I was going to write on a completely different topic, but after yesterday’s incredible TVIX fiasco (see chart below), I have the nuclear destructive power of HFT trading on my mind. I have written exhaustively of this topic for years – particularly how HFT accounts for roughly 75% of ALL NYSE trading, with Goldman Sachs having a roughly 20% market share. Yes, the very same GOLDMAN SACHS that has DESTROYED THE WORLD in countless ways, transacts roughly one-sixth of ALL U.S. stock trades, DESTROYING YOUR PORTFOLIO as it did the mortgage market, the government of Greece, and the U.S. Treasury.
As I wrote yesterday, “the ridiculously named, even more ridiculously conceived, Velocity Shares Daily 2x VIX Short…literally SNAPPED,” plummeting 30% when it was supposed to fall 5%, per the article below. Today, it is down another 27%, headed to ZERO for no known reason, DESTROYED by HFT ALGORITHMS in what can only be described properly as a “drive by mob hit.”
THIS is what can happen when HFT ALGORITHMS take over the market (not just the stock market, by the way), like when computers commandeered the military in the Terminator, per one of my favorite movie clips…
The Genesis of Skynet [Terminator 2]
And don’t think it can’t happen to big stocks as well, like what happened to none other than APPLE this morning. The stock suddenly plunged $60, or 10%, was HALTED, and then “fixed” by the same computers that broke it, causing millions of dollars of losses to “suckers” playing their rigged game.
However, even the “TVIX debacle” and “APPL flash crash” don’t hold a candle to what happened today with BATS Global – ticker “BATS” – which went public this morning at $16.00/share. I have no idea what BATS Global does, and frankly, I don’t care. But I do know that just hours into its first trading day, the stock CRASHED to $0.03/share, and has since been halted indefinitely.
No explanations have yet been given, but I have NO DOUBT it was caused by the same HFT ALGORITHMS that destroyed TVIX, WATERFALL DECLINED APPL, and caused the May 2010 equity “flash crash.” With today’s top stories on the widely viewed Yahoo! Finance website being TVIX, APPL, and BATS, the stock market business is being delivered yet another huge black eye. You know how I feel about mining stocks, so nothing would please me more than the ENTIRE STOCK BUSINESS being discredited for the manipulated sham it has begun.
All you need to see are the headlines below – directly following the BATS stock crash – to understand how clueless the big, bad SEC is regarding the rape and pillage of its charge occurring right under its own nose. Moreover, like the CME in the rigged commodity futures markets, the various stock exchange “self-regulatory” systems have been essentially shut down, an even bigger SHAM than the rigged markets themselves. The NYSE, AMEX, and NASDAQ love the gargantuan commissions generated from billions of HFT-traded shares, and could care less if investors lose their life’s savings in their blatantly manipulated casinos (which, in my view, give better odds than the stock market).
Today’s trifecta of HFT madness – TVIX, APPL, and BATS – is yet another knife in the heart of PAPER securities trading, particularly the fraudulent “tracking” ETFs I have long railed against (such as GLD and SLV, by the way). Between the “flash crash,” MF Global theft, naked shorting, PPT and Cartel manipulation – and a dozen other factors discussed in previous RANTS – I do not understand why anyone would invest material amounts in the publicly traded stock, bond, and commodity markets. Such events further highlight the supreme safety of PHYSICAL gold and silver, which sometime soon will be the ONLY assets desired by hundreds of millions of frantic investors worldwide.
PROTECT YOURSELF, and do it NOW!