Crash Boys - Michael Lewis on the stock market flash crash.

[PoliticAverse]

The first question that arises from the Commodity Futures Trading Commission’s case against Navinder Singh Sarao is: Why did it take them five years to bring it?

A guy living with his parents next to London's Heathrow Airport enters a lot of big, phony orders to sell U.S. stock market futures; the market promptly collapses on May 6, 2010; it takes five years for the army of U.S. financial regulators to work out that there might be some connection between the two events. It makes no sense.

A bunch of news reports have suggested that the CFTC didn’t have the information available to it to make the case. After the flash crash, the commission focused exclusively on trades that had occurred that day, rather than orders designed not to trade -- at least until some mysterious whistle-blower came forward to explain how the futures market actually worked. But this can’t be true.

See the rest at: http://www.bloombergview.com/articles/2015-04-24/michael-lewis-has-questions-about-flash-crash

[Downwinder]

1. They going to tie him to the 9/11 futures trades, too?

[brush]

2. Sarao just figured out what the front running HFT were doing and did it himself

What he did goes on all day everyday in all the equities markets.

He was smart enough to game the gamers from his couch. Since the HFT done get punished for doing it everyday neither should he.

And it's not accident that this comes out 5 days before the statute of limitations runs out.

As the article states, the real big boy traders that do this everyday can't be gone after and are now off the hook as the investigators blame the little guy nobody.

It's so tidy, crime solved. The little guy caused the flash crash 10 years ago (yeah, right).

No more questions please.

[dixiegrrrrl]

3. Speaking of.....

Besides The Flash Boys by Michael Lewis, another one of the better books I have recently read about HFT is
Hedge Hogs: The Cowboy Traders Behind Wall Street's Largest Hedge Fund Disaster


For readers of The Smartest Guys in the Room ( excellent reporting on crash of Enron)
and When Genius Failed,(The Rise and Fall of Long-Term Capital Management)

Hedge Hogs is the definitive take on Brian Hunter, John Arnold, Amaranth Advisors, and the largest hedge fund collapse in history
At its peak, hedge fund Amaranth Advisors LLC had more than $9 billion in assets. A few weeks later, it completely collapsed. The disaster was largely triggered by one man: thirty-two-year-old hotshot trader Brian Hunter. His high-risk bets on natural gas prices bankrupted his firm and destroyed his career, while John Arnold, his rival at competitor fund Centaurus, emerged as the highest-paid trader on Wall Street. Meticulously researched and character-driven, Hedge Hogs is a riveting fly-on-the-wall account of the largest hedge fund collapse in history: a blistering tale of the recent past that explains our precarious present . . . and may predict our future.

http://www.amazon.com/Hedge-Hogs-Traders-Streets-Disaster/dp/1400068398