Listen To The Stock Market Flash Crash - Tick by Tick - Read The NANEX Final Report Contradicting The SEC

This is how Armageddon sounds.

Start watching at the 2-minute mark.

Video:  S&P 500 Futures Pit on May 6, 2010

UPDATE 2 - Aug. 1. 2012 - Things are getting weird again - link, link

Chaos Strikes The Market, Algo Gone Wild, Knight Capital Plummets 24%

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Many of you have heard this clip before.  For those of you who have not, buckle up.  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.

Links:

• Official SEC Report

• The Truth About The Flash Crash

• Nanex Final Conclusion

• Nanex Summary Report -- Best Links Collection

Comments

[DailyBail]

Is The Congress About To Pass A Bailout, And Save The Banks From The Mortgage-Putback Crisis?

http://www.businessinsider.com/mortgage-putback-crisis-bailout-2010-10#ixzz12YFLE0tg

[DailyBail]

Why financial stocks haven’t fallen much

http://blogs.reuters.com/felix-salmon/2010/10/15/why-financial-stocks-havent-fallen-much/

[DailyBail]

http://dailycaller.com/2010/10/14/thedc-op-ed-one-nation-under-fraud/

Tomorrow, a bank—not your bank, but any bank—could evict you from your home. Even if you didn’t know the bank was foreclosing. Even if your mortgage is paid off. Even if you never had a mortgage to begin with. Even if the bank doesn’t hold a single piece of paper that you signed. And major banks not only know this fact, but have spent millions of dollars to defend it in court. Why? The answer starts with a Jacksonville homeowner named Patrick Jeffs.

Read this one...

[DailyBail]

Foreclosure Fraud: We Need to Fix the Banks Again

By Marshall Auerback, a Senior Fellow at the Roosevelt Institute, and a market analyst and commentator. Crossposted from New Deal 2.0.

It’s time to put the perps of this scandal in jail.

http://www.nakedcapitalism.com/2010/10/foreclosure-fraud-we-need-to-fix-the-banks-again.html

[Z]

http://www.youtube.com/watch?v=S3Qqc13Ihk8

[Z]

Financial Terrorism and Economic Conspiracy Theories...

http://www.youtube.com/watch?v=5BcGTA7L6w4

[Cheyenne]

Do you have a copy with a complete soundtrack? Numerous places like 2:09 - 2:15 there is no sound though video advances.

I've heard this before, by the way, and am grateful you brought me back to it for reconsideration.

[Cheyenne]

It's panic-fueled insanity. People forget shit like that too fast.

[Z]

Jim Rogers is right again...Cotton prices already spiking before next quantitative easing...

http://www.businessweek.com/ap/financialnews/D9ISBR2G0.htm

Cotton for December delivery fell 5 cents to settle at $1.0987 a pound after hitting a record $1.1980 a pound.

It was the highest level for cotton since cash prices paid to farmers during the Civil War when blockades prevented shipments from leaving the South, said Sharon Johnson, a senior cotton analyst at Penson/FCG.

"As long as I've been involved in this I've never seen anything like this," said Johnson, who has worked in the cotton market since the mid-1980s.

Yes, the shit is going to hit the fan. Get ready for inflation on what the small people buy and deflation for what the big people buy.

[Cheyenne]

Z--

I agree, but formulate what's going on in a different way. Inflation for what you can't avoid buying (food, energy, medicine, colostomy bags, fees, taxes, fines, glasses, and denture adhesives) and deflation in what's easy to avoid (McMansion, 50" plasma, new car, bric-a-brac, and celebrity guitars).

I suspect we formulate it differently because I'm old and decrepit and you have an actual life.

[DailyBail]

Do you have a copy with a complete soundtrack? Numerous places like 2:09 - 2:15 there is no sound though video advances.

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Cheyenne...i looked around on youtube and those were the best 2 i could find...just click the video while it's playing and it will take you to youtube and look in the right sidebar for other copies...but i think they're mostly the same...

[Cheyenne]

Those Nixonian audio gaps do make you wonder what's up. And yeah, that NANEX report makes Mary Schapiro/Chris Cox look like an imbecile. I mean, Martha Stewart and Mark Cuban but not Bernie Madoff? Really? Our country has turned into a bad joke. Where is V.S. Naipaul when you need him?

[DailyBail]

i had to look up naipaul...

http://en.wikipedia.org/wiki/V._S._Naipaul

[DailyBail]

SEC’s Schapiro eyes high frequency traders

‘Flash crash’ one year ago is driving SEC trading limit regulations

http://www.marketwatch.com/story/secs-schapiro-eyes-high-frequency-traders-2011-05-06-1015380

[DailyBail]

Former regulator eyes margin to tamp speculation

Former CFTC unit head seeks small margin hikes to dampen commodity prices

http://www.marketwatch.com/story/former-regulator-eyes-margin-to-tamp-speculation-2011-05-06

[DailyBail]

Get ready for another flash crash

http://www.marketwatch.com/story/get-ready-for-another-flash-crash-2011-05-06?Link=obinsite

[DailyBail]

Silver has worst week since 1980

http://www.marketwatch.com/story/gold-stabilizes-but-silver-falls-again-2011-05-06

[DailyBail]

Smart money left silver to tarnish retail buyers

http://www.marketwatch.com/story/funds-had-left-bets-silver-was-going-up-2011-05-06

[Throb]

If the individual retail trader is out of the market, who would be the likely target of the Front Running HFT Ponzi Shop? The only source of liquidity left for those f*cks to gentrify is the liquidity of investors being serviced by retail money managers.

A little curious as to Waddell & Reed trades. Did they have a short position setup before the cascade of sell orders?

Did Waddell & Reed, or anybody, have long positions in the batter's box ready for the "planned" bottom kiss and quick spike up?

2 weeks ago the EOD HV printed and tracked precisely to the VIX and VXO - they were one signal for more than a week. If we go back 20 years, when the VIX, VXO was introduced (btw: Goldman "collaborates" with the CBOE to print the VIX) , and there is not one whisper of a hint of VIX : HV correlation. They cross. They never ride the same train.

BTW: The VXO is regarded by some as a more reliable, more independent indicator of derivative trade sentiment.

So why did they correlate so tight so long? Don't know. But when the HV for the S&P prints precisely the same as the VIX, it appears the S&P trade was a function of sentiment on the CBOE. IOW, The S&P was not trading based on the prospects of it's underlying paper. The HFT / front run guys, obviously, could not find enough prospective "victims" trading the S&P so they switched their HFT ponzi systems to a "safe mode" of sorts. and used the VIX as the "carry" to maintain some kind of delta neutral stasis.

In short: The S&P traded as a function of it's CBOE side bets.

Retail traders had enough of the HFT / Front Runners gutting them every time their orders queued up and got out. The retail trader is out.

So who is left to offer bones for picking by the HFT/Front Running BOTs in the Big Box Banks?

A good argument could be made that these "flasH" events are perfect for ponzi-ing value away from portfolios managed by retail money mangers.

Retail money managers use retail clients (like IAB, etc) for tick data and brokerage services and "allocation" systems to execute strategies usually based on back testing models. They could be working 20 or 30 portfolios and a couple of hundred symbols. They trade on long duration ticks, like 1 minute (or longer). Their trading systems can limit buy orders placed in one market day. In certain trading ranges, the buy stops get filled and no more shares are acquired for the rest of the market (day). Sell stops, even trading systems using dynamic floors, typically convert everything to cash when the market trends down, as especially quick during a "flash crash" event.

Bears are always setting bull traps. Give `em a little dip, the retail money manager's retail trading client buys the dip. Mmanipulate the tick down, real fast, and every share flagged to sell will attempt to convert to cash. Even if the retail money manager's trading system still has some head room to buy when the "flash" crash turns around, the cash available to trade has been sucked out from under them by the "act of g*d flash" crash because the "one minute tick" and floor strategies their allocation use were too far behind the market to avoid heavy losses.

Retail Money Managers typically use retail broker clients - which means their orders may not be filled at price, or at any price. The co-located HFT/Front Runners don't need broker (they don't even need a series 7), they're transacting directly (confirms and settlements) with the other side of the trade.

So when the HFT/Front Run Gangs completely destroy the Retail Money Manager trade, who they going to go after next? Each other? (that should be fun - we saw that back in Mar 2009).

Can't wait to see how the K-Street Brothels our houses of government have become bury the approaching collapse at sea!

[Josie]

I do not understand much of what is being said on this tape, or how the process works, but this sure sounds like a country bargain house/barn where you know some, if not many, are being fleeced (other than the ACTUAL sheep in the pasture outside).

Kinda makes you want to invest, doesn't it? Wow! I'm buying farmland...

[Harry Johnson]

None of the so called investment activity in this country produces any value. The so called investors are parasites skimming fortunes from the effort of others. High speed trading produces nothing but inflation. It serves no function except to scam people. A whole bunch of wall street traders and banksters belong in prison. Nothing less will allow our economy to recover.

[Dave]

I have to say I enjoyed the Riots video better. ; )

[LiberatedCitizen]

Chaos Has Struck The Stock Market Today, And Everyone Suspects That An Algorithm Has Gone Wild

http://www.businessinsider.com/market-trading-issues-knight-capital-tanking-2012-8

Planets Align for Stock Market Crash in 2013 ­− If Not Sooner

http://moneymorning.com/2012/07/30/planets-align-for-stock-market-crash-in-2013-if-not-sooner/

[Anon]

Only machines were left at that bottom. Look how artificial it looks.

[Paris]

Sounds like a horse race broadcast; and Goldman Sucks is buying