On a day when I’ve already written for nearly four-and-a-half hours – on this morning’s commentary alone – with the prospect of an equally angry, aggressive RANT this afternoon as we conclude day two of the “three days of terror,” I’d like to stamp closure on the demise of the CRIMINALS at Knight Capital Group.
Given that I referred to it yesterday afternoon and this morning already, there’s no need to “intro” with my March 26th RANT, “GOING BATS!” – in which I reiterated my belief that murderous, fraudulently executed ALGORITHMS were DESTROYING markets, as much as government intervention. Of course, given that Goldman Sachs (20% market share of ALL High Frequency trading) and the PPT itself are the largest market participants, it’s safe to say the majority of “algos” are either government initiated or funded. Some – like those attacking mining shares and the ETFs GLD and SLV – are utilized solely to manipulate prices; while others were created simply to STEAL YOUR MONEY.
This morning, I wrote the following of my experience over a decade of stock trading, before abandoning equities FOREVER – with the vile scum at Knight Capital…
I know this disgusting firm ALL TOO WELL. From having traded countless small-cap stocks in prior lives, there is NO DOUBT this ‘esteemed’ company was one of the biggest stock manipulators on Earth; and thus, outside the inevitable bankruptcies of Goldman Sachs and JP Morgan – NOTHING will make me happier than these SCUM reduced to rubble.
…followed by the following commentary from this morning…
IMMEDIATELY afterwards, the firm announced it was “pursuing strategic alternatives” – in other words, BANKRUPTCY; and that was it for the stock – FOREVER. I cannot begin to speak of the catastrophic, irreparable long-term implications of this bankruptcy – to equity markets WORLDWIDE – but will certainly try in tomorrow’s RANT.
Yes, Knight Capital – or as stock traders are more cognizant of, its trading moniker, “NITE.” By far, the largest market maker of small cap stocks, and in recent years a MAJOR player in the FAR MORE criminal world of High Frequency Trading. Literally, a firm representing the demise of the once great American empire. Too bad it didn’t create complex derivatives as well, as it could then claim to be involved in every major criminal operation on Wall Street!
Then again, it won’t get the chance, as it will likely be BANKRUPT before the ink is dry on this RANT. All one needs to do is watch this video depicting how the firm lost $440 million in one day…
Broken Market Chronicles: Algos Gone Autosell Wild – Video Explanation Of What Happened
…or in reality, FAR MORE, but for the arbitrary NYSE decision to cancel trades in the stocks NITE’s “rogue ALGOS” moved more than 30%…
NYSE To Cancel Trades Beyond 30% Band From Opening Price In Various Stocks
This RANT is titled “NITE JUSTICE,” intimating some sort of positive result for society. Unfortunately, nothing could be more incorrect. I highly doubt NITE’s executives will be prosecuted for their crimes – er, “mistakes” – but you can bet the investing public will suffer greatly. As NITE was the largest market maker of small-cap stocks, the “liquidity vacuum” that will form under these issues will be louder than Ross Perot’s “giant sucking sound.” For investors holding such stocks, say goodnight to your money, and for the company’s themselves, good luck EVER getting funding again. In other words, care of more Wall Street crime, the PUBLIC is most negatively impacted.
I’m THRILLED that the reasons for avoiding stocks have grown exponentially overnight, sucking whatever remaining capital is left out of the fraudulent PAPER financial markets. That is, after, Global Meltdown III – i.e., “the Big One” – takes care of the rest. However, yet again, society as a whole has decidedly LOST to a cadre of CRIMINAL bankers!
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What if this wasn’t a mistake? How would or perhaps WHO would benefit if this wasn’t a mistake?
What if Knight was going bankrupt anyway from some other illegal activity or just incompetence and they wanted something to blame it on other than what really happened?
Is there some other news story that we are meant to be distracted away from by this Knight story?? There are many speculators that MFGlobal was Jon Corzine being called up on by Government Sachs to fall on his sword to keep a comex default from happening with the agreement that he would never be prosecuted and the added bonus that JPMorgan would get to loot the client accounts for over a billion dollars to keep their losses secret for a few more months.
Computer “glitches” have been blamed recently for some long term bank holidays lately too. I am suspicious of these “explanations” and wonder what they are really doing.
This may be what it seems, however, it may not. Any speculations on alternate theories Ranting Andy?
You are speculating on such events without proof, although ANYTHING is possible in the fraudulent world we live in. In most cases, Occam’s Razor is the best method of analysis – that is, the simplest answer is the right one. From that angle, neither MF Global nor NITE were anything more than fraudulent businesses being exposed, which tends to happen over time.
To start with, I would hardly say Corzine fell on his sword, as he has not been arrested, and is still living the high life. As for NITE, they had nothing to do with PMs or other “sensitive markets.” They were simply market makers and algo providers, raping and stealing from the public, away from the “radar” of the true society-killers, the TBTF banks.
As for computer “glitches,” that is a different story entirely. I have ZERO doubt the RBS, Nat West, and other bank glitches (Italy, Russia, etc.) had to do with liquidity issues, eventually “resolved” behind the scenes with free PRINTED MONEY bailouts. The glitches will continue to expand until they grow out of control, taking the system down, IMO.
“All one needs to do is watch this video depicting how the firm lost $440 million in one day…”
Actually, Andy, it was even better than that with the rogue algo running wild for a mere 45 minutes… if the news stories on this can be believed.
Personally, I found this whole episode HILARIOUS! At last! Some HFT scumbags have been hoisted upon their own petard. How fitting is that? Very, IMHO.
From a certain point of view, NITE was found guilty of incompetence on Wall St. and has been financially executed. In that world, it just does not get any better than that. 😀
Agreed, and this is just the tip of a TITANIC-sized iceberg!
I used to work at Knight in their IT Dept and I have a pretty good idea where the F*ed up occurred.
The problem with Knight’s tech is they got too many shmucks running IT. They won’t promote the ones that built their system and keep their knowledge and resource in-house and they keep hiring cheaper inexperienced labors to watch mission critical systems.
They got what they deserved for running an IT sweat shop.