The normal exchanges tend to be more volatile and more prone to market crashes than their inverted and pro-rata brethren. As such, investors concerned about market manipulation may be best advised to execute their orders at inverted or pro-rata exchanges.
Capital used to mean silver and gold; now it's credit. Digital currency has a potential for manipulation and fraud that paper bills and coins never could. And no counterfeiter could make a fraction as much as a hedge fund operator or Wall Street CEO. Not even close.
How would you like to invest $10,000 and watch it grow over twenty years into $1,461,920? Well that's what happened at the giant hedge fund, SAC Capital Advisors, which made a 30 percent return for 20 years in a row.
Billions of dollars are being invested to make trading without humans faster, cheaper, smarter. The problem is that no matter how smart you make machines, they will never be smart enough in our lifetime to detect all levels of deceit and fraud. Particularly online.
The new Rich List is out -- yet another example of financial pornography. While nearly 15 million Americans still can't find jobs due to the Wall Street-created crash, the top hedge manager, David Tepper, earned $1,057,692 an HOUR in 2012.
The trading risks of HFT may decimate the HFT operation and at the same time greatly affect other market participants. Particularly, in selected markets, unchecked HFT may quickly incur considerable losses, well in excess of any tolerable limits.
It's not a secret that many pension fund, mutual fund and hedge fund managers are concerned about high-frequency traders (HFTs). While their concerns are many, perhaps the biggest uncertainty involves the actual extent of HFT participation in the markets, their identities and their intent.
The frustration of those of us arguing for pragmatic reforms and unbiased research should be evident. I am thankful that here in the United States, the SEC has at least begun to realize the need for more independence in its research and panels, and I hope that trend continues.
Finally, the SEC has begun to take some action. It's made a lot of progress in just a month, but a lot more needs to be done, as a series of reports written by David Weild for the accounting firm of Grant Thornton makes clear.