60 Minutes. This story about stock trading is scary.

[amerikat]

Computerized high frequency trading.
Computers trading stock without knowing anything about
the companies. They use algorithms to predict stock prices.
Large blocks of stocks bought and sold within seconds!

WE ARE SCREWED.

[nadinbrzezinski]

1. They JUST discovered this?

I am sorry but sometimes I wonder 'bout our so magnificent Nooze Media.

:sarcasm:

[amerikat]

3. I missed the very beginning of the show

but I think it was a look into what happened and why
regarding the one day dip this past May.

I knew about this method of trading for years but I didn't
realize the volume and frequency involved.

[Pharaoh]

4. snooze media,.............

bunch of corporate stooges.......

[dixiegrrrrl]

2. More than you know.

Not only is the market now artificial and totally disconnected from value,
the economy is being whip sawed by computers that running by themselves.

Think War Games squared.

[amerikat]

6. Good analogy.

Wanna play global thermonuclear economics?

[RKP5637]

19. Yep, it's just computerized automated gambling anymore in the market, it's a big bucks game,

little players like most citizens need not apply. And anyway, little players don't have the proprietary tools to even begin to play. We're in such deep doo doo in this country the majority of the citizens don't even know the half of it...

[brewens]

5. I read somewhere that they can detect a large buy order from a

mutual fund, execute a buy for the same stock that gets processed first, then profit when the mutual fund buy comes through and increases the stock value. The mutual fund ends up paying a slightly higher price because of the buy that went trough first.
The fact that their computers are right there on Wall Street give them the nano second advantage they need to pull stuff like that off.

[amerikat]

7. Yes, Using info not even available in real time for other traders(nt).

[Liberal_in_LA]

15. yeah, no traders are seeking profits on nano second trades.

[eShirl]

36. the ultimate insider trading?

[Warpy]

8. This is why we need an 0.5% tax on stock trades

Not only would it bring enormous revenue in, it would destroy much of the profitability of HFT, the biggest threat to the market yet since some hedge funds are using it to manipulate stock prices by trading stock they don't even own.

The market was bad enough before these guys got into it with their computers. Now it's hopelessly rigged by them.

[WillyT]

16. Most Excellent Point There Warpy !!!

:yourock:

:kick:

[amerikat]

28. .05% per trade or per share traded?

.05% of the sale price per share works for me.

[elleng]

9. We WERE screwed, this caused the huge, quick 'down' few months ago.

[amerikat]

31. And we will get screwed again.

The traders that were featured on the show had no clue
how the rest of us live and wouldn't care if they did.
They seemed as cold and calculating as the super computers
they use. Kind of like the cyborgs in the Terminator movies.

[amerikat]

10. Link to 60 Minutes preview of the story.

http://www.cbsnews.com/video/watch/?id=6940430n&tag=contentMain;cbsCarousel

[bemildred]

11. This is why you don't want to leave your money in the market.

Sooner or later, you will be screwed.

[amerikat]

18. Just between you and me and 160,000 DUers...

I'm out in the morning.

[cbdo2007]

30. Actually, leaving your money in the market is the only true way to beat the system.

It's the guys who treat it like a casino and jump in and out all the time and think they're "traders" - those are the ones who will absolutely, positively be screwed.

[Capn Sunshine]

12. Freeq trading is all they have left

That and traders like me. The volumes these days indicates the retail buyer has fled the scene.

According to a National Association of Realtors’ monthly Realtors Confidence Index survey, cash buyers are a steady 25% of the market currently, and that figure seems to be rising.

Coincidence? I think not

[WestSeattle2]

13. Government regulators have never been able to keep up with

technological advances. This is another glaring example. That said, who in their right mind would advocate for privatizing Social Security when it's obvious that Wall Street is nothing more than a casino? No one with an ounce of sense would advocate for such a thing; the only ones who are receive campaign financing from vested Wall Street interests. Follow the money.

[amerikat]

14. Full Video is up already. Link below.

http://www.cbsnews.com/video/watch/?id=6945451n&tag=contentMain;cbsCarousel

[amerikat]

17. the link is good.. The website is having problems I think(nt).

[RKP5637]

20. Thanks!!! n/t

[amerikat]

21. let me know what you think.

It really freaked me out.

[RKP5637]

23. I guess the site is overload, video did not come up. I knew about this sometime

ago. Some quite powerful computers doing this are also located far from wall street. This is apparently what caused the stock market glitch awhile back. It's freaky and I seriously doubt the SEC has the capability to keep up with them as this seems to be morphing all of the time. I'll also watch the video. I'll try again now.

[unkachuck]

22. K&R....n/t

[YvonneCa]

24. Tom Friedman...

..."The Earth is Flat"...written about this YEARS ago.

[upi402]

25. Just another board in the burning house

Thanks for posting this. Sad that it's not shocking. It should be.

[amerikat]

26. Thanks. I'll check that out(nt).

[Lucky Luciano]

27. In the old days, commissions were higher than what the HFT pick off.

Call the HFT edge a commission - a relatively cheap one.

I have no problem with HFT. It is pure cleverness and intellectual firepower.

[Bigmack]

29. So what happens...

when Hal won't open the pod bay doors?\

The Market goes down the dumper and we bail the brokesters out again.

[amerikat]

32. Bailing out the bankster on bad mortgage paper is one thing.

wouldn't bailing out the stock market lead to hyper-inflation?

[cbdo2007]

33. HFT effects 70% of stock trades but a very, very small amount of stock investors.

The large majority of people in the stock market are in it to make money in longer than 1 month.

HFT are only effecting the stock price for minutes to days at a time, but really have NO effect on long term investors. Still, the health of a company is what is moving the stock price over the long term. That is why GM went down to nothing and Apple keeps going up.

It is true that this needs to be regulated because of the mistakes that can happen but really HFT is driving the market very, very little, and the only people hurt by it are "traders" who are the ones gambling in the market - NOT those of us investing in companies, which is the large majority.

[Kablooie]

34. Ah yes. The invisible hand of iRobot. Capitalism at it's capitalist.

[lunasun]

35. I wish I was stupid and didn't know so much or care - so much scares me these days

[Vinca]

37. I'm so old I remember the good old days when investors cared about the value of the company.

Now it's little more than a video game/gambling parlor paid for by the moneyed to benefit the moneyed. To echo the OP, we're screwed.

[CanonRay]

38. Another reason not to own stocks

as if I needed another one.