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Tag Archives: algorithms

  • Podcast

    Sven Henrich: It's Make Or Break Time For The Markets

    Stocks are poised to break big, one way or the other
    by Adam Taggart

    Monday, April 1, 2019, 4:46 PM

    4

    It's make or break time in the markets cautions Sven Henrick, technical analyst and lead market strategist for Northman Trader.

    His weekly flurry of trendline charts warn that the major indexes have been compressing in rising wedges that increasingly point to a binary outcome: either a massive new leg up that will result in the market making new all time highs, or a bad breadown that could waterfall into a 2008-style correction.

    His reams of data increasingly suggest that today's global elevated asset prices are in no way justified by the fundamentals of the underlying world economies. And that someday — perhaps quite soon — a reckoning long overdue will occur.

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  • Blog
    A-papantoniou/Dreamstime

    Our Brave New ”’Markets”’

    How HFT algorithms risk a massive sudden sell-off
    by Chris Martenson

    Saturday, July 29, 2017, 1:18 AM

    7

    One thing is clear: These aren’t your daddy’s markets anymore.

    Why?  Because about 10 years ago the Rise of the Machines (aka high frequency trading algorithms) completely altered the terrain of what we call the ‘capital markets.’ 

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  • Blog

    Sympathy For The Devil?

    Trouble in paradise for the bankers
    by Adam Taggart

    Friday, May 5, 2017, 7:32 PM

    32

    We're at the point where those at the apex of power are becoming increasingly desperate to maintain their unfair advantage.

    And as the economic pie refuses to grow due to the twin overload of too much debt and declining net energy, these apex predators will turn on each other — first to maintain their spoils, and then simply to survive.

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  • Blog
    Barandash Karandashich/Shutterstock

    Banks Are Evil

    It's time to get painfully honest about this.
    by Adam Taggart

    Saturday, March 18, 2017, 12:05 AM

    69

    I don’t talk to my classmates from business school anymore, many of whom went to work in the financial industry.

    Why?

    Because, through the lens we use here at PeakProsperity.com to look at the world, I’ve increasingly come to see the financial industry — with the big banks at its core — as the root cause of injustice in today’s society. I can no longer separate any personal affections I might have for my fellow alumni from the evil that their companies perpetrate.

    And I’m choosing that word deliberately: Evil.

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  • Podcast

    Grant Williams: A Punch To The Face For Central Banks

    The return of volatility may just deliver that
    by Adam Taggart

    Sunday, February 5, 2017, 7:57 PM

    10

    Grant Williams, publisher of the economic blog Things That Make You Go Hmmm and principal of Real Vision TV, returns to the podcast this week to discuss his expectation of a return of volatility to the markets.

    Grant warns that over the past seven years, the various financial markets around the globe have melded into a single world market dominated by trading algorithms and the central banks. This new system only knows how to operate effectively in one direction: Up.

    Grant is very concerned that a return of volatility will act as a wrench tossed into the gears, quickly throwing the world financial system into panic.

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  • Podcast

    Eric Hunsader: The Financial System is ‘Absolutely, Positively Rigged’

    And the abuses are getting worse, not better
    by Adam Taggart

    Tuesday, April 19, 2016, 12:36 AM

    8

    Eric Hunsader, founder of Nanex, has been at the vanguard of warning about the dangers and the rampant fraud that the rise of high-frequency trading (HFT) algorithims have let loose in today's financial markets.

    While he usually feels like a lone voice in a world happy to deceive itself, he was shocked to receive a $750,000 whistleblower award from the SEC for his efforts. He's been sadly less shocked to see that since the award was publicly announced, the abuses he reported have only become more extreme and frequent.

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  • Podcast

    Joe Saluzzi: Broken Markets

    HFT, inept regulators & Fed distortion = more flash crashes
    by Adam Taggart

    Sunday, May 3, 2015, 8:58 PM

    5

    As luck would have it, we had Joe Saluzzi lined up to record a podcast the day the news broke recently that the suspected culprit for the 2010 flash crash, Navinder Singh Sarao, had been arrested.

    In this discussion, Joe shares his suspicions about Sarao (a contributor to the crash, but highly unlikely to be the actual cause) and then provides his expert assessment of what has been done in the intervening years since the flash crash to safeguard the market against a similar failure (precious little). In his opinion, a winner-take-all high-tech arms race, clueless and toothless regulators, and central bank price distortion are conspiring to make us more vulnerable — not less — to another systemic breakdown.

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  • Podcast

    Eric Hunsader: Investors Need to Realize the Machines Have Taken Over

    The blink of an eye is a lifetime for HFT algos
    by Adam Taggart

    Saturday, October 6, 2012, 6:24 PM

    9

    In the blink of an eye, the market moves what used to take humans thirty minutes.

    High frequency trading (HFT) deeply concerns Eric Hunsader, founder of Nanex. He worries that today's investors, our regulators heck, even the HFT algorithms themselves don't fully understand the risks market prices face in the brave new era of bot-dominated trading.

    For instance, Hunsader estimates that HFT algorithms are responsible for 70%(!) of all completed transactions on our exchanges, and for 99.9%(!!!) of all exchange quotes.

    The pictures of trading floors you see on TV, where the people in bright jackets appear frantically busy in making their trades, have no bearing claims Hunsader on the actual trading action. The real action happens across fiber-optic cables, on racks of servers in cooled rooms, where an arms race defined by cable length and switching speeds is being waged

    The reality is that the machines have taken over.

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  • Podcast

    Joe Saluzzi: HFT Parasites are Killing the Market Host

    Our exchanges are infested
    by Adam Taggart

    Monday, July 2, 2012, 4:05 PM

    5

    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.

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