84% of All Stock Trades Are By High-Frequency Computers … Only 16% Are Done By Human Traders
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Machines Dominate the Market … Real Human Traders Are Only Very Small Fish In a Big Pond
As of 2010, 50-70% of all stock trades were done by high frequency trading computer algorithms.
And many other asset classes are dominated by high frequency trading as well.
High-frequency trading distorts the markets. And see this and this. And it lets the big banks peak at what the real traders are buying and selling, and then trade on the insider information. See this, this, this, and this.
Morgan Stanley has just shown (via the Financial Times) that the percentage of high frequency trading in the stock market has skyrocketed to 84%:
Trading by “real” investors is taking up the smallest share of US stock market volumes [since Morgan Stanley started keeping track 10 years ago.]
The findings highlight how US trading activity is increasingly being fuelled by fast turnover of shares by independent firms and the market-making desks of brokerages, many using high-frequency trading engines. [actually all of the market-making desks are using it.]
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The proportion of US trading activity represented by buy and sell orders from mutual funds, hedge funds, pensions and brokerages, referred to as “real money” or institutional investors, accounted for just 16 per cent of total market volume in the form of buying, and 13 per cent via selling in the final quarter of last year, according to analysis by Morgan Stanley’s Quantitative and Derivative Strategies group.
It’s not just the U.S. High frequency trading dominates in the U.K. as well.
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You all know I think gold is going to be much higher in a couple years. It has taken a little longer than I thought to play out, but that's because of the belief in the mainstream media's propaganda machine. You think it's a coincidence that Warren Buffet, who recently put on a huge short on gold, has had these statements released? He then gets his best buddy, Bill Gates to stutter on about gold on CNBC. I borrowed these from Mike Krieger's blog.
What is the Deal with Crony Capitalists and Ice Cream Cones?
Posted on May 5, 2012
So today Warren Buffet and Berkshire Hathaway host their annual pilgrimage of automatons to the heartland of America to meet the country’s richest guy who is “just like you.” Why is he just like you? Because he eats hamburgers, drinks cherry coke and loves ice cream cones. This just a day after his right hand man, Charlie Munger called people that buy gold uncivilized and made some disgusting comment about how only Jews in Nazi Germany before getting thrown in a train to a concentration camp have any reason to buy it. As a close friend of mine stated yesterday: “MUNGER TELLS CNBC `CIVILIZED PEOPLE DON’T BUY GOLD’…yeah what they do is they insider trade Lubrizol.”
What I found interesting is how many of the articles I have read on this meeting mention how he is eating ice cream at the meeting. Then I recalled how many times I noticed pictures of Barrack Obama with his face in a cone. Is there a connection between crony capitalism and ice cream cones? Well of course Obama isn’t a crony capitalist. He is just a crony.
So on that note please check out these top 30 pics of our President eating ice cream. Is this also in the playbook? Lie, cheat and steal but publicly eat ice cream and the sheeple won’t suspect a thing?
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Watch Bill Gates Stutter Like a Moron on Gold
Posted on May 7, 2012
You know the system is in trouble when it rolls out every multi-billionaire status quo gatekeeper to appear on CNBC and regurgitate the same trite propaganda lines to scare people away from protecting their financial well being via the one asset that has proven timeless and portable for thousands of years. What the sheeple still cannot get through their minds thanks to constant misdirection from people such as Bill Gates “being on the same page” as Buffett and Charlie “only Jews about to be gassed should buy gold” Munger on the subject of precious metals is that government can and will steal your money and assets when they are backed into a corner. While you can’t sow your E*TRADE account or steel plant into your garments you can with gold.
Billy Gates’ comments on gold are so ridiculous only a caveman could believe them. He uses a lot of fear tactics in the brief commentary. He uses the tried and true what if the “IMF and Central Banks start selling” line. This is hilarious because it is only very recently that Central Banks have been net buyers of gold after decades of selling. Furthermore, the emerging market Central Banks, especially China, have merely 1%-5% of their FX reserves in gold (no one knows the exact number) so they will take every ounce the Western Central Banks are stupid enough to put up for sale. He implies that Central Banks could sell gold because it does “nothing for its citizens.” A more ridiculous statement has never been uttered. First of all why would these sophisticated financial wizards running these institutions hold gold in the first place? Why would Nixon close the gold window in 1971 to prevent the loss of more U.S. gold if gold doesn’t matter? Why would all the up and coming economies be buying it and why are some of the smartest investors in the world buying physical gold? Gates is trying to imply these investors are all stupid, mentally weak individuals. Finally, as if what these governments are doing at the moment is good for their citizens?! Yeah, just look at the skyrocketing suicide rate in Greece for your proof. I’m sorry the best thing a government can do is to hold as much gold as possible for its citizens so they have a chance to start over once this house of cards implodes publicly.
He also states that once people want to sell “there is no floor.” I mean come on man. Gold is the only currency that has survived purchasing power intact since the ancient Egyptians. The worst part about him saying all this publicly is that he is actively discouraging the sheeple who actually listen to him from protecting themselves. That is morally repugnant.
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What is interesting to me about this poll, gold makes up less than 2% of the investment holdings of Americans.
According to a recent Gallop Poll…
28% of Americans voted gold as the best investment.
It beat out real estate (20%), stocks (19%), savings accounts (14%)… Even bonds (8%).
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As I was typing this blog I received this from a friend. I didn't see the piece on CNBC because I'm banning from my watch list.
Ok - So I am listening to CNBC this morning and they had Jordan Belfort on, the author of "The Wolf of Wall Street". They handed him a Book Award for his great story which consists of under 30 millionaire on wall street who ended up in prison for ripping people off, plus he has made a whole movie about it too. Take a look at the story on CNBC.
My point is not so much him, but rather the fact that CNBC is glorifying someone who not only ripped people off, but went to f***ing prison for front running!!! I thought maybe you could say a few words in your blog about it. No wonder the culture doesn't change. How do you get rid of greed when you glorify it? YOU DON'T! The path will never change for crony capitalism and we have to prepare for further mayhem in the markets - it will never change!
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So let me get back to the economics of it all. Businesses are making good money, but this is not good for the 99%. Unemployment was down last week to 8.1%. Here's why...
The U.S. unemployment rate fell to 8.1 percent in April, but investors are quick to point out that much of this decline could be generated by a drop in labor force participation, not true jobs growth.
In fact, labor force participation hit 63.6 percent in April, down from 63.8 percent in March. That's the lowest rate since 1981.
From expert Reuters chartist Scott Barber, this is what's happened to labor force participation over the years:
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That chart coincides with this one. Americans are receiving as much money from govt benefits as they are paying in taxes. I'm sure that is sustainable.
Economists have been touting consumer strength as the economic recovery has appeared to gain steam in the last few months.
But there's a good reason to believe this development isn't all it's cracked up to be.
According to research from Morgan Stanley global strategist Gerard Minack, the U.S. government is actually "paying out as much in benefits as it receives in taxes from households."
And analysts already concerned about a fiscal cliff ahead around the start of 2013 when the government dramatically cuts back expenditures, the power of the consumer might be much weaker than the numbers would suggest.
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I'm glad I didn't spend 6 figures to get a PhD ;) Again this is from Krieger's Blog.
Number Of PhD Recipients Using Food Stamps Soars
Posted on May 7, 2012
This article from the Huffington Post really says it all. If you aren’t on Wall Street borrowing from the Federal Reserve at 0% and buying financial assets on leverage or stealing from the citizenry in the cesspool we call Washington D.C., you are becoming poor. How’s that for Hope and Change.
Key quotes:
The number of PhD recipients on food stamps and other forms of welfare more than tripled between 2007 and 2010 to 33,655, according to an Urban Institute analysis cited by the Chronicle of Higher Education. The number of master’s degree holders on food stamps and other forms of welfare nearly tripled during that same time period to 293,029, according to the same analysis.
The sluggish economy has pushed graduates with law degrees to look for jobs outside of the legal profession, according to U.S. News and World Report.
Many adjunct faculty members are likely to be on welfare, since they live on “poverty wages,” the Chronicle of Higher Education reports.
All of these factors, plus a less-than-stellar job market, have forced many PhDs to work in menial jobs. There are 5,057 janitors with PhDs, according to Bureau of Labor Statistics data cited by the Houston Chronicle.
Posted on May 7, 2012
This article from the Huffington Post really says it all. If you aren’t on Wall Street borrowing from the Federal Reserve at 0% and buying financial assets on leverage or stealing from the citizenry in the cesspool we call Washington D.C., you are becoming poor. How’s that for Hope and Change.
Key quotes:
The number of PhD recipients on food stamps and other forms of welfare more than tripled between 2007 and 2010 to 33,655, according to an Urban Institute analysis cited by the Chronicle of Higher Education. The number of master’s degree holders on food stamps and other forms of welfare nearly tripled during that same time period to 293,029, according to the same analysis.
The sluggish economy has pushed graduates with law degrees to look for jobs outside of the legal profession, according to U.S. News and World Report.
Many adjunct faculty members are likely to be on welfare, since they live on “poverty wages,” the Chronicle of Higher Education reports.
All of these factors, plus a less-than-stellar job market, have forced many PhDs to work in menial jobs. There are 5,057 janitors with PhDs, according to Bureau of Labor Statistics data cited by the Houston Chronicle.
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The total debt of the US government has increased by $6.7 trillion in the last 5 years and by $9.6 trillion in the last decade. The total debt of the government was $15.58 trillion as of 3/31/12, up from $8.85 trillion as of 3/31/07 and $6.01 trillion as of 3/31/02. Our nation’s total debt is the sum of the money we owe our creditors plus surplus funds from Social Security and Medicare that have been invested in Treasury securities, i.e., intergovernmental debt (source: Treasury Department).
In the first 6 months of fiscal year 2012 (10/01/11-3/31/12), the US government spent $1.84 trillion.
For the entire fiscal year 2001, the US government spent $1.86 trillion, an amount that at the time was an all-time record (source: Treasury Department).
For the entire fiscal year 2001, the US government spent $1.86 trillion, an amount that at the time was an all-time record (source: Treasury Department).
When FDR signed the Social Security legislation in 1935, the life expectancy of a 65-year old American was 12.5 years. Today, the life expectancy of a 65-year old American is 19.2 years (source: CDC).
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