Remember the Flash Crash of 2010? In which the Dow Jones Industrial Average plunged about 1000 points—or about nine percent—only to recover those losses within minutes? No? Well I guess it was not worth worrying about anyway. Lots of theories and well it didn't happen again... from CNBC TODAY:
Shares of Apple, the world’s most valuable company, plunged 9 percent on a single trade, causing it to be halted by the single stock circuit breaker rule because of volatility...In a cruel twist of fate BATS or Bats Global Markets Inc. was on its way to an Initial Public Offering (IPO) which it has now canceled, from Bloomberg News:
“It looks like a fat finger mistake,” said Joe Terranova, chief market strategist for Virtus Investment Partners.
But there could be other factors involved. Nine minutes before the way out of market trade took place, BATS sent an alert stating, “Please be advised that BATS is currently investigating system issues trading in symbols range A through BF.”
Bats Global Markets Inc., the six- year-old equity exchange, canceled its initial public offering, stunning Wall Street after errors on its own computer systems derailed trading in the stock and forced a halt in Apple Inc. (AAPL)Clearly High Frequency Trading (HFT) or Flash Trading which is believed to be responsible for the Flash Crash in 2012 has not been reined in much at all and still makes up a considerable portion of trading activity, from Bloomberg again.
“We believe withdrawing the IPO is the appropriate action to take for our company and our shareholders,” Joe Ratterman, the chief executive officer, said in a statement. Asked if that meant Bats is no longer going public, Randy Williams, a company spokesman, replied by e-mail, “Yes, that’s correct.”
About 55 percent of U.S. equities volume comes from firms using high-frequency trading strategies, Adam Sussman, a partner and director of research at Tabb Group, said in December. More than half of that -- 32 percent of total stock volume -- is from market makers supplying bids and offers, he said.This is on the heels of news that Goldman Sachs will be replacing employees with automated systems with a greater reliance on computerized systems like Flash Trading, from Reuters:
Many of the cuts are aimed at traders who can be replaced with new technology, or back-office, technology and operations staff who can be replaced with less expensive employees, the source said.Now Wall Street needs even fewer Banksters to sponge off the Real Economy. And as an added bonus - we know how important bonuses are - their activities can be even riskier! Why regulate when you can... not regulate. It makes sense if you don't think about it.
Don't worry the Banks can never fail so we can all pick up the tab for these crashes and anything else this increasing pointedly sharp pyramid scheme yields. Neo-feudalism with electronic Calvary.