In this week's Off the Cuff podcast, Chris and Mish discuss:
- HFT Hub-bub
- Finally(!) the world is awakening to this abuse of the system
- Poking the Russian Bear
- Our foreign policy is looking misguided & dangerous
- Magical Stock Price Levitation Continues
- You can't deny today's prices, but neither can you justify them
- HFT Uproar As The Pin That Pricks The Bubble?
- Market tops happen when there is sentiment shift
In the wake of the dust kicked up by Michael Lewis' new book Flash Boys, Chris and Mish revisit the negative impact high frequency trading (HFT) has had on the financial markets. It's a topic that they've covered much in the past, so there's little new here except to cheer that the mainstream media is now being forced to talk about its unfair and abusive price manipulation.
Hopefully, the elevated discussion puts HFT permanently into society's conscientiousness and, as is happening with IEX, provides incentive for entrepreneurs to solve the problem (vs relying on our chronically ineffective regulators).
Meanwhile, the party in stocks (ironically largely driven by HFT algorithms) continues. Bad news, good news, no news – all seem reasons for stocks to rally back to all-time highs. Of course, there's very little in the macro data to validate such optimism, and the increasing friction among world powers – particularly with Russia – would merit some prudence & caution in the markets, were they sane.
by macro2682