Dodd Urges SEC to Look at High-Speed Trading

[ShockediSay]

Source: Associated Press

Federal regulators have got to address the ''casino environment'' on Wall Street where computerized high-frequency trading can trigger market-shaking turmoil, Senate Banking Committee Chairman Chris Dodd said Sunday.

Dodd, D-Conn., pointed to the new phenomena of computers buying and selling stock in nanoseconds as a possible cause of last Thursday's meltdown. The market fell nearly 1,000 points within minutes before rebounding.

The top Republican on the committee, Sen. Richard Shelby of Alabama, joined Dodd on CBS' ''Face the Nation'' to agree that something must be done about a situation in which technology has gotten ahead of the regulators. ''You've got a high risk in the market place that something could go wrong and once it really goes wrong it could be catastrophic,'' Shelby said.

Dodd said his committee will hold hearings on last Thursday's events. But he said that for now the priority is for the Securities and Exchange Commission and the Commodities Futures Trading Commission to come up quickly with answers for dealing with high-frequency trading marked by a lack of marketwide circuit breakers to prevent the market from spiraling out of control.

Read more: http://www.nytimes.com/aponline/2010/05/09/us/politics/AP-US-Wall-Street-Meltdown-Congress.html?ref=news

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High speed trading is just a hi tech version of unlawful 'trading ahead' IMHO

See also
http://www.nytimes.com/aponline/2010/05/09/us/politics/AP-US-Wall-Street-National-Security.html?_r=1&ref=news
White House Sees No Cyber Attack on Wall Street

So who's our worst enemy?
Foreigners on the outside
or Big Corporate Greed within?

[BumRushDaShow]

1. And what corporate banking entity has the faster computer of them all?

Goldman Sachs Tops JPMorgan as World’s Best Broker (Update1)

By Jeff Kearns, Whitney Kisling and Nina Mehta

Jan. 29 (Bloomberg) -- The near darkness behind the bulletproof doors of a windowless Secaucus, New Jersey, warehouse is humming with tens of thousands of computers as U.S. exchanges open on a December Friday. New York-based Goldman also swept the competition in the three regional categories: Asia, Europe and North America. Last time, Goldman placed sixth worldwide and second in Europe; it was a no-show in the top five in North America.

<snip>

“They have the most developed and advanced electronic systems,” says Roger Freeman, an analyst who covers brokerages and exchanges at Barclays Plc in New York. “They can get some of the fastest execution times on trades, thereby minimizing some potential costs.”

<snip>

U.S. stocks had their most-violent swings in almost eight decades in 2008, pushing the Chicago Board Options Exchange Volatility Index, or VIX, to a record 80.86 in November of that year. The index, which measures the cost of using options as insurance against S&P 500 declines, is a gauge of investor uncertainty. It averaged 20.28 over its two-decade history and 38.91 in the first half of 2009.

<snip>

With so much money at stake, the technology arms race that spawned millions of dollars’ worth of buzzing computers in Secaucus shows no sign of letting up.

“Equities is a technology business now,” Tabb Group’s McPartland says.

What the humans need to do is to make sure their firms have the best equipment, trading know-how and programmers.

More at link: http://www.bloomberg.com/apps/news?pid=20601109&sid=aNykT4DvHd9A">http://www.bloomberg.com/apps/news?pid=20601109&sid=aNykT4DvHd9A

And remember when their code was "stolen"? http://www.bloomberg.com/apps/news?pid=20601087&sid=ajIMch.ErnD4">http://www.bloomberg.com/apps/news?pid=20601087&sid=ajIMch.ErnD4

[wroberts189]

3. Thx.. glad someone posted that info. nt

[Prometheus Bound]

5. Somehow it doen't seem fair that the guy with the fastest computer makes the money.

[Enthusiast]

2. After voting against the Brown amendment

it is clear that Dodd only has the bank's interests in mind. He has NO credibility.

[wroberts189]

4. knr

[ima_sinnic]

6. oh yeah, sure, we'll "look at" high-speed trading *wink wink* nod nod

I'm sure they will "do something" and then go celebrate with their favorite politicians with Cuban cigars, clinking champagne glasses, and back-slapping attaboys before returning to the casino.