Skip to content
 
If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(Bloomberg)   JPMorgan-Chase admits they rigged the gold and silver markets but here's your money, peasants   (bloomberg.com) divider line
    More: News, Opera, support team, inquiries, Terms of Service, reference ID, information, message, browser  
•       •       •

1078 clicks; posted to Business » on 29 Sep 2020 at 6:14 PM (9 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



25 Comments     (+0 »)
 
View Voting Results: Smartest and Funniest
 
2020-09-29 2:44:20 PM  
and this is why we could have a war.
 
2020-09-29 6:19:41 PM  
At least them made them go on record admitting it.  Usually they pay up and never have to cop to any guilt.
 
2020-09-29 6:19:54 PM  
And that's why I only invested in Dogecoin.
 
2020-09-29 6:26:45 PM  
Can someone explain why this is a bad thing and they ought to pay penalties? Ohh wait, rich people lost money because they and their programs suck at trading.
 
2020-09-29 6:29:29 PM  
So my limited edition crying American Indian gold plated coins AREN'T worth $200 each...?
 
2020-09-29 6:32:01 PM  
The Hunt brothers point and laugh.
 
2020-09-29 6:33:37 PM  
None of these mofos play by the rules. Ever. 2008 out front should've told ya that.
 
2020-09-29 7:13:41 PM  

Stibium: Can someone explain why this is a bad thing and they ought to pay penalties? Ohh wait, rich people lost money because they and their programs suck at trading.


What did they actually do? I can't make out what they did other than take advantage of automated trading.
 
2020-09-29 7:22:35 PM  

The_Homeless_Guy: Stibium: Can someone explain why this is a bad thing and they ought to pay penalties? Ohh wait, rich people lost money because they and their programs suck at trading.

What did they actually do? I can't make out what they did other than take advantage of automated trading.


Sounds like the same kind of stuff the guy who caused the flash crash did, but without being so obvious about it.
 
2020-09-29 7:25:09 PM  

The_Homeless_Guy: Stibium: Can someone explain why this is a bad thing and they ought to pay penalties? Ohh wait, rich people lost money because they and their programs suck at trading.

What did they actually do? I can't make out what they did other than take advantage of automated trading.


The difference between a solid trading strategy and securities fraud is sometimes whether or not there's a chat saying "lol, bro, totaling juking the market today"
 
2020-09-29 7:37:41 PM  
The spouse has been arguing for the last ten years that we should be investing in gold and silver "because they have true value and can't be manipulated by the markets." Sigh.
 
2020-09-29 7:42:02 PM  
If you're going to commit securities fraud with your buddies, maybe *don't* refer to yourselves as "the crime ring". That's an objectively terrible name!  You may think it is funny, the SEC will not!
 
2020-09-29 7:42:41 PM  
Automatic trading parasites need to be burnt out.

It's so simple: Impose a tax of $.0001 on every trade.

Every single trade.

Every year, if the amount accrued exceeds ten dollars, payment shall be required.
 
2020-09-29 7:46:52 PM  

erik-k: Automatic trading parasites need to be burnt out.

It's so simple: Impose a tax of $.0001 on every trade.

Every single trade.

Every year, if the amount accrued exceeds ten dollars, payment shall be required.


Go further and tax cancel/replace orders
 
2020-09-29 7:48:14 PM  
This kind of thing wouldn't come to light wouldn't happen if we didn't have so much regulation.
 
2020-09-29 8:05:49 PM  
Another Treasuries trader, in a November 2012 chat, described his success in moving the market by tricking high-frequency traders: "a little razzle dazzle to juke the algos..."

I think there's actually not one but two problems with this.

And it is very possible that individual investors paid a little more than market price, either on their own investments or allocations to their 401(k). It's not just the HFT lot getting burned here, when the market price goes up it affects everyone buying at the inflated price.
 
2020-09-29 8:42:51 PM  

Xenu's Giant Pink Replicock: Another Treasuries trader, in a November 2012 chat, described his success in moving the market by tricking high-frequency traders: "a little razzle dazzle to juke the algos..."

I think there's actually not one but two problems with this.

And it is very possible that individual investors paid a little more than market price, either on their own investments or allocations to their 401(k). It's not just the HFT lot getting burned here, when the market price goes up it affects everyone buying at the inflated price.


The part relevant to HFT is the mechanism, not a separate problem.

Although they probably did this both buying and selling, so the effect on individuals would be a wash in aggregate.
 
2020-09-30 12:12:15 AM  

The_Homeless_Guy: Stibium: Can someone explain why this is a bad thing and they ought to pay penalties? Ohh wait, rich people lost money because they and their programs suck at trading.

What did they actually do? I can't make out what they did other than take advantage of automated trading.


Basically they found a flaw in their competitors quant computers software and took advantage of it.
The US government supports these quant computers and their ability to steal insider information and use it to make big profits while careful, intelligent investors pay for it.
In case you have a 401k, some 20% to 30% of the growth of your investments are siphoned off by quants who perform micro trades as your Stonks, bonds, and funds make big trades.  These quants serve no useful purpose in the markets, it's an absurd economic rent on the bottom 99% of Americans, and it should either be illegal, or we need to place a $0.05 tax on every share of Stonks or other securities bought to stop this form of legal theft.
Also also, this is the reason so many brokerages have fee free trading.  They are already siphoning quite a bit off of your investments.
 
2020-09-30 7:29:18 AM  

Northern: In case you have a 401k, some 20% to 30% of the growth of your investments are siphoned off by quants who perform micro trades as your Stonks, bonds, and funds make big trades.


This sentence is complete nonsense.
 
2020-09-30 7:42:45 AM  

BMFPitt: Northern: In case you have a 401k, some 20% to 30% of the growth of your investments are siphoned off by quants who perform micro trades as your Stonks, bonds, and funds make big trades.

This sentence is complete nonsense.


Of the average 6% to 8% annual growth in your 401k, some 20% of that is taken by quants.  You would gain a lot more if quants were not allowed to do their thing. They do this by seeing the fund manager's trade before it executes, buy those securities before it executes, and sells them after the trade executes, making a profit based on insider information.  One way to avoid this is to buy shares off of the exchange directly from the companies, this is what the truly wealthy do.  Of course, quant rents are for the little people.
 
2020-09-30 8:18:38 AM  

Northern: Of the average 6% to 8% annual growth in your 401k, some 20% of that is taken by quants.  You would gain a lot more if quants were not allowed to do their thing. They do this by seeing the fund manager's trade before it executes, buy those securities before it executes, and sells them after the trade executes, making a profit based on insider information.


I can't even figure out what random bit of information you're either misunderstanding or misrepresenting in order to come up with this.  That might be almost plausible for a day trader, but in the context of a 401k it is just completely nonsensical.

One way to avoid this is to buy shares off of the exchange directly from the companies, this is what the truly wealthy do. Of course, quant rents are for the little people.

Wow, that's hilarious.
 
2020-09-30 8:51:55 AM  

BMFPitt: Northern: Of the average 6% to 8% annual growth in your 401k, some 20% of that is taken by quants.  You would gain a lot more if quants were not allowed to do their thing. They do this by seeing the fund manager's trade before it executes, buy those securities before it executes, and sells them after the trade executes, making a profit based on insider information.

I can't even figure out what random bit of information you're either misunderstanding or misrepresenting in order to come up with this.  That might be almost plausible for a day trader, but in the context of a 401k it is just completely nonsensical.

One way to avoid this is to buy shares off of the exchange directly from the companies, this is what the truly wealthy do. Of course, quant rents are for the little people.

Wow, that's hilarious.


Warren Buffet bought a large stake in Coca Cola a few years ago at a 25% discount over the common stock price at the time of sale.  He had to hold the stock of course, but on paper be made 25% before the ink was dry.
That is one way the wealthy avoid paying retail and bypass the exchange.  Maybe this didn't happen?

Second, quant trading supercomputers do ultimately place a financial burden on the market, which is absorbed by average Americans with brokerage accounts and who trade over the exchanges.  I don't think this is controversial.

The way these quants work is that they are connected directly to the exchange computers so they can see incoming large orders from managed funds in a tiny fraction of a second.  Before the large order is completed, the quant buys shares before the order and sells them during and after to eke out a profit.  This of course is not a massive profit but the quants make this up in the number of these trades, which they can perform many thousands of times a second.  This is well known.

This micro-trading strips away a good portion of the annual increases in stock prices, denying average investors (future retirees), their full profit based on their risk/investment, and based on non-public information that banks like Goldman (who own and operate a quant system), exploit in what I consider to be insider information trading.  This is a philosophical opinion.

I agree that the government doesn't care at all, and this is a legal kind of insider trading.

I recommend a return to shareholder tenure, a $0.05 tax on every share traded, and a ban on this kind of insider trading with criminal penalties.
Now if the quants want to trade on a 30 second delay, where they are not connected directly to the exchange, and trade based on research and public information I don't have a problem with that.  The banks don't want a level playing field.
 
2020-09-30 9:17:10 AM  

Northern: Warren Buffet bought a large stake in Coca Cola a few years ago at a 25% discount over the common stock price at the time of sale.  He had to hold the stock of course, but on paper be made 25% before the ink was dry.
That is one way the wealthy avoid paying retail and bypass the exchange.  Maybe this didn't happen?


That type of deal is exceptionally rare, but also not him doing it by himself.  My 5 year old daughter holds Berkshire B shares in her college fund, and to the best of my knowledge she is not among the super-wealthy, despite benefitting from that deal.

This micro-trading strips away a good portion of the annual increases in stock prices, denying average investors (future retirees), their full profit based on their risk/investment, and based on non-public information that banks like Goldman (who own and operate a quant system), exploit in what I consider to be insider information trading. This is a philosophical opinion.

Well as long as you're being philosophical, I guess it's a moot point.  But if you want to talk about math, your previous claim was completely absurd.  If someone with a connection to your real estate agent siphons off some fraction of a percent of the transaction cost when you buy a house, that doesn't somehow magically compound as you live there for the next 20 years.

I recommend a return to shareholder tenure, a $0.05 tax on every share traded, and a ban on this kind of insider trading with criminal penalties.
Now if the quants want to trade on a 30 second delay, where they are not connected directly to the exchange, and trade based on research and public information I don't have a problem with that.  The banks don't want a level playing field.


That's a dumb way of attempting to solve the problem.  The correct way is to switch to dark pools that execute on 1-10 second intervals.
 
2020-09-30 9:33:36 AM  

BMFPitt: Northern: Warren Buffet bought a large stake in Coca Cola a few years ago at a 25% discount over the common stock price at the time of sale.  He had to hold the stock of course, but on paper be made 25% before the ink was dry.
That is one way the wealthy avoid paying retail and bypass the exchange.  Maybe this didn't happen?

That type of deal is exceptionally rare, but also not him doing it by himself.  My 5 year old daughter holds Berkshire B shares in her college fund, and to the best of my knowledge she is not among the super-wealthy, despite benefitting from that deal.

This micro-trading strips away a good portion of the annual increases in stock prices, denying average investors (future retirees), their full profit based on their risk/investment, and based on non-public information that banks like Goldman (who own and operate a quant system), exploit in what I consider to be insider information trading. This is a philosophical opinion.

Well as long as you're being philosophical, I guess it's a moot point.  But if you want to talk about math, your previous claim was completely absurd.  If someone with a connection to your real estate agent siphons off some fraction of a percent of the transaction cost when you buy a house, that doesn't somehow magically compound as you live there for the next 20 years.

I recommend a return to shareholder tenure, a $0.05 tax on every share traded, and a ban on this kind of insider trading with criminal penalties.
Now if the quants want to trade on a 30 second delay, where they are not connected directly to the exchange, and trade based on research and public information I don't have a problem with that.  The banks don't want a level playing field.

That's a dumb way of attempting to solve the problem.  The correct way is to switch to dark pools that execute on 1-10 second intervals.


I like the random delay and could live with that.

With real estate there is one transaction of a fixed asset typically for an individual buying a primary residence.  However a publicly traded REIT would suffer long term rents from quants as you describe above.
 
2020-09-30 9:52:31 AM  

Northern: I like the random delay and could live with that.


It's not random, I was just saying that that was about the range of timeslices that would make sense.  At one second, HFT as it exists today would cease to exist.  But even going as high as 10 would be something to think about.

With real estate there is one transaction of a fixed asset typically for an individual buying a primary residence. However a publicly traded REIT would suffer long term rents from quants as you describe above.

No it wouldn't, unless you're doing your 401k completely wrong.  The effect only applies to any given transaction that you are actually involved in.  If I buy a share of VTI today and sell it 30 years from now after I'm retired, there are only two instances where a HFT could possibly drain off a fraction of a penny.
 
Displayed 25 of 25 comments

View Voting Results: Smartest and Funniest

This thread is closed to new comments.

Continue Farking





On Twitter



  1. Links are submitted by members of the Fark community.

  2. When community members submit a link, they also write a custom headline for the story.

  3. Other Farkers comment on the links. This is the number of comments. Click here to read them.

  4. Click here to submit a link.