by Bill Holter, Miles Franklin:
The buzz yesterday was all about the book by Michael Lewis, Flash Boys: A Wall Street revolt. I first heard the headline on 60 minutes “The Markets are rigged” and my blood started pumping. I thought to myself, wow, they’re finally telling the truth? What has happened for them to finally do a story like this? Then came the letdown. The story was about HFT’s (high frequency traders) that front run orders and chip off a penny or two on every trade…YAWN!
A penny or two on every trade? Who cares? Did you trade your brains out last year and do 100 trades? Then you got “ripped off” for $1…maybe $2. Did you do 1,000 trades? Well then, you got stiffed for $10-20 or the equivalent of 1 pound of good quality beef. Yes I agree, this “penny or two” on so many trades does add up to some serious money and should be outlawed. I ask you, is this big deal…in light of the fact that the global financial system “almost” melted down because of fraud yet no one went to jail? NO ONE! Heck, Jon Corzine commingled client funds, his firm went belly up and his clients were initially stiffed…and charges were not even filed…ever.
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