CNBC – The (Stock) Market is Rigged

flashBoysthumb_scale

What impresses me is the standard deniers and the standard blind-men that show up for these events. In any case, (…), pants on fire.

This story starts with Michael Lewis‘ new book Flash Boys (ISBN:0-393-24466-0)

The New York Times Magazine has an adaptation by Michael Lewis, if you’d like to read a chapter.


TheGreatHFTDebateThis Week on CNBC: Katsuyama vs. O’Brien – (3:05)

https://www.youtube.com/watch?v=K9F-pZu0hiA

In context, William O’Brien &  BATS Global Markets is one the companies highlighted as “riggers”.  In case you missed this, CNBC asked the question Is the (stock) market rigged?, with reponses from the following

  • Henry Blodget – Business Insider, says “The Concept (…) is Crazy.”
  • Larry Kudlow – CNBC commentator, says “No. I don’t believe its rigged.”
  • Mark Cuban – shark investor, says, “Well …  that suggests Micheal Lewis is right. And something is rigged and not right.”
  • William O’Brien – BATS Global Markets President, “Brad and Micheal shame on you….”
  • Brad Katsuyama – featured above, “I believe the markets are rigged, and you are part of the rigging,” to William O’Brien.
  • Micheal Lewis – author of the book, “I visited BATS, and …”. He never complete because of O’Brien interrupting and the CNBC editing.

At (~2:28) the story moves to the unemployment numbers for the quarter.


riggedMarketDebateCNBC trails with a story where Peter Nabicht, of Modern Markets Initiative, claims that “the high volume of participants” makes it legitimate.

High-frequency trading benefits investors: Advocate – (5:06)
http://www.cnbc.com/id/101549113

In the video – when pressed, he (Peter Nabicht) says the real issues are: “Insider Trading, Front Running, & Early Access to Data”. CNBC counters(~3:55), much as Mark Cuban does,

if you take a High Frequency Trader, like Virtu, and they only lose money one (1) day in 1238 (3+years). (It can only be rigged.)

Then there is this:

Silver Lake-backed high-frequency trader Virtu Financial pulls IPO in wake of Michael Lewis book
http://www.bizjournals.com/sanjose/news/2014/04/18/michael-lewis-book-stalls-ipo-by-silver-lakes-high.html

CNBC’s  Bob Pisani has an article that explains the technical.
The New York attorney general to probe high-frequency trading.

And finally, SEC official: What’s hurting the ‘little guy’

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