CNBC Video - Grasso with Kernen on Squawk Box - Oct. 28, 2011
Clip runs 1 minute. Grasso is wrong. The entire practice should be banned. He tries to make a distinction that doesn't exist. Market makers are now and have always been scalpers, by the nature of their business. I've been around long enough to remember 50-cent spreads on $10 dollar stocks, with Knight Trading sitting on the bid and ask all day long, fat and happy. And a world without HFT will not revert to dramatically wider spreads as some argue with the proliferation of independent exchanges.
Check this out:
Video: S&P 500 Futures Pit on May 6, 2010
Absolutely amazing. This is how Armageddon sounds.
Many of you have heard this clip before. For those of you who have not, buckle up for a ride. Audio of a S&P 500 trader quoting the action that was taking place in the futures pit in Chicago at the CME. The market lost nearly $1 trillion within minutes and then recovered most of the losses. The DJIA and S&P 500 futures fell 10% intra-day.
More detail is here: