
2) At exactly 2pm, the news services spew the 'actionable, summarized' story info out to the world, which already has orders placed to act upon the information ... buy if market going up, sell if market going down.
3) Speculators have orders placed far ahead of time, that go into effect at exactly 2pm, with tight stops, such that, 1 order that will be profitable from the news is held, while the other offsetting order that will lose from the news closes at market immediately. Traders who do this, pay the slippage between the 2 orders as a premium in order to profit from the larger upward move of the profitable order.
4) As the new orders and previously placed orders all execute, it causes the spike in market action / trades we all see.
The flaw in the process here is not the market, and grandmas retirement account is safe, as they are managed on much larger time scales.
The flaw in the process here, is that the Fed gives people access to the info ahead of time. They should release the info, out of a single mans mouth, from a podium, in front of all the news services, and the reporter who types the fastest wins.
If this story is indeed about a single conspiracy as it seems to imply, then the trading logs will show who that single person is. But, this is doubtful.
This appears to be normal, volatile market action, that started 7ms sooner that it should, because the Fed releases info early, and its lockdown rules are flawed.
It sucks to be an investor without those guys providing liquidity to the market. Market making is not "cheating", and while it may be "gaming the system", it adds value. Now, if you're just focused on "trading quickly after news" and not HFT: it sure beats insider trading, which is what the worry here is.
Socialism: a lie told by totalitarians and believed by fools.
Isn't it called betting? I'f I bet the Carnidals would win the world series days before it happened, I would except to make more money then people who bet after the world series was over. I didn't require first hand knowledge that they would win, I just sank the GDP of a small country into it and hoped for the best.
There's a record in many places now that I took a shit at 2:34 pm this afternoon because my cell phone went to the bathroom and sat there for awhile. Don't tell me there's no record whatsover of this transaction - no IP's, no logins, no accounts, no record of transfer, no trace at all? This has noting to do with speed of light or 7 ms, it is clearly about someone greedy trying to be clever and using information that they shouldn't have yet but did and thinking no one will notice. An announcement can't be received and understood and acted on in less than 7 ms, it's similar to Lt. Gov. David Dewhurst of Texas taking a vote after the deadline and then having the timestamp changed after the fact hoping no one would notice. So, who is it? Let's put a name on this!
just to be clear, you're saying that more than 1 in 5 people in america is currently unemployed? (23% right? nearly 1 in 4 people?)
I expect not. They don't seem to ever seriously prosecute any other malfeasance in the executive branch. Instead, the executive branch seems to be getting bolder and bolder in terms of transferring money to their buddies in industry, with "stimulus packages", "bailouts", and various fed manipulations.
All we really have to do is stop electing people that give our money away on such fraudulent schemes. By the time anybody investigates, the money is long gone and they'll just put on a show trial for a fall guy.
My point is that blaming "big bad corporations" and "Goldman Sachs" is pointing the finger at the wrong people. Those people may be taking money that they know isn't theirs (but they are little different from unions or middle class families in that regard who are being paid off for their votes), but the real culprits are the people that are giving our money away in the first place.
This is simply a case of entangled photons, one in DC and one in Illinois, reacting to each other instantly.
http://en.wikipedia.org/wiki/Superluminal_communication
Bram Stolk http://stolk.org/tlctc/
The news was released at 2PM on the dot. The news take 7 milliseconds to travel to Chicago. No one in Chicago should know the news prior to those 7 milliseconds.
The problem is someone in chicago placed an order based on the news 2 to 3 milliseconds after 2PM, before the 7 milliseconds it takes the news to travel there.
Therefore, someone new about the news prior to the 2PM release.
Insider news and someone just made LOTS of money.
No leak would allow someone to time those trades so precisely. there may have been a leak, but there was also something done to make it possible.
Oh come on.
You know what the fed is going to do in advance. (whispers and leaks)
You know it will be done precisely on time so as to avoid all appearances of favoritism.
You arrange for your trades to appear after the precise time of release, but fail to take into account the time for the announcement to get to Chicago.
Your trades go in after the announcement but before the notice arrived in Chicago.
A leak is the most obvious answer. A leak of several hours notice makes more sense.
Errors in atomic clocks invoke Occam's Razor.
Sig Battery depleted. Reverting to safe mode.
Computerized trading systems can be programmed to look at an announcement text and search for certain presumed to be significant keywords, then "near instantly" make a speculative trade based on the presence of those keywords in the announcement.
The problem is, this computerized trading system apparently received the text and made the decision faster than the speed of light would allow.
Not possible. Sounds like fraud.
Where are we going and why are we in a handbasket?
As little as a case of insider trading would surprise me here --and the possibility really needs to be investigated-- there is a non-cheating explanation.
Apparently, guessing *against* commonly expected outcomes, such as the Fed's move on the interest rate here, can often be a position that is relatively low-risk and high-reward. If common expectation had been correct, the trades will result in a loss, certainly, and this has to be mitigated. But if the counterintuitive position is correct, and your position is the first one to be right, you can win very, very big.
Insider trading is undoubtedly possible. However, I find it suspect that a person with both the inside knowledge and access to both the information AND HFT would also overlook such a fundamental tell off an otherwise very well-planned and executed fraud.
Speaking historically, there's never been a direct correlation between the economy and the stock market. There's been times where the economy does well but (in the short term) the stock market goes down. You simply can not say that this is the reason why the stock market and GDP currently don't directly match each other.
Slashdot: providing anti-social weirdos a soapbox, since 1997.
you do realize that 50% of all engineering projects get canceled before completion don't you? That's right, 50% of what you do is nothing but hot air.
I'd prefer a heartbeat system. All the trades submitted between 12:00:00 and 12:00:05 are collected and processed and the results released at 12:00:06. Repeat every 5 seconds.
(I use 5 seconds for illustration purposes, I have little idea what the appropriate cycle period would be.)
Quattuor res in hoc mundo sanctae sunt: libri, liberi, libertas et liberalitas.
It's no big deal. They use Monster Cables.
No, but neutrinos could "shortcut" through the earth (straight line) instead of taking the long way (along the surface, or worse, via radio and bouncing off the heaviside layer, so that would be a fair way to get the news faster. Tachyon radio IMO *would* be cheating.
Look, it just felt that if it was going to be forced into being famous by those damned paparazzi scientists at the LHC, when it had spent the entire previous history of the universe toiling in obscurity providing substance to all the masses, that it at least deserved to be compensated for the hassle.
And you people act like it did a bad thing! Shame on you!
If (and only if) the trade occurred before the light-travel time from Washington, then (by special relativity) there exists a reference frame in which the trade occurred before the information was released in Washington.
It would be so fun to see this argument play out in court.
Quattuor res in hoc mundo sanctae sunt: libri, liberi, libertas et liberalitas.
"Deep" shit if you measure in nanometers. Hundreds of 'em.
You do know that most of the bailout money to Wall St and Detroit has been returned don't you? It's the money to back the mortgages that is gone (FNMA and FHLMC). So you should be pointing the finger at Congress who created the mortgage crisis, not the executive branch who cleaned up the mess.
> (Or should I be expecting a Whooshing sound any minute now?)
Yes.
> I suspect the answer is: the "Chicago Exchanges" have nodes on the low-latency Wall Street network.
No doubt they've got the most expensive, premium, low-latency network connection money can buy; you're right that far. But did you seriously mean to suggest that money can currently buy a faster-than-light connection? That they have negative latency?
David Gould
main(i){putchar(340056100>>(i-1)*5&31|!!(i<6)<< 6)&&main(++i);}
they love $ and the little girls
Your flame is pointed in the wrong direction! 1. Who the hell cares if some high-power bokerage shaved a few cents off the cost of a big transaction. Is that going to affect the unemployemnt rate or anything that you ranted on about? NO! If anything, some of those transactions actually made some money for some auto-workers retirement funds. Great! 2. Regarding your rant. How does someone making large amounts of money equate to kicking the poor? There is no mandate that rich people who use their wealth, political power, and intellegence to make more money are evil. In fact there are many who try to do good for their community. Of course their are some that abuse that power as well. The modern age has made educated people much more able to reap the benefits of that education. 3. Re: great empires fall. It's not just the elite that dont give a fuck about the poor. The poor dont give a fuck either. Just look at the voter regestration percentages. Only 57% of voters regestered in 2012 in the USA. Almost half of americans dont even care enough to decide their own fate. "Whateva" should be their motto. Reading the propositions and the candidate bios is just too much work! Its easier to just collect my unemployment check. Further proof: after 2008 financial crisis, what luxury did americans give up last? Their cable TV. Comcast shares went down, but their customer base just kept going up. Hey americans want their MTV. And that shit is expensive! Some plans rival a new car payment. -Walmart is another good example. Walmart did not brainwash people into buying their products. People flocked there because all people care about is me me me and the biggest TV they can afford on their credit limit. They didnt care if the as-seen-on-tv products really work, only bthat they saved $10!. They dont care if their imported vegetables were grown according to EPA standards cause they are only 99cents a pound!. 4. So yeah, the USA is in a downward trend, but thats to be expected, normal, and is even good in some respects. We made a ton of money by innovating, engineering factories and having a cheap labor force. We amassed a huge amount of money and have the luxury of buying many imported goods that no one else has access too. Now our currency is trading high so it makes it imposible to compete on manufactured goods. That is a great opportunity for other countries. Yeah some trade tarriffs wouyld have been nice to slow the decline but hey people want their cheap toaster, so everyone welcomed the 'free trade agreements'. yay. But things will normallize eventually as other countries become wealthy and start buying some of our stuff. Yeah it will suck for amny people but there is still a ton of opportunity in the US. It is still one of the best for human rights, infrastructure, environmental protection, and healthcare. I love this country and we should try to help each other personally, financially, or politically. Many ways to do each that accomplish more than raging about the rich.
oldhack: "Security is a waste of money until shit hits the fan. 5 minutes later, it becomes waste of money again. "
The QE3 effort AND this obvious leak are serving to line the pockets of the rich. SOMEBODY in Chicago walked away with a bit of cash in this deal, and just like the Quantitative Easing 1, 2 and 3 lined the pockets of the upper class. It is the policy of this administration to pay off their rich supporters, even though they SAY exactly the opposite.
Must be a sickness with the democrats. Remember Hilliary's miracle options trades when she made 10X the possible return on her investment in a day? Whitewater? Yet these are the same people who trot down to the Occupy Wall Street camp and act like they are somehow part of the common man, when they have used their office and political power to become part of the 1%.
I remember several years back, someone was working on running a new fiber cable between Chi and NY, that was a literal straight line. Or as straight as absolutely possible, in order to shave milliseconds off of communication times between the cities.
http://www.forbes.com/forbes/2010/0927/outfront-netscape-jim-barksdale-daniel-spivey-wall-street-speed-war.html
I'm sure the race to shave times hasn't slowed, since 2010.
"Politicians are interested in people. Not that this is always a virtue. Fleas are interested in dogs." P.J. O'Rourke
Yes, but would the resulting clocks be synchronized to GPS or UTC - after all, they're 16 seconds apart!
My Trimble Thunderbolt's oscillator runs at about 20 ppt (yes, that's 20 parts per trillion) accuracy, and
the PPS output is good to 2 ns.
So, what's a few milliseconds between friends, right? Well, I think that the gist of the discussion so far
leads me to believe that the SEC (and/or any other Federal agency that can/should care, sequester or not)
could revoke that trade and send the perp to the penalty box for a month or so.
My first guess:
With news like this there is probably a small amount of illegal embargoed-knowledge trading in the hours or minutes beforehand. This isn't enough to trigger an alert but it could be enough for someone to notice.
Another possibility:
Someone guessed the most common ways the announcement would be phrased based on possible meanings, and was able to make a fairly-accurate guess what the actual announcement would be before it was clear to the average listener what the announcement really was.
A third possibility: Quantum entanglement so the information "travels" instantaneously. OK, probably not this year, but in a year or two, that would move to the top of my list.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
No need for an atomic clock on every computer. NTP can only give you accuracy to within a few milliseconds, but PTP can give you better than 100us, albeit with some specialized networking equipment. A GPS receiver can act as the master reference for a facility, and give you absolute time to within tens of nanoseconds.
They Probably chose precisely 2pm. It took their system those two milliseconds to react.
I bet they never thought at all about the 7 milliseconds of communication delay.
The chose the first strictly legal time.
Sig Battery depleted. Reverting to safe mode.
Want to understand the dynamics of the economy? Track the level, velocity and acceleration of debt.
This might surprise you, but mainstream economists completely ignore the role of banks in issuing credit and the impact that credit has on the economy.
Now, I'm all for including the banking sector in stories where it's relevant; but why is it so crucial to a story about debt and leverage?
Paul Krugman
But there is an enormous correlation between debt growth and employment, margin lending and stock prices, mortgage debt and house prices. Changes in debt levels and asset prices create a feedback loop where each causes the other to change. Debt induces a euphoric blindness to it's potential downsides.
If you look at the historical trend in the level of debt compared to income, there was a big build up of debt leading up to the 1929 crash and ensuing depression. Plus the ratio of debt to income got even worse during the depression as income levels fell.
Leading up to the 2008 collapse of Lehman Bros. & AIG, we had far more debt than the 1920's. More debt than the highest peak during the 30's depression.
Most of that debt is not going to be repaid, it's simply impossible. So the only question that remains is, how we are going to manage not paying these debts. Are we going to continue waiting until everyone has gone bankrupt? Depressing the economy until debts are back to reasonable levels, while the population becomes increasingly desperate for a solution. Or inflate our way out by giving everyone free money to pay their debts with? Levelling the wealth distribution a little, which will of course annoy those who have been responsibly saving for the future.
Both solutions have morality questions, both solutions cause a massive disruption to the economy and fabric of society.
09F91102 no, 455FE104 nope, F190A1E8 uh-uh, 7A5F8A09 that's not it, C87294CE no. Ah! 452F6E403CDF10714E41DFAA257D313F.
Would never have guessed that Rick Berman had a Slashdot account. ;-)
Put the conspiracy theories away. This is simply a problem with server time syncronization. Everyone sees the word 'atomic clock' and assumes perfection. Precise time sync is a non-trivial problem made more difficult by cheap servers which drift. It would not be surprising at all that one (or more) of the news room servers was out of synch.
Further - why is everyone assuming that Chicago has the correct absolute time stamps on these trades? Again, time sync on multiple servers. Does anyone even have the error bars we are working with? Didn't think so.
No, I don't know that because it's false. You need to check your facts better.
I point the finger first and foremost at the home owners who bought homes they couldn't afford. But the administration certainly pushed for bailouts; instead of fixing the mess, it made it worse by creating a moral hazard.
I am not so sure about that ignorance factor. That whole network between NYC and Chicago for trading is timed down to the millisecond. Some trading houses try to locate as close as possible to the servers they communicate with just to shave milliseconds. It is well known stuff in that industry. John Batchelor (WABC-AM) did a few shows on it a couple of years ago.
Time Bomber the Book coming soon.
Trading firms are always competing for the edge in trading speed, and have their own inter-exchange private microwave networks. Microwave beats fiber, as the speed of light through the atmosphere is nearly c vs high-speed fiber at 60% or copper at 72%. This technology has made obsolete dedicated high speed fiber lines for trading, some of which charted new paths through dense Appalachian rock to achieve the shortest distance.
The Chicago Mercantile Exchange (CME Globex) already has one of the fastest links that can be constructed between it's colocation and the NASDAQ New Jersey data center.
Unparalleled Speed: Microwave connectivity provides customers the quickest market data delivery option from Carteret to Aurora – under 4.25 milliseconds (one-way) versus 6.65 milliseconds on the fastest fiber route.
What the article doesn't discuss is the exact nature of the electronic dissemination of the news. Chicago may have a time slew in it's time standard, or the release may have technically not been at precisely 2:00:00.0000000 - either could make an apparent time warp in the trade data. We would hope the article's author has done all the technical research before making an allegation that impropriety has taken place.
No, I don't know that because it's false. You need to check your facts better.
I would call 375 of $465 B TARP money most or maybe you just believe the voices on the radio.
I point the finger first and foremost at the home owners who bought homes they couldn't afford. But the administration certainly pushed for bailouts; instead of fixing the mess, it made it worse by creating a moral hazard.
LOL
Seems there should be an obvious way to determine what happened here.
People tend to forget that the stock market is only thematically linked to the economy. Once money is in 'stocks', it is not about how well any market actually does, but meta-thinking other traders... it is basically like fantasy football but with much bigger stakes.
If 99% of the 50% get cancelled in early stages and 1% get cancelled some other time before completion, then far less then 50% of what you do is hot air.
"Once Fed decision was announced, someone had to read or listen to it, digest it, and then make a decision."
Why?
SomeTHING had to process it, but why someONE? It is not such a hard problem to tame (except for the timing).
Simple: Add a randomized delay in the 100 second range before the order goes into the market and add a significant transaction tax. And do not allow any mis-trades to be retracted after that delay.
Ultra-fast trading is basically a fraudulent scheme were actors hope to gain advantage in a technological weapons-race. Nothing is produced, the gains are not justified in any sense and the whole thing has a destabilizing effect that is a real danger to society.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
"I suspect the answer is: the "Chicago Exchanges" have nodes on the low-latency Wall Street network."
For that to work, they should not only need offices at Chicago and nodes in Wall Street, they would also need Faster Than Light pipes in the middle.
"I point the finger first and foremost at the home owners who bought homes they couldn't afford."
Bullshit.
So when those tycoons are able to squeeze a business opportunity they are worthy their millionaire bonuses but when they don't do their due dilligence and lend money to somebody who obviously won't pay it back is the buyer's fault? Do you remember which part is the one with access to credit records, MBAs, staticians and all that stuff?
This a shared responsability scenario but the one with the biggest responsability is the one that controls the situation, and that one is the one with the money, not the one asking for it.
The players have done their work for the day.
My ism, it's full of beliefs.
You've got it pretty well nailed. The part you neglected to mention is, those getting curb-stomped are consistently voting for those doing the curb-stomping. Until that stops, nothing is going to change.
The problem is that somebody human would have needed to actually read this kind of information and then click "buy" or "sell" after the roughly 15 seconds to do a quick glance through the data with trades that are pre-programmed off of likely things found in such a press release. I suppose that you might have some very good artificial intelligence that can do a text parsing through a press release and glean that some key piece of information that would certainly be able to shave off a few additional seconds... there certainly is money to hire software developers to develop such AI systems too.
This really is a smoking gun that somebody got this data ahead of the public release, thus really set up the trades ahead of time. I agree with you that trades for other "hard data" which can be generated from common trade data (especially data generated by the stock exchanges themselves) is something that has brokers and traders investing in laser data links literally crossing Wall Street to shave the milliseconds or even picoseconds difference instead of using copper cables going up and down the buildings. Moving computers next to the exchange servers when possible is also done and other tricks too. None the less, some time simply must elapse in order for these trades to happen and be honest.
Someone already posted somewhere in here that the information within the release was available to a lot of people before it was released to the public. Now, combine that with someone who also has access to a trading account. Still quite a few people.
Time Bomber the Book coming soon.
Okay, an example from fiction: "Trading Places" the movie.
Time Bomber the Book coming soon.
Chicago to DC is around 730 miles. Your light flight time is just under 4ms alone over open air. Around 1ms more via a straight fiber.
There is always advanced artificial intelligence doing text parsing off of key word combinations and patterns. That is still some pretty beefy AI that would need more than a few thousand CPU cycles to process that information through. The data must also be sent across several busses inside of the computer chassis to be sent into the computer as well.
Most press releases and other documents from the Fed, while in English, have a pretty typical format and "standard" kinds of statements in those documents which can be seen from previous documents already in the public domain. While I wouldn't trust billions of dollars on such software arbitrarily deciding how to set up important trades, it certainly is something that has the potential of being automated and isn't even "new technology".
It would still take making some educated guesses about what kinds of potential things might be said in such a press release ahead of time and setting up each possible alternative. If the Fed would have announced something really off the wall like discontinuing the U.S. Dollar as currency or having the Fed become insolvent (just to suggest some really crazy possibilities as examples), these kind of trades would likely not happen and would require human intervention. Suggesting that they would or would not continue quantitative easing, raising or lowering the discount rate, or other more typical things that certainly were anticipated would be very easy to automatically spot.
How could you say a leak didn't occur, that ran something like "Blah blah blah, trade at 2 P.M. sharp". Or is that what you are implying?
Unequivocally the realest of the realz...
You are a tool.
Shoes for Industry. Shoes for the Dead.
That volume and volatility is actually a good thing though. With all of that trading up & down on so many issues of stock, it means ordinary folks who want to buy or sell shares of a company can easily do so because *somebody* is trading those shares. Hopefully when you make a move like that, you are more interested in what that company is going to do (or not do) over the course of a year or more instead of getting caught up in day trading where you are competing against this kind of action of the big boys.
Yes, it is the buyer's fault if he doesn't pay back his debts, nobody else's. Without government interference, the lender would simply have repossessed the home and eaten the losses. Instead, the government gave huge amounts of money to both home owners and lenders, and people like me who have paid off their mortgages have to pay for it through their taxes.
Bullshit.
The borrowers are adults; if they want a house and they borrow money for it, it's their responsibility to pay it back. The people lending the money don't "control" the situation, they are simply offering a deal in hopes of making a profit, and sometimes they make a bad estimate of the risk.
Bullshit reasoning like yours not only means that people are absolved from responsibility for their own actions, it means that gradually, we all lose our ability to make decisions on our own because the presumption is increasingly that nobody can be trusted to make financial decisions for themselves.
You apparently can't read and understand the articles you cite yourself. What's actually been repaid is $371bn of $608bn, leaving us $237bn short, and that's assuming even that that government accounting is correct. You cannot count the "revenues" as a refund, since we would have gotten those if we had used the money differently. But that's not even the whole story, since we paid interest and opportunity costs on that money. As a result, the whole bailout cost us dearly.
If this had been a Republican president, the press would be up in arms about his crony capitalism. Apparently, when a "progressive Democrat" spends hundreds of billions in crony capitalism (in addition to all the other evil things Obama has done), it becomes OK, for purely partisan reasons.
And investing is in my humble opinion the true value and purpose of the stock market.
It certainly isn't a universal opinion though, and not everybody trades on exchanges for the same reason. The actual investment happens for the most part when the IPO (or subsequent offerings) happen, and the rest is simply exchanging shares for perceived value in those shares.
Ultimately, the value of the company should be (but isn't always) the "market cap" of that particular issue. The problem is that events happen which change that value, thus the intense competition to be first to act upon even the most tenuous little piece of data. In the case of an announcement from the Federal Reserve (because of its position in the national economy and by design in terms of how the Fed is set up), it can substantially change the value of not just one but nearly every company on the exchange.
The growth of the economy and the growth of the stock market are totally different things. This is so basic I can't believe you even tried to make the connection. Two big things: the economy is much bigger than the stock market. Stocks are just the equity portion of companies; they also have debt (and usually much more debt than equity). Second, stocks theoretically include the value of all future growth as well. A 1% change in the economic growth rate might be a 10% change in the present value, as you can verify by summing the geometric series.
ntpdate.
like the users of ntpdate,you are on your own for the why part.
http://www.nanex.net/aqck2/4437.html
http://www.nanex.net/aqck2/4436.html
Also add an edit to this: https://en.wikipedia.org/wiki/Superluminal_communication
True, but that is still illegal and against SEC regulations for insider trading. This was the kind of stuff that got Martha Stewart into deep trouble, not to mention many other people who have been convicted on similar charges. What *should* have happened is that everybody possessing this information prior to the official release should have maintained an embargo on the information (in the case of journalists) and certainly not spread that information further. They are also criminally liable for anybody else they shared this information prematurely and it would have been a conflict of interest to even act upon that information.
As to if the SEC will even bother doing a formal investigation on this matter and even bother to file charges, that is a completely separate story. None the less, it is pretty obvious that somebody broke the law regardless. Since these first trades are patently obvious that they had prior knowledge, they would be easy targets to go after and burn a whole bunch of people in the process... if anybody in the SEC would bother.
My bet is that somebody in the Obama administration is going to claim that sequestration is the cause for no prosecution or investigation. It would be an easy out at least.
It is entirely feasible to parse the text and make a decision with no human in the loop in 1ms. In fact, this is what they do.
My God can beat up your God. Just kidding...don't take offense. I know there's no God.
Where do you get the 7 millisecond figure from? http://www.wolframalpha.com/input/?i=distance+from+washington+d.c.+to+chicago+%2F+speed+of+light+in+fiberoptic+cable says it's 4 milliseconds from Washington, D.C. to Chicago by fiberoptic cable.
At the nearest local bar south-west.
Thanks god I didn't trade my 100 shares at before or right after 14, I would've been considered as insider trader as well.
If there is a "culprit" it is most likely AlphaFlash (http://www.alphaflash.com/). They offer the lowest latency access to economic numbers in NY4 in NYC and Aurora in Chicago. Or there was clock skew. Many clocks in the world don't run on PTP.
The Fed shouldn't have been giving CNBC the info any sooner than they gave it to anyone else.
There's way too much potential for shenanigans for the Fed to be giving anyone an embargoed story.
I see even classic Slashdot is now pretty much unusable on dial up anymore.
In a global financial market, there are no non-trading hours.
There's always an exchange open somewhere.
I see even classic Slashdot is now pretty much unusable on dial up anymore.
Right after the event it was just millions. Then few days later - hundreds of millions. After that, about when slashdot and washington post got interested, it became "billions". Criminality level has obviously skyrocketed. On top of that, they obviously messed with the light speed. Somebody has to pay for this.
I recommend against that. The profit margin on these "news" style trades is so high that a tax would not impact them. A new tax will reduce volume, but it won't do diddly-squat about this particular issue.
Busted trades can hurt the cheaters' counterparties, so you are effectively punishing all market participants by doing this. Better to just force the cheating company to disgorge all profits from the trade. They can keep the position they acquired, but fraudulent proceeds go to the regulatory agency instead.
Oh for some mod points today.
Sara
Designer, Gamer, Macgrrl in an XP World
As long as the poor have a little food and the middle class have a little say those who have the most will always get the most.
The formula is well known and expertly played. It only fails when people are hungry enough and angry enough. That isn't happening - enough.
Could the individual or individuals in questions not have been in Washington but trading in Chicago? People do that kind of thing all the time. While it may be an advantage in their favor there isn't a thing that says they can't do that.
Light travels at 300 km per second. According to http://www.distance-cities.com/distance-chicago-il-to-washington-dc, the staright-line distance between Washington DC and Chicago is 957 km. Assuming the signal doesn't go through the earth, that's still over 3 ms.
Now will someone please explain to me how "someone" can collect on a trade and have it totally anonymous and untraceable?
For example, does anyone remember the millions of dollars in put options on airline stocks that were placed just before 9/11 (also placed at the Chicago Exchange)? Somehow investigators couldn't figure out who placed those orders. Last I heard the orders were traced back to an investment bank that CIA director Alvin Krongard had been chairman of. Then the investigations mysteriously ended with no one arrested and no one named as the person that placed the order. How is it possible for an order to be some untraceable?
Co-location of servers, high frequency trading, volume incentives paid by the exchanges to high frequency traders, order book stuffing followed by a 99% cancellation rate. If anyone but the insiders did this, they would be in jail. Can someone seriously explain to me the difference between what the proprietary trading desks do and what the Hunt brothers did when trying to "corner" the silver market. These guys should all suffer the same fate as Gordon Gekko.
The Almighty Invisible Pink Unicorn... erm, I mean Hand... moves faster than the speed of light.
sub f{($f)=@_;print"$f(q{$f});";}f(q{sub f{($f)=@_;print"$f(q{$f});";}f});
It's not faster than light. Washington DC to Chicago is about 950km, which by my calculations is just over 3ms as the photon flies. The "7ms" figure must take into account transducers and routers or something.
sub f{($f)=@_;print"$f(q{$f});";}f(q{sub f{($f)=@_;print"$f(q{$f});";}f});
Please don't listen to Truthers.
The 9/11 Comission did trace the orders back the investors and figured out what information motivated them to place the orders and what motivated the source of the information in the first place..
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More than half is most, fyi. He's right, you're wrong.
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In America, money travels faster than light, and has done for years. Nothing to see here. Move along please.
Sent from my ASR33 using ASCII
Or chjarge "stam duty" on the trades to make high frequency trading unprofitable, and feed a trivially small part of the "commissions" on normal trades to Joe Public. (As proposed in Europe)
Sent from my ASR33 using ASCII
Offices? Are you back to suggesting that there is a human making these millisecond-trades?
It's like in that old ghost story ... he's INSIDE THE HOUSE!
billions were traded in those milliseconds? whose billions? who gained and who lost in these trades?
You can't be this dumb! Seriously. If you are, please go and shoot your self in the head before you procreate, or as it would be called in your case, massively pollute the earth.
Seriously how the fuck did this garbage get modded up. The stock market is NOT nor has it EVER been a zero sum game. The stock market is little more than a glorified way to buy a piece of a company, the value of the shares is not zero sum, it is based on whether the underlying asset (ie, the company) is increasing or decreasing in value. You only got one thing right, and that is staying out of the entire market, someone with so little knowledge of how it works most definitely should avoid it.
You have described a very small pricing bubble. Yes, markets are frequently manipulated for a fractional profit. At worst, the dumb will have nothing and stop playing the stock market.
This is essentially saying the amount of money in the economy is fixed. The reason why companies have all sorts of creative accounting is so that they can claim a 4% growth in value. Which in turn changes the amount of money available. What also changes the amount of money is short selling. Yes, it depends on economic downturn or the afore-mentioned pricing bubble. But borrowing money changes the amount of money available, which is why debt is so popular. The US government does the same thing when it borrows a third of its income from itself. But governments don't have to repay themselves so it is invented revenue.
Expose and block cheating by randomly delaying the announcements by milliseconds. Good news is they'll find the perps by threatening RICO.
A human couldn't time it within 7 milliseconds.
If anyone thinks that milliseconds and even MICRO seconds don't matter in financial trading, they should check out the fascinating Radiolab story here: http://www.radiolab.org/story/267195-million-dollar-microsecond/
How about you make your decision and announce after the market it closed? The way it is now seems to be designed to give unfair trading advantage to people with better communications. ( I wonder if it has always been this way )
Y'all are funny. It's called "guessing". Trader made a guess that the fed decision would go his way, and he was right. If he was wrong, no story. He didn't stand to lose all that much money (relatively speaking), so he made a bet, and won.
Sometimes smart people (like you all) think too much.
You are forgetting the timings for:
Time to receive the press release
Time to parse the press release
Time to make decisions based on the press release
Route of the cable itself (hint: it's not a straight line, and likely goes through intermediate cities, which will have some buffering and queueing, however slight)
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
But a device like that costs thousands of dollars, that is like 30ms of profit.
Time to offend someone
Well, you have just proven how dumb you are.
It is NOT illegal to trade bonds on insider information. Period. There is nothing to prosecute here.
Martha Stewart got in trouble for lying to a federal agent, about something she was never guilty of to begin with.
Time Bomber the Book coming soon.
"Most" is his strawman claim and response. My statement was that the administration is responsible for a massive handout of taxpayer dollars, and I'd call $273bn a pretty massive waste of money.
In addition, the term "most" is ambiguous, meaning either "the majority" or "almost all". His strawman played on that ambiguity by falsely giving the impression that very little was not repaid, when in fact a lot was not repaid.
In different words, he and you are not even wrong; you're using strawmen and propaganda tools to mislead and manipulate.
I think you're right that the information got out ahead of time.
The scenario does, however, present an interesting question as to whether the information was non-public at the time of the trade. It's definitely arguable both ways. The cornerstone of the issue is if the information was "nonpublic" at the time of the trade.
Katten Muchin has a nice summary (http://www.kattenlaw.com/Insider-Trading-A-Primer-10-26-2009). They state, "Information is non-public until it has been effectively communicated to the marketplace. One must be able to point to some fact to show that the information is generally public." The standard is not whether the information could have reached Chicago in time, because we don't ask if the information is "fully public," but instead if it is "generally public." Possible knowledge in all of DC, Baltimore, and NOVA is a wide enough population to be generally public.
On the other hand, the standard of distribution often includes enough time for the "public" to absorb the information. No doubt the information was out well a head of time, but in judging public availability --- in 2ms was there enough time for a computer program to even interpret the text of the speech to determine if tapering was on or off? Likely not.
Anyhow, I just thought it was interesting as to whether the information was public/nonpulic 2ms after the release.
And you really think this is just about T-bills? Or that those security laws about insider trading only apply to stocks and corporate bonds?
You are partially correct but the reference device that they would be using would have one or more PPS lines that are driving the actual clock ticks on individual machines. A time frequency device can act as an NTP server but for really accurate timing requirements the devices are connected directly to the computer instead of the network. Once initial time is set the only thing the computer cares about is the PPS signal from the device since that will determine when to switch the second (or what ever frequency you have it serving up). Things like this aren't terriably expensive and an amature could build such a device for a couple hundred dollars. A GPS receiver that has dual PPS lines with one fixed to 1 pulse per second with the second one adjustable from .25Hz to 10HZz pulses with both PPS lines having an accuracy of 15ns runs about $70. Now granted that is just the receiver (need some brains to serve up NTP, a power supply, and antenna) but building a full device from it isn't that difficult and commercial devices exist that do the same thing and cost a few thousand dollars. So having poorly synched clocks is a pretty piss poor excuse given that those people care about micro seconds and probably have computers that are synched to within a few tens of nano seconds.
Time to offend someone
No, that's not what mortgages are. When you buy a house on a mortgage, you own the house and you owe on the mortgage. Stopping payment isn't just a business choice between two contractual options. The lender has the option of using your house as collateral, but that's at their discretion, not yours. In some states, they can go after you and your money to recover losses after foreclosure, and your credit will certainly get damaged. Lenders will usually let you get away with defaulting and foreclosure (and hurting your credit record) because it's not worth their time to do anything more, but that doesn't mean it's just an either/or for you.
Yes, I agree: foreclosures are a normal part of the real-estate market. They are what's supposed to keep lenders from making bad loan decisions, how the market is supposed to police itself.
What's "unsavory" is that the administration has been using tax dollars for preventing foreclosures. That is, people like me who made prudent mortgage decisions and paid off their mortgages are forced to pay increased taxes so that lenders who took unreasonable risks don't have to pay for their mistakes and that buyers who bought too much house now get their homes heavily subsidized with my money.
The other group of people who are being hurt are new home buyers, because by keeping foreclosures from happening and subsidizing home owners, the administration is keeping prices unreasonably high.
Martha Stewart got in trouble for her position as a member of the board of trustees for the New York Stock Exchange and manipulating that market to help "a friend" get some sort of special advantage. That she was less than forthright about what she was doing when pressed by a federal agent was her eventual undoing... hence the official "obstruction of justice" charge.
It was an investigation into insider trading though that got her nailed. I'm hardly sympathetic, although it is too bad that other people who do far worse don't get into legal trouble because they usually cover their tracks much better. Certainly members of Congress and their staffers, much less folks within the Federal Reserve do things that certainly amount to insider trading and manipulation of the markets.
Actually as others have pointed out depending on the area you may end up with a good 35% or better unemployment. I can tell you in my area businesses that were there for over a century are gone, my dad who has been in business since the early 70s is about to let his employees go and sell off the assets, and the business district is now a ghost town full of boarded up buildings.
So yes if you looked at the real numbers and not the bullshit numbers? We are looking at great depression levels of bankruptcy and unemployment. What pisses me off is in a time like this when the government actually should be helping folks a large chunk of the right wing have the "let 'em die!" attitude as seen in the RNC. So yes it really IS that bad, and that is not even counting the underemployed, that is just the jobless. again there are tents being put up in nearly every town in the flyover states and homelessness is exploding as those who can't find a job have their benefits run out and "magically disappear" from the official roles.
ACs don't waste your time replying, your posts are never seen by me.
If you're the sort of "investor" that needs liquidity on that timescale, then you're in the same boat as the HFT bots. Even day traders, which take a massive stretch of the imagination to call "investors", won't suffer from that loss of liquidity.
If you want a vision of the future, imagine a youtube comments section scrolling - forever.
LOL - Who said a human clicked the button? I am saying, if 2 PM was the agreed-upon (leaked) time, then it is pretty trivial to set up a routine to cron it out at the specified time. A: "Hey this is going down at 2:00 pm, be ready" B: "Just set up the script to trade at 2:00 pm, thanks" Simple.
Unequivocally the realest of the realz...
4. Because of this a massive stock market bubble has been blown which has already cost a trillion dollar bail out and when it pops it will make the great depression look like a flash crash.
I have seen a few places where guys have tried to crunch the numbers and no matter whose figures you go with you are looking at a worldwide depression and the USA economy dead for a good half a century or more. Look at the figures in the video taken from various government sources at the 3.30 mark and note that right before the 29 crash the market was at 125%, we are now over 403% and rising. You also have a huge sector built around the bubble, all those people will end up on the breadline when that bubble bursts as well.
I don't know which is scarier, that we have a bubble that big close to bursting or that the numbers I saw put it between 2020 and 2030 at the latest before no matter how much phony money the fed prints the bubble will no longer be sustainable and HAVE to burst. I have to wonder if that is why we are seeing more and more fascism in this country, the elite know this is gonna happen and are hoping the stormtroops will save their collective asses.
ACs don't waste your time replying, your posts are never seen by me.
There's likely at least one atomic clock at each physical facility and the time is synchronized at that facility using NTP. NTP has a resolution of 233 ps and network delays can be very well characterized over time. If you really care about proper time, as these folks likely would, you can have a separate physical network that does nothing but sync time and has no unpredictable traffic on it.
This stuff is all (relatively) cheap, too. My time server at home uses oven-controlled crystal oscillators disciplined to multiple time sources and it keeps time accurate to ~15 ns (even for the clients on my crazy wild uncontrolled wifi network, the jitter is measured in microseconds). And the whole setup only cost a couple of hundred bucks. Even atomic clocks aren't these big crazy lab instruments anymore (nor have they been for decades). You can buy nice little rackmount cesium clocks easily.
If you want a vision of the future, imagine a youtube comments section scrolling - forever.
Okay, so how is it that the identity of this FTL trader is not already known, and being questioned by investigators?
Seems like if you put in a random delay to every market transaction then you would make it much harder to do these sorts of things. I'm thinking each transaction would take a minimum of 1 second plus up to 3 seconds randomly generated using a secret key.
Not yours.
The reasoning and facts behind this are a bit subtle, and certainly counterintuitive to those of us who've grown up in a world of classical behavior, but that makes them no less iron-clad. Believe me, if communication faster than light (or, equivalently, into the past) were possible through this avenue, we'd be using it already -- subject, of course, to Niven's law of time travel.
It may have been legit (!). The rules* say "2pm by the National Atomic Clock", which is in Colorado. The distance from CO to Chicago is about 1019 miles, and to DC is 1681 miles. So Chicago can use the news 3.5ms earlier than DC.
* As gleaned from a handful of secondary articles on the story.
But the news originated in Washington DC, as they perceived 2PM. Either DC's clock was running fast or the trade was executed before the news was received. Either it was a gutsy $600 million gamble, or someone was in the know.
So you're saying you've never done distributed transaction processing, then? Though if this were really the case, this story would be particularly bad journalism.
Socialism: a lie told by totalitarians and believed by fools.
Really? So the Fed makes a decision. Who gets to know before two o'clock? The Fed. The news media. Either someone at the Fed leaked or someone in the news leaked through a mechanism currently not known. What is more likely?
No, that's just flat wrong. Liquidity decreases the bid-ask gap. That's effectively a cost on all transactions. Even if you trade a position once every 5 years, paying less when you do so matters. Market makers (and HFT in that role), make it cheaper for the little guy to trade. They aren't adding some cost, as people imagine. HFT is the ultimate in competition between companies, and that competition reduces prices for people like me.
Socialism: a lie told by totalitarians and believed by fools.
But the news originated in Washington DC, as they perceived 2PM.
No! It's easy to get this confused: the news originated in DC at 1:45pm; with instructions to journalists not to release the news until 2:00pm by the National Atomic Clock.
Microsoft KB2644321
My understanding is that the starting blocks in Olympic races detect when the runner starts, and if it's sooner than 1/10 second (or whatever) after the gun, they're considered too early off the blocks. So some kind of analysis like that every time, since this has probably been happening all along but was just discovered, might help.
But you're idea is better. An announcement that the decision will be released at some random time between 2 and 3pm and any significant trades jumping the gun are subject to investigation.
Unfortunately, regulation since the 60 Minutes exposé was (surprise!) not comprehensive and Congressmen can still legally use inside information for deals in some ways.
"I point the finger first and foremost at the home owners who bought homes they couldn't afford"
But not first and foremost at the lending organizations that had the analytic data to show that these prospective home owners ( all hyped up by the lenders about how this is a great rate, and real estate agents talking about how now is the time, the market seemed to be always going up, etc ) would not be able to afford said loan. And didn't do their due diligence in looking at the prospective home owner's income and debts....
There was moral hazard alright. And those home owners deserve to have a finger pointed at them. But not first and foremost.
emt 377 emt 4
If you need "analytic data" to figure out whether you can afford a mortgage payment, you should lose your right to engage in any kind of financial transactions. A fixed 30 year mortgage isn't hard to figure out, and if you can't afford it, you don't take it. And if someone tries to sell you anything else and you don't understand what they are selling you, you don't buy it either. I mean, have we become a country where the default assumption is that everybody is an idiot?
Furthermore, the lenders would have paid the price for their errors: they would have lost money on the bad loans. Instead, the administration first shoved billions in the hands of lenders who made poor decisions, and then shoved billions more in the hands of home owners who made poor decisions.
Warren Buffett has a great way to deal with these things. A 100% short term capital gains tax! We can just start with the investment banks, hedge funds, etc.
You talk about the news media as if they were some independent, unaccountable body. But where does the new media get this information from and why? Who, in fact, is "the news media", other than a select group of journalists that the fed wants to influence?
No matter how you look at it, the fed screwed up. They made the decision, and it is their job to make sure that everybody gets the information at the same time and there is no insider trading.
Of course, this is really just a symptom of a deeper problem.
Like I commented before, Warren Buffett says the way to solve these things is a 100% short term capital gains tax. (We can start with securities held for under a year or any transactions by investment firms, hedge funds, wall street, etc.)
Discourages gambling/market manipulation/bubbles and encourages real growth and investment. So simple it's genius. This is what the Occupy Wall Street people should focus on.
Sounds like a sniping program like those used for eBay purchases.
Sounds like a sniping program like those used for eBay purchases.
"If you need "analytic data" to figure out whether you can afford a mortgage payment, you should lose your right to engage in any kind of financial transactions. A fixed 30 year mortgage isn't hard to figure out, and if you can't afford it, you don't take it. And if someone tries to sell you anything else and you don't understand what they are selling you, you don't buy it either. I mean, have we become a country where the default assumption is that everybody is an idiot?"
It is very easy to say all that, but life is a bit more nuanced than that. You expect to have some raises and better opportunities before the rates reset on adjustable mortgages.
And if all the above is true ( and it basically is, except for human want/greed ), then how much more true is it for the lender? They didn't have to loan the money. So, still, the first and foremost finger gets pointed at the lender.
"Furthermore, the lenders would have paid the price for their errors: they would have lost money on the bad loans. Instead, the administration first shoved billions in the hands of lenders who made poor decisions, and then shoved billions more in the hands of home owners who made poor decisions."
Except the lenders who made the decisions sold those loans on down the river, and the loans were all cut up into CDOs 7 ways from Sunday. So the decision makers would rarely have paid the price ( except those deciding the buy the loans from the originators ). So, since those companies demonstrably did not understand the instruments they were selling/buying, don't they deserve blame?
Bear in mind, I am not arguing that homeowners deserve no blame. But that the lenders should get a large share of that blame.
emt 377 emt 4
"If this had been a Republican president, the press would be up in arms about his crony capitalism."
TARP was instituted by a Republican president.
emt 377 emt 4
"The borrowers are adults;"
Yes, and so are the people doing the loan origination.
" if they want a house and they borrow money for it, it's their responsibility to pay it back."
Yes, quite true.
"The people lending the money don't "control" the situation,"
They do control the situation, more than any other actor involved.
"they are simply offering a deal in hopes of making a profit, and sometimes they make a bad estimate of the risk"
But the home owners ( with less data ) cant make a bad estimate of the risk?
emt 377 emt 4
Only stormtoopers are so precise.
THL phish sticks
That's also not true. Of course if a company isn't making profits, owning a share of the company will be worthless. However, shares are also priced on predictions of future performance, while GDP is an attempt to quantify the actual amount of economic activity.
It's a silly example, but imagine a Mr. Fusion reactor was invented tomorrow, allowing cheap limitless energy. The GDP wouldn't actually change tomorrow, it would take perhaps years for the invention to get produced and the economy adjusted. However that very day the stocks of oil companies would plummet, the stocks of energy-intensive industries like manufacturing would rocket - all based on predictions of future earnings.
In Accounting theory there's a concept called Semi-Strong Form Efficiency which basically suggests that the markets will indicate the nature of as-yet unreleased information. In other words, tacitly acknowledging that the volume of insider-trading is high enough to detectably move the market.
I have been a user for about 10 years. This ends Feb 2014. The site's been ruined. I'm off. Dice, FU
*slashdot activity drops as people go off to search for Jamie Lee Curtis videos....*
I have been a user for about 10 years. This ends Feb 2014. The site's been ruined. I'm off. Dice, FU
TARP was authorized by Congress under Bush, but it was the Obama administration that decided if and how to spend the money.
In your financial planning, you also need to expect that you lose your job, that you won't get a raise, and that you get sick, and plan accordingly. Well, you used to have to do that. Now, of course, increasingly, you just take whatever risks you like and can expect to get bailed out.
There are different people who claimed to have been aggrieved.
Home "owners" claimed to have been talked into mortgages they couldn't afford, and they complained about "losing their homes". But home owners weren't harmed by foreclosures: they were simply kicked out of homes they never really owned in the first place. Yet, the administration tried to make it possible for them to stay in "their" homes, at the cost of everybody else. That's wrong.
Lenders made a lot of bad loans, loans they shouldn't have made. They were blackmailing the administration by saying that it would be really bad if they failed. But fail is what they should have done because they made wrong choices. Instead, the administration bailed them out.
I think we sort of agree, I'm just making a finer distinction. Homeowners are to blame for "losing their homes". Lenders are to blame for making bad loans. And with just and rational economic policy, they should have faced the consequences of their bad choices.
Instead, the administration took money from companies and individuals who made prudent decision and handed it to these losers. So I blame the administration for penalizing me for prudent financial choices, wasting my money and keeping housing prices artificially high.
And the rational choice for me is to take bigger risks in the future too and rely on the government to bail me out. I should buy that $2M mansion in a flood plain; if it floods, FEMA will bail me out, if can't make the mortgage, the administration will help me or I can walk away. And if it appreciates, I take all the profit. That's the kind of behavior that's currently being rewarded by politicians.
No, they don't. Banks can't force you to take a mortgage against your will. You are the only person to decide whether you want to take out a mortgage and whether you like the conditions offered you. Nobody actually needs a mortgage; you can rent or save. When it comes to mortgages, the borrower is in complete control.
Home owners have perfect information, control, and complete data about their financial situation.
Part of the problem with the crisis was that lenders didn't get that information or weren't even supposed to use it as a matter of public policy.
Ok, for those of you that didn't RTFA,
The way it works is this deadline for public release 2:00 PM.
The reporters are ushered in to a locked room at 1:30PM
They are handed the report at 1:45 pm, giving them time to digest the complex report and write a summary of it for release to the outside world at 2:00 PM.
They can call their newsrooms just before 2:00 PM just to have the line open before 2:00 PM.
If CNBC really did transport it out of the locked room before 2 pm that sort of goes agains the spirit of keeping everyone in a locked room.
Well.. maybe. Or Maybe not. But Definitely not sort of.
But the news originated in Washington DC, as they perceived 2PM.
No! It's easy to get this confused: the news originated in DC at 1:45pm; with instructions to journalists not to release the news until 2:00pm by the National Atomic Clock.
I see what you're saying, that maybe the trade in question was triggered by a news source in Chicago releasing the news at the correct time, and the trader watching that source instead of the "official" source from DC.
But what source would that be? I'm picturing "journalist" as reporters from the WSJ, USA Today, etc. Is there some trade group in the financials circle of Chicago authoritative enough that traders would trust to the point of executing $600 million trades on their opinion? Stranger things have happened...
TARP was proposed by Paulson and backed by Bush.
Bush signed it on Oct 3 2008.
Provisions on how the money was to be spent were part of the bill.
I do note that there was an initial 250 billion
then another block of 100 billion, as authorized by the president ( which I seem to find as authorized in october of 2008. ).
and a third block, authorized ( well, not vetoed ) on January 15, 2009.
I show those dates during Bush's administration. With Bush knowing either McCain or Obama would be in office next.
I dont know, but if the first and second blocks were not spent, why would the third block have been allowed to go forward?
emt 377 emt 4
Sort of agree, sure.
I see the same behaviour on the part of some lenders also.
They were quite prepared to profit from these transactions.
I think that is what sets me off about this, is that the lenders had a better, aggregate view of what was going on, and the totality of risk that was being entertained that ordinary home owners just could not have had, in general. They could evaluate ( and have to deal with ) their own risk taking, but but could nto know how much even their immediate neighbors were taking on in terms of risk, leave alone a bigger picture above that.
But I agree, those lenders should have failed. And the home owners should have been foreclosed.
emt 377 emt 4
"Banks can't force you to take a mortgage against your will."
Never said otherwise. What I am saying is that the lender had choice in the matter.
The lender has more control over the mortgage than the homeowner.
"Home owners have perfect information, control, and complete data about their financial situation."
True, for their situation. ( I could quibble about the "perfect", bonuses, layoffs, etc, but substantially, yeah ).
"Part of the problem with the crisis was that lenders didn't get that information or weren't even supposed to use it as a matter of public policy"
I went for a home loan in roughly that time frame, and I was asked for all that information. My rates were set based on that information.
I have heard the claim that lenders were not to ask these things, but I have seen nothing to substantiate that. ( do you have information to the contrary? )
So, as far as I can ascertain, they had a perfect right to ask and expect that data.
emt 377 emt 4
Come on folks - its a tweaked version of the reviled sniping software that has killed real bidding on ebay. Milliseconds before the auction closes a magic winning bid is placed. No human intervention required. Just like this "trade", timed & executed by software based on foreknowledge That's discoverable.
Then who was FTL phone?
Is all that's going to happen. Just more of the same, members of the 1%'s ever increasingly desperate drive to become 1% of the 1%.
What SHOULD happen is extremely simple.
1. Follow the money. It's not hard to know WHO made these transactions
2. Prosecute the cunts with extreme prejudice
Enough blah blah.
Problem solved.
Casteism
No matter how you look at it, the fed screwed up.
OK, so what was the nonsense about "Obama administration" about then? You do know that the fed is not the Obama administration right? You also know that the current fed chairman was appointed by an administration other than the Obama administration, right? So are you spelling deficient or knowledge deficient or are you one of those retards who thinks this current government is far worse/far better than the previous government? Hint: The similarities are far more numerous than the differences.
You do realize that your: "ultimately it's the administration that is responsible for leaking this information" directly contradicts your "the fed screwed up", right?
Hint: up to a certain level, even deadly weapons are fired by computers, preauthorized by humans.
Speed of light was proven to be a myth. Not interested?
Wow, you're really grasping at straws here, trying to exculpate the administration. The adminstration is responbile for supervising the fed. It should be preventing such leaks, and when they occur, it should be investigating aggressively. Of course, it isn't going to do that.
And my point is not that the Democrats are doing something that the Republicans didn't do, my oint is that their holier-than-thou attitude is bogus. Democrats are in bed with big business and the financial industry just as much as Republicans were. That's important to remember when they propose legislation, because whether it's financial regulation supposedly protecting the little guy or health care laws supposedly insuring everybody, in the end, the people get screwed and administratiion friendly corporations win.
I think some guy just hit his enter button when his cell phone beeped and it was time to make a trade. ;)
SCORE!
Wow, you're really grasping at straws here, trying to exculpate the administration.
Funny. So you are claiming that a system that has been in place for donkeys years is broken by the current administration, even though it has basically done nothing at all to change it? Seriously?
Here's what (probably) happened, and it wasn't illegal in any way.
1/ News organizations get the information prior to 2pm, but the information is embargoed. No releases prior to 2pm.
2/ One or more news organizations transfers the information to their Chicago office. Embargo still in place.
3/ The news organization in Chicago releases the information at 2pm exactly.
No crime. No issue. Nobody got information faster than the speed of light. Nobody broke the embargo. The embargo says when information can be released, but doesn't limit the release of the information to a specific physical location.
"Banks can't force you to take a mortgage against your will."
Do you imply that lenders can force the bank to offer the mortage, then? Yeah, so I thought.
"You are the only person to decide whether you want to take out a mortgage"
And the bank is the only entity to decide whether they want to sign off a mortage.
"When it comes to mortgages, the borrower is in complete control."
So you mean they can get a mortage even if the bank doesn't want to? Yeah, so I thought.
"Home owners have perfect information"
They can produce an exact calculation of their financial risk because they have access to statistical analysis of the market -both the borrowers and the real state, they can analyse the economic and labour trends, etc. Much better than Fannie Mae et al. Yeah, sure.
"Part of the problem with the crisis was that lenders didn't get that information"
They didn't have access to lenders' credit record, job status, other financial loads... oh, wait!
http://low-latency.com/article/groundbreaking-results-high-performance-trading-fpga-and-x86-technologies#!
Get out of your idiotic partisan mindset. Nowhere did I say that the "current administration broke it".
What I am saying is that the system is corrupt and favors big businesses and has been for a long time. The current administration is particularly hypocritical, however, because they are claiming to help the little guy and fight against big businesses, when they are just as corrupt as previous administrations.
In addition, your scenario doesn't explain what happened: someone placed a big trade before they could have. Traders must have received the news before 2pm because making the trade involved manual intervention.
Are you daft or something? You claim that borrowers are harmed by taking out loans they can't afford to take out. However, that harm is entirely under the borrower's control: either they choose to take the loan or they don't. If the bank chooses not to offer them a loan, they aren't harmed in that way. Therefore, any harm that comes to the borrower from a risky loan is the borrowers sole responsibility.
If you can't decide for yourself whether a loan is too risky for you and take it anyway, you deserve to lose all your money and go into bankruptcy. That's the penalty the market exacts for stupidity and imprudence.
Likewise, any harm that comes to the lender from offering a bad loan is the lender's sole responsibility. If the lender makes too many bad loans, he should go into bankruptcy. Again, that's how the market penalizes lenders who make bad decisions.
The problem is that the administration has absolved both borrowers and lenders from their responsibilities and is using everybody else's money to help people who made bad financial decisions. That means that these people, people are now continuing to make bad financial choices, harming everybody else in the process.
The way "program trading" works, if the authorities dig into this, as they should, they are likely to find that the same traders placed bets both ways, knowing the time of the announcement, and cancelled the losing bet and kept the winning one. It's market manipulation and plain old theft, but since millions of dollars were made it is unlikely that the perpetrators will actually be called to account in civil much less criminal court as they should if the government were honest. The honest traders can't compete in such a rigged market, and we need to take a hard look at whether to allow such bets in markets everyone knows are going up, too, while we're at it.
Get out of your idiotic partisan mindset
Wow.
Nowhere did I say that the "current administration broke it
Time for your meds again: "Obama administration ... ultimately it's the administration that is responsible for leaking this information-
I hope you get well soon, I have heard the recovery time for brain-removal surgery is difficult.
Are you reading impaired or something? I accused the current administration of hypocrisy for doing the same thing that previous administrations have been doing for a long time.
I wouldn't know, but obviously you do.
bastard sniped me.
The only part of your post that attempts to answer the actual question is your first sentence. The rest is all sociopolitical whining.
/me looks for somebody else to explain what happened
Unity? Screw that: XFCE. Slashdot Beta? Screw that: SoylentNews. Australis? Screw that: Pale Moon. UX developers DIAF
It was Hiro Nakamura
Put that 401k on Red, it's a sure thing!
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Oooh! Sorry, that's how it goes. The House (and Senate) never loses.
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Place your bets... C'mon, grannie needs a new pension!
I believe it is possible to cancel a trade shortly after it is made. I'll bet the people involved just made opposing bets at the exact moment, delayed by just a couple of milliseconds, that the announcement was made. A few miliseconds later, when the news arrived in Chicago, the losing bet was canceled.