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Is the U.S. stock market rigged?
CBSNews ^ | Mar 30, 2014 | Steve Kroft

Posted on 03/31/2014 8:56:49 PM PDT by Ray76

This month marks the fifth anniversary of the current bull market on Wall Street, making it one of the longest and strongest in history. Yet U.S. stock ownership is at a record low and less than half of Americans trust banks and financial services. And in the last two weeks, the New York attorney general and the Commodities Futures Trading Commission in Washington have both launched investigations into high-frequency computerized stock trading that now controls more than half the market.

The probes were announced just ahead of a much anticipated book on the subject by best-selling author Michael Lewis called "Flash Boys."

(Excerpt) Read more at cbsnews.com ...


TOPICS: Books/Literature
KEYWORDS: bookreview; obamarecession; obamataxhikes; occutard; occutardation; occutards; redistribution; reparations; stevekroft

1 posted on 03/31/2014 8:56:49 PM PDT by Ray76
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To: Ray76

Big banks big money rigs everything.


2 posted on 03/31/2014 9:02:04 PM PDT by WILLIALAL
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To: Ray76

Does a bull emit bull$#!t?
Does a bear defecate in the woods?
;-D


3 posted on 03/31/2014 9:03:32 PM PDT by rfp1234 (Hail Obambi, our Deer Leader)
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To: Ray76

The wealthy bankers, Wall Street insiders and they’re co-conspirators in D.C. totally manipulate everything...


4 posted on 03/31/2014 9:06:28 PM PDT by dragnet2 (Diversion and evasion are tools of deceit)
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To: Ray76

The stock market is another welfare program, subsidized to the hilt, and rigged to keep the game going. And that is what it is, another computer game, a virtual reality within the virtual reality of the US economy and the world economy. God help us all when the game breaks down.


5 posted on 03/31/2014 9:13:17 PM PDT by pallis
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To: All

I wish I was more articulate to explain this better. anybody who is can smooth it out for me.

when a local crook commits a crime, he gets arrested by the local cops.
if the local cops get out of line, the staties of fbi ge involved.
if the fbi gets corrupt, citizens pressure congress for hearings.
if a congressman takes a bribe, the doj can get involved.

but, if ben Bernanke is skimming the fed, its done in cahoots with people who have reign over congress, the fbi, doj, they don’t answer to anybody. for example, if there is a bildeberger, there is legal body that can arrest them, all the members run those bodies.

so yeah, I believe its rigged and they don’t answer to anybody.


6 posted on 03/31/2014 9:14:21 PM PDT by willywill
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To: Ray76

It’s not “rigged” exactly, but the ultra fast frequent traders whole business model is based on, in essence, making a profit by making other buyers pay slightly more than they otherwise would have paid.

The whole thing can be largely fixed by making the electronic “auctions” happen only once every second. Then milliseconds advance knowledge advantages will largely not matter.


7 posted on 03/31/2014 9:17:16 PM PDT by House Atreides
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To: Ray76

big baks == the fed. yes.

you can cause growth orrcession by loosening or restricting the money supply. it’s been done.


8 posted on 03/31/2014 9:29:09 PM PDT by Secret Agent Man (Gone Galt; Not averse to Going Bronson.)
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To: rfp1234

Which is why I am holding off on starting my retirement investments.

All of what is happening in the stock market is based on false moneys...Thanks to QE-BS.


9 posted on 03/31/2014 9:35:28 PM PDT by RandallFlagg ("I said I never had much use for one. Never said I didn't know how to use it." --Quigley)
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To: Ray76

The story at the link is a really fascinating read. Worth the jump to the link.


10 posted on 03/31/2014 9:40:42 PM PDT by gunsequalfreedom (Conservative is not a label of convenience. It is a guide to your actions.)
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To: gunsequalfreedom

does a one legged duck swim in circles?


11 posted on 03/31/2014 9:49:57 PM PDT by jneesy (rough seas make skillful sailors)
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To: dragnet2
I can see how if you didn't have to work a job-job, you could stay home and do option trading and make money....

but to stash away money here and there into the stock market and hold is probably just insane nowadays....

mutual funds are probably worse...

12 posted on 03/31/2014 9:53:29 PM PDT by cherry
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To: Ray76

Does a one legged duck swim in circle? It rigged by the fed, the broker - dealers probably, in most cases do not have inside fed info because if the did, it would be on every Bloomberg hoot(communication tool) yelling to their cronies , friends and families and you know that will be scooped by some media outlets.

Is market minipulation done? Well does ponochio have a wooden pecker?

I can tell you for a cetanity, thinly traded positions are minpulated or gamed depenends on counterparty relationship; almost all bids and offers go through Bloomberg terminals.

Yeah, there is always potential of rigging, but big x factor today is fed policy. Fed policy is a man made disaster in a free market / trade environment.


13 posted on 03/31/2014 9:56:21 PM PDT by guyfromjrz (fresh breath, it speaks for itself.)
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To: Ray76
It means: ..."they're able to identify your desire to buy shares in Microsoft and buy 'em in front of you and sell 'em back to you at a higher price...... It all happens in infinitesimally small periods of time..... There's speed advantage that the faster traders have is milliseconds, some of it is fractions of milliseconds..... But it''s enough for them to identify what you're gonna do and do it before you do it at your expense........ So it drives the price up, and in turn you pay a higher price....of which they gain by selling it to you.

I listened to them talking about this tonight.....once again Computer enables corrupt practices faster than a blink


14 posted on 03/31/2014 10:01:39 PM PDT by caww
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To: gunsequalfreedom

Both the insight into the mechanics of the exchanges and the manner in which the front-loading was discovered and how it was dealt with is very interesting.


15 posted on 03/31/2014 10:01:45 PM PDT by Ray76 (Profit from the mistakes of others, you'll never live long enough to make them all yourself.)
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To: WILLIALAL

Been saying this for years


16 posted on 03/31/2014 10:12:48 PM PDT by jsanders2001
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To: caww

Too add, GS, UBS, MS, Pershing(largerst US security clearing firm ) and others have orders executed out of Jersey City, Hoboken or Weehaken becausec of greater and more capable it and fiber optics. A half a second can be a difference maker by 1-1.5 percent return on large volume trading.. A good spread is usually between 70 to 160 basis points. High doped routing can add 20 basis points. That’s huge in relevancy.

Technology is a difference maker. The old NY building don’t have the tech like Jersey city due to age.


17 posted on 03/31/2014 10:15:14 PM PDT by guyfromjrz (fresh breath, it speaks for itself.)
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To: Ray76
Rigged? These skimmers are doing what nearly every other speculator does: they try to succeed by following others that know more than they do about a stock.

I really don't care if know-nothings are making less money because other know-nothings are using faster computers to make more.

The market works when the participants stop being followers and hangers-on. If you think a stock is worth a certain price, but when the stock is sold below that price and sell when the stock is above that price. Everything else is gambling or skimming.

18 posted on 03/31/2014 10:20:45 PM PDT by freerepublicchat
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To: jneesy
does a one legged duck swim in circles?

Are you talking about a Geico commercial?

But to more directly answer your question, I did look it up. Yes, they do swim in circles.

http://youtu.be/tqDwER9QQwQ

19 posted on 03/31/2014 10:21:12 PM PDT by gunsequalfreedom (Conservative is not a label of convenience. It is a guide to your actions.)
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To: willywill
I wish I was more articulate to explain this better. anybody who is can smooth it out for me.

You did fine in your explanation. Making an attempt as saying it a little differently, any member of Congress that tries to take on the banking establishment will not get reelected.

20 posted on 03/31/2014 10:24:06 PM PDT by gunsequalfreedom (Conservative is not a label of convenience. It is a guide to your actions.)
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To: guyfromjrz
...."Technology is a difference maker"......

Note "date"


21 posted on 03/31/2014 10:24:54 PM PDT by caww
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To: Ray76

Alright, all you market critics. If you are not in the market, where are you investing for growth?


22 posted on 03/31/2014 10:25:16 PM PDT by lurk
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To: guyfromjrz

23 posted on 03/31/2014 10:29:26 PM PDT by caww
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To: guyfromjrz

24 posted on 03/31/2014 10:29:27 PM PDT by caww
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To: Ray76

Hmm. Does QE exist?


25 posted on 03/31/2014 10:51:13 PM PDT by andyk (I have sworn...eternal hostility against every form of tyranny over the mind of man.)
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To: Ray76

Absolute lies, for 120 years. Catch your breath, or be dined upon.


26 posted on 03/31/2014 11:00:19 PM PDT by RedHeeler
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To: Ray76

Denninger, ZH, and the Market/gold bugs on here have been screaming this for close to SIX years and now this clown comes along and the MSM is all OH MY GOD, REALLY???

WTF... :-|


27 posted on 03/31/2014 11:21:18 PM PDT by Axenolith (Government blows, and that which governs least, blows least...)
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To: freerepublicchat

It is ILLEGAL to place and pull market orders without the intent to execute. HFT does this for a good 30-70% of any given total days activities.


28 posted on 03/31/2014 11:23:19 PM PDT by Axenolith (Government blows, and that which governs least, blows least...)
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To: Ray76
I don't get it.

Here's how I buy I stock.

I research the financials, I study the charts, then I study the sector, then I assess general market sentiment.

I set the price I'm willing to pay.

I set the number of shares I want to buy.

I send a “limit” order.

If I can't get filled at my price or my share count, my order is cancelled.

The high speed traders can't touch me.

If they artificially raise the price, then, at some point in time, the price may come back down, and I'll buy then.

If the stock stays above the price I'm willing to pay, then I look for new stocks to buy.

Any mutual fund, any hedge fund, any institutional buyer can do EXACTLY the same thing I do.

29 posted on 04/01/2014 1:27:53 AM PDT by zeestephen
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To: House Atreides
RE: “The whole thing can be largely fixed by making the electronic “auctions” happen only once every second.”

Or.....

Buyers and sellers can use “limit” orders.

If you don't get your exact price, or, if you don't get your exact share count, your order is cancelled.

End of story.

High speed traders are completely irrelevant in a world of
“limit” orders.

30 posted on 04/01/2014 1:33:38 AM PDT by zeestephen
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To: zeestephen

The skimmers see your trade and act upon it before your trade occurs. Your trade goes through their system. Read the article.


31 posted on 04/01/2014 1:35:07 AM PDT by Ray76 (Profit from the mistakes of others, you'll never live long enough to make them all yourself.)
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To: Ray76

Is CBS believable?


32 posted on 04/01/2014 1:37:02 AM PDT by abb
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To: Ray76

They can’t “act” on my trade.

They have two choices.

They can fill my “limit” order - exactly at my terms.

Or, they can ignore it.

There is no “third” choice.


33 posted on 04/01/2014 1:45:08 AM PDT by zeestephen
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To: zeestephen

By act I mean act upon having knowledge of your trade and place a trade before your trade. Read the article to see what was happening to trades.


34 posted on 04/01/2014 2:53:43 AM PDT by Ray76 (Profit from the mistakes of others, you'll never live long enough to make them all yourself.)
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To: caww
It means: ..."they're able to identify your desire to buy shares in Microsoft and buy 'em in front of you and sell 'em back to you at a higher price

I am not sure they would ever want to buy in front of me. Whenever I buy a stock, it immediately seems to drop for some reason;-)
35 posted on 04/01/2014 3:09:20 AM PDT by Red in Blue PA (When Injustice becomes Law, Resistance Becomes Duty.-Thomas Jefferson)
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To: guyfromjrz

Had a call from a business acquaintance who told me about a penny stock that was lightly traded and how we and some friends could set up a pump and dump scheme. I also know other folks in the same business that he approached with the same scam. I did not bite mainly cause I didn’t figure I would like prison food and didn’t want to be the last holder of the stock. This was in the ‘90’s when pump and dumps were all the rage. All markets are rigged where there is a lot of money involved, years ago the Mob was even involved. Nothing new under the sun.


36 posted on 04/01/2014 3:22:04 AM PDT by Foundahardheadedwoman (God don't have a statute of limitations)
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To: Ray76

Ray, have you ever traded a stock?

The only way high speed traders can affect the price you pay is if you use a “Market” order.

I have no idea why anyone would ever use a “Market” order.

If you use a “Limit” order, your order MUST be filled at the exact terms you specify, or it cannot be filled at all.


37 posted on 04/01/2014 3:22:46 AM PDT by zeestephen
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To: zeestephen
This seems to me to be much ado about nothing. They're talking about pennies, or maybe fractions of pennies per share.

Ordinary people deal in a few hundreds, maybe a thousand or so shares. So that's a few bucks. Big deal.

Broker fees, market fees, etc. far exceed these amounts.

You're going to make money when a stock you buy goes up, like say, 50% or maybe it doubles, splits, etc.

These pennies won't hurt you as much as sell-offs, bad company earnings, etc.

38 posted on 04/01/2014 3:38:03 AM PDT by eCSMaster ("It is not the color of his skin, ... it is the blackness that fills his soul")
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To: zeestephen

Aren’t you discounting the cost of a cancelled order?


39 posted on 04/01/2014 5:16:13 AM PDT by Theophilus (.)
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To: jsanders2001
been saying this for years

I used to make a little money reading the charts and combining it with reading up on sectors, news events, and common sense. Sometimes I could pick up on something before the mutual funds and big traders saw a trend.

I think it was about the time of the Enron meltdown, the beginning of the George 2 presidency, that it all got cloudy.

Now there's not much to find. Emerging companies are smart not to go public with very low stock prices because of the big trader and venture trading manipulations. Companies are going toward being closely held or staying private, unless or until they can do what Zuckerberg did and maximize the potential and go public for billions.

Here's what I've noticed. I don't buy or sell hardly anything anymore. But if I want to get in there, I offer a little more (penny per share or so) than "asking" for a purchase, and put in a "sell" for a little bit less.

That and those charts looking like they aren't moving in normal mathematical ways has me not at all surprised about this news.

40 posted on 04/01/2014 5:33:02 AM PDT by grania
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To: Ray76

Where does everyone think that QE money is going?


41 posted on 04/01/2014 5:40:11 AM PDT by cuban leaf
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To: Theophilus
If your broker charges you for cancelled orders or unfilled orders, then it's time to change your broker.

Some brokerage houses charge you extra for “Limit” orders.

If so, shop around, get a new broker.

42 posted on 04/01/2014 12:59:27 PM PDT by zeestephen
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; cardinal4; ColdOne; ...

Steve Kroft


43 posted on 04/01/2014 2:41:45 PM PDT by SunkenCiv (Obama is now making Jimmy Carter look like Attila the Hun. /focus/news/3138768/posts)
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To: pallis
Those who manipulate the market for financial gain do it at the expense of the elderly, the workin man.

Money doesn't just evaporate into thin air. The last market crash separated investors of hundreds of billions of hard earned dollars.

They'll get theirs in the end.

44 posted on 04/01/2014 3:24:03 PM PDT by servantboy777
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To: Red in Blue PA

45 posted on 04/01/2014 3:27:48 PM PDT by caww
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To: zeestephen

If I want into a stock, I believe it will rise significantly. That being the case, I don’t care about pennies.


46 posted on 04/01/2014 6:46:50 PM PDT by Red in Blue PA (When Injustice becomes Law, Resistance Becomes Duty.-Thomas Jefferson)
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To: zeestephen

I was not even thinking in those terms. I was thinking of the time, effort and opportunity costs one takes to decide to place an order.


47 posted on 04/01/2014 9:45:22 PM PDT by Theophilus (.)
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To: Theophilus

If you feel the stock market may be rigged, bail out entirely.

Focus your time and effort on real estate, or antique furniture, or start your own business.


48 posted on 04/02/2014 1:24:01 AM PDT by zeestephen
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To: servantboy777; All
money doesn't just evaporate into thin air

But it does disappear into cyberspace. I had a crazy thought, since coincidence is rarely just that:

This problem seems to coincide with the emergence of the bitcoin. Could this be the elusive source of bitcoin value?

49 posted on 04/02/2014 9:25:54 AM PDT by grania
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