by Scott Thill
from AlterNet Website
That's another way of saying that it remains only the market makers that caused the largest single-day point decline in Dow Jones history who actually know where the bodies are buried.
The rest of us, including the SEC, have a Sisyphean task of sifting through mountains of dense data.
But regardless of who ends up on the end of possible criminal proceedings, the SEC is sure that the whole clusterstock was seriously exacerbated by the robo-traders executing light-speed electronic transactions via supercomputers, while exposing our hyperreal economy as an Internet-worked casino.
If anything, the Flash Crash proved that market makers like Goldman Sachs and plenty more playing both sides of securities could be capable - with the high-priced help of math and computer science Ph.Ds crafting up proprietary, recursive algorithms - of wiping out any corporation's stock, perhaps any nation's economy, in a comparative instant with just the press of a button.
That is the primary concern of the SEC as well.
But it's going to have a hell of a hard time figuring out the human brains behind the inhuman bids that remotely reduced the price of some once-reliable stocks to mere pennies.
Thanks to the very technological innovations that has transformed last century's stock market into an inscrutable hyperreality programmed and deprogrammed daily by rapacious banksters, Wall Street's corruption cops are drowning in deeper paperwork, virtual and otherwise, than ever before.
What Schapiro and the SEC really need to crunch all that digital data are some genius math and science nerds, but they've all been conscripted by the market makers to game the global economy.
It pays stunningly well, even when it epically fails. After engineering a global crisis that has so far swelled America's national debt to $13 trillion, the too-big-to-fail banksters are now bigger, stronger and armed with bonuses for their predatory efforts.
In fact, that success has emboldened them to continue their intrepid devaluations.
Since the Flash Crash, the overall market has experienced severe devaluations marking off technical corrections that place it out of the reach of economic recovery.
Even in depressed economies, market makers make out just fine.
For those interested in the discrete details of the Flash Crash, the SEC's report is a labyrinthine walk down a dark alley populated by drowsy terminology, graphs, deconstructions and worse.
With unemployment still strong, industries still cratering and lending still conventionally disappeared, working people shouldn't have to give their valuable time to it, which is, of course, how the banksters win in the end. Especially since they pay more than the SEC ever will to sift through its shifty legerdemain. But the short version is simply a high-tech, high-speed variation on the type of confidence games that have been around forever.
The only difference now is that they can be gamed in eyeblinks by machines whose capacity for pattern recognition and algorithmic trading is faster than ours.
The shorter version is that they have no mercy, and there's nothing us puny humans can do about it.
What those machines saw during the Flash Crash, according to the SEC, were ridiculously priced bids valuing reportedly healthy companies at next to nothing.
Since then, we need, the SEC report explained,
Even so, the algorithms did their job, as Sanchez explained, and processed those quotes without what would constitute a rational human pause.
That lead directly to what Schapiro called "the
absurd result of valuable stocks being executed for a penny" in her Senate
testimony, and further evidence that when algorithms attack, they do so
according to their programming, even it doesn't make a lick of human sense.
Exacerbated by what the SEC report called "the withdrawal of liquidity by electronic market makers," it's pretty reasonable to assume that the Flash Crash's robo-traders attacked on purpose, searching and destroying their targets with callous accuracy, while the banks and traders supposedly committed to a "best execution" duty disappeared and let the machines tear up the trading day.
Some lost out, as
thousands of trades
were canceled. Others meanwhile, scored huge.
No trader with an ounce of sense would ever expect to nail Apple at $199, given its recent performance. But an enterprising investor placing a hopeful stub quote on a nonplussed computer at a laughable $199 could get lucky, provided he or she is supplied with the appropriately timed left-field Flash Crash.
The computer, certainly, isn't going to stop Apple's financially
insane stock fall or subsequent rise from happening, if it's expected to
profit from it.
In fact, the mounting evidence - despite all of the digital front-running strategies, securitized derivatives web-works or members-only traders' clubs - is spectacularly clear:
Sure, if one is expecting the worse of us to care about the distinction.
in our new millennium, humans and computers alike are executing gamed trades
using next-generation technology and algorithms whose morality is colder
than math itself. With them, there is no distinction between means and ends,
nor is there supposed to be. All that matters is the payday, in the end.
Everything else is collateral damage.
With each new innovation, we have found even newer ways to exploit our surroundings and each other. We took weapons designed to keep us well-fed, and used them to kill each other to the point of genocide. Our excessive fossil fuel consumption - which has increased our mobility, convenience and connectivity - has also led us to a climate crisis that could conceivably leave most of our planet uninhabitable within a couple cosmologically short centuries.
And especially lately, we have used our economic, mathematical and technological ingenuity to find ways not to make us all richer, but to wipe out trillions in wealth in the relative blink of an eye.
It's no wonder our algorithms are assholes.