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Off the Cuff: Moribund Capital

The money flood that will never enter the real economy
Monday, June 23, 2014, 1:51 PM

In this week's Off the Cuff podcast, Chris and Brian Pretti discuss:

  • Moribund Capital
    • Asset prices are rising due to money that will never hit the economy
  • Absence Of Useful Market Signals
    • No reliable benchmarks for the investor to trust
  • Dead Volatility
    • Making the market more vulnerable once it returns to life
  • Zombie Economies
    • Too many sovereign nations have become the 'financial undead'
Podcast

Joe Saluzzi: HFT Parasites are Killing the Market Host

Our exchanges are infested
Monday, July 2, 2012, 12:05 PM

Joe Saluzzi, expert on algorithmic trading -- also known as high-frequency trading, or HFT -- returns as a guest this week to explain how the players behind this machine-driven process act as parasites that are destroying our financial markets (and, increasingly, even themselves).

Since Joe first spoke with us last year, HFT firms have only increased in size and share of market activity. Here are some staggering statistics on how influential they have become:

  • HTFs make up between 50-70% of the volume seen across market exchanges today.
  • 2% of the traders on many exchanges (HFTs, specifically) represent 80% of the volume.
  • A single large HFT firm (referred to as a Direct Market Maker) can account for 10%+ of a market's volume on a given day
  • Large HFT firms make between $8 to $21 billion a year.
  • HFT trades occur in milliseconds (i.e., a small fraction of the time it takes your eye to blink).

With such scale, speed, and profitability, HFTs have turned the market away from being an efficient price-setting mechanism and perverted it into a casino where the clientele of human investors gets fleeced. » Read more