Thursday, May 6, 2010

Trading Glitch? Want To Buy A Bridge?

Trading Glitch?
Incorrect Entry?
Fat Finger?

Don't believe the hype.
The MTM is completely captured in Wall Street's Casino Capitalism's Skynet web of lies. Wall Street is just one giant elitest casino to serve the purpose of the crony bankers and politicians.

All afternoon we heard from CNBC, Fox Business, and Bloomberg that a staffer typed in a "B" instead of an "M" and caused this scary slide in prices. Let me tell you this. If anyone is stupid enough to believe this then you deserve to be fleeced and looted the rest of your lives. Take it from me a former trader. This is utter crap. If you believe this then you must also believe in the following:

-Easter Bunny
-Santa Claus
-Lochness Monster
-Abominable Snowman
-The Boogeyman
-Candyman - Please stand in front of a mirror and say Candyman 3 times.

One must also think that what is good for Wall Street is good for the rest of the economy as well.
Can one tiny keyboard stroke at a huge Wall Street firm possibly make this type of mistake? If it was that easy we would see it more often. You cant tell me that one mistake would cause $1T in losses?

The entire stock market gain since March 2009 was orchestrated by the Federal Reserve Board and Treasury via their proxy - Wall Street. This was no different than what we saw in August 2007 when all of the quants got blistered. Each and every one of the PD's were in the same trade. They all owned the same asset classes. The Algo's were all programed the same way. When the correlation of all risk assets =1 any slight cough becomes a bad cold. The HFT systems all caught the same infliction at the same time, and what probably happened is computer programs were triggered and started selling off since volume in the market has been low virtually throughout the entire one year rally. Liquidity is never there when you need it.

As anyone can attest to, when I was covering all of my shorts at around 2:45pm, I happened to log into my Etrade account. I loaded my buy to cover orders and hit send. What I got back was  not one but two warnings. Do you want to submit this order? Or you sure you want to send this order? You telling me that the fancy sophisticated order entry systems at the PD's don't have this? Preposterous!

The MTM will believe anything that the crony capitalists tell them because without them Joe Kernan and Becky Quick are washing cars and waiting tables.

Lets take a further look at the so called "Fat Finger Error". Was it a futures trade? Not really as it makes no sense. If it was every stock in the SP 500 would have been equally hit hard. Some stocks didn't go down while others like PG and ACN did. I am not saying that futures were not involved, but I am thinking that some hedge fund was long some stocks and needed to liquidate. This liquidation took on a life of its own as all liquid stocks got hit. The Algo's then just went and did their thing in perpetual self awareness mode. Where is Christian Bale when you need him?

I just cant imagine that one trader can put in an incorrect trade. These systems  must have stop gap error detection systems. I have worked on trading desks on Wall Street for 12 years and in that time I have never seen an error of this magnitude, this is because it can never happen. We all make errors but not of this magnitude. People get thrown out of windows for stuff like this. I have traded bonds, derivatives, and swaps my entire life and every trader has a position and execution limit. If they don't they risk blowing up the company and market. Just imagine if instead of an "M" he typed in a "T"? The market would have gone to 0. This is so bottom line jaw dropping stupid reasoning.  Every trader has risk parameters and execution limits. You actually think a Citi, GS, MS, and or JP would allow someone to trade without them?

This is just another snow job that the crony elite bankers are trying to convey to the masses. They don't want the public to realize that the markets are a total scam. That the only ones trading are the machines. Market volume has steadily dwindled since last year, because the broader public have already been washed out of the market. There has been zero retail participation in this rally.  Money has been exiting equity funds and going into bond funds at a huge pace, yet equity prices have rallied 80%? This is because the Government is funding the the PD's and having them speculate in equity futures.

Another theory my friend was alerting me to was that some Algo's are programmed to sell when certain correlations are met or crossed. One of these can be the fact that the Yen had surged vs the dollar. There was a huge gap up in YEN/USD.

All in all the market came back from the brink. It still finished down 347 points. Tomorrow is Non Farm Payrolls. If that figure doesn't print above 100,000 job additions, we are probably going to see huge losses as bond prices, Gold, and the USD will likely go much higher.

The Nikkei is currently down over 400, but the Hang Seng is rallying off much lower levels. We will have to see how China and India trade.

Europe is a total disaster. I believe those markets gap down violently and get slaughtered.

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