They call it high frequency transactions:
It is the hot new thing on Wall Street, a way for a handful of traders to master the stock market, peek at investors’ orders and, critics say, even subtly manipulate share prices.
It is called high-frequency trading — and it is suddenly one of the most talked-about and mysterious forces in the markets.
Powerful computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange, enable high-frequency traders to transmit millions of orders at lightning speed and, their detractors contend, reap billions at everyone else’s expense.
These systems are so fast they can outsmart or outrun other investors, humans and computers alike. And after growing in the shadows for years, they are generating lots of talk.
Nearly everyone on Wall Street is wondering how hedge funds and large banks like Goldman Sachs are making so much money so soon after the financial system nearly collapsed. High-frequency trading is one answer.
Maybe now that the NY Times is openly discussing this, something will happen.
HAHAHAHAHAHAHA.
Ugh
I read that earlier and my first thought was “how is this legal?”
I also liked this part:
High-frequency traders also benefit from competition among the various exchanges, which pay small fees that are often collected by the biggest and most active traders — typically a quarter of a cent per share to whoever arrives first. Those small payments, spread over millions of shares, help high-speed investors profit simply by trading enormous numbers of shares, even if they buy or sell at a modest loss.
So they get paid a fee merely for trading alot of shares? Which means they can earn a profit even if they have trading losses? Can I sign up for that deal?
the zerohedge.com people are all over this.
donovong
I have all the confidence in the world that rocket scientists like Harry Reid and Mitch McConnell will be able to deduce what is taking place and design legislation to control it. Really I do!
Can I have the red pill now?
Napoleon
This smells so illegal. It will be interesting to see if anything is done about it.
Woody
They used to call it “churning,” and in my Bidness law class days, 100 years ago, it was illegal…
amk
Bend over washington. wall street has arrived again.
El Cid
O/T: Texas Governor Threatens / Offers Secessiony-talk again:
Texas Governor Rick Perry says ‘we gonna invoke da 10th Amendment against Obamacare:
****************************
Gov. Rick Perry, raising the specter of a showdown with the Obama administration, suggested Thursday that he would consider invoking states’ rights protections under the 10th Amendment to resist the president’s healthcare plan, which he said would be “disastrous” for Texas.
Interviewed by conservative talk show host Mark Davis of Dallas’ WBAP/820 AM, Perry said his first hope is that Congress will defeat the plan, which both Perry and Davis described as “Obama Care.” But should it pass, Perry predicted that Texas and a “number” of states might resist the federal health mandate.
“I think you’ll hear states and governors standing up and saying ‘no’ to this type of encroachment on the states with their healthcare,” Perry said. “So my hope is that we never have to have that stand-up. But I’m certainly willing and ready for the fight if this administration continues to try to force their very expansive government philosophy down our collective throats.”
Permanent. Republican. Majority.
Shibby
Sounds like the scheme from Superman III.
All kidding aside, I’ve come to realize the whole system is now built to protect the rich and powerful. I’m young but I seem to remember a time when patriotism would dictate a 1% tax increase on the wealthiest to provide health care for all would be seen as simply be the right thing to do. Not today proles, daddy needs a new jet and a bonus.
geg6
Woody: Bingo! Churning it most certainly is. And has been illegal for eons. And I would think these fuckers should be perp walked by this afternoon. Oh, wait. Elliott Spitzer isn’t around because he paid some hookers with his own money. So he is too dirty to do the peoples’ work. Guess we’ll just overlook this then. No problem. Nothing to see here.
catclub
zero hedge is also all over the case of the guy who was arrested
(extremely promptly, apparently at the behest of the big bank)
for stealing some
wall street (GS? JPM) software that was used for the stealing by
(perhaps) inspecting packets sent to the market automated trading center.
Thieves don’t like people to steal from THEM.
flukebucket
These systems are so fast they can outsmart or outrun other investors, humans and computers alike.
The Singularity Is Near
PeakVT
Financial transaction tax, anyone?
Ty Lookwell
Would a Tobin Tax, properly implemented, put an end to this (while generating huge tax revenue)? Eventually, I think that will be the solution to this since you can’t beat – or outlaw – the tech. [edit…aha, PeakVT beat me to it]
Napoleon
Zero Hedge has a report from early this morning that includes a letter dated 7/20 that the SEC has opened an investigation.
http://www.zerohedge.com/article/so-it-begins-sec-commences-investigation-goldman-sachs-trading-practices
robertdsc
And to top it off, Timmy is fucking up some more:
HuffPo on sweetheart deals for the banks.
By a country mile, Timmy is Barack’s biggest mistake.
Dork
I’m sure they’ll curb this immediately, exactly at the moment they need banks to post big profits to pretend the recovery is on the way, to boost Wall Street so that peoples’ 401Ks quit bleeding, to boost politicians’ popularity for the 2010 elections.
Uh huh, it’ll be fixed. Sure.
MattF
NYT article goes on to note that “Goldman acknowledges that it profits from high-frequency trading, but disputes that it has an unfair advantage.” I.e., “We’re profiting from it, so how can it possibly be unfair?”
geg6
catclub: I have been following that case for a while, too. Hasn’t gotten enough press, but now that this has broken, perhaps…just perhaps. I think this is huge, but then the Wall Street thievery has been mind boggling for ages and it never seems to matter. But this seems so much easier to understand from a typical person point of view. The details of the trades and the IT issues may be convoluted, but what the purpose is, the fixed nature of payment for volumn and not value, and the secretive fixing of the game is easily understood and an experience everyone has had. I hope I’m right, but do not believe the odds are with me as people have disappointed me mightily the last 30 years in their ability to employ common sense..
MattF
OT, but– that business in New Jersey. The NYT reports that the FBI informant on whom the whole case is based once tried to pass a bogus $25,000,000 check at a PNC bank drive-in window. A trial with this guy as a star witness is going to be extremely unique.
CapMidnight
@donovong:
Financialed your transaction.
Anne Laurie
Remember the old “Army of One” advertising campaign? The Repubs are shooting for “A Majority of Less”. (tm)
How convenient that our patriotic Terrorist Abetting Snoopers, or whatever the acronym stands for, just happened to stumble upon the transactions that would get horrible anti-Free-Market hooker-payer Spitzer safely removed from the levers of power, and just in time for the Bush/Cheney “End of Days Cleanout”, too!
Face
OT:
I cannot understand this. You can get CNN headlines on T-shirts? Wha? Like this?
Xenos
Sounds like front running rather than churning to me. Churning is bad enough, but if Goldman is front running on their clients they ought to be shut down. At the very least, their customers need to abandon them en masse.
If they are using the computers to front run the entire market, as has been suggested, the NYX and Nasdaq should suspend them from trading.
ChrisS
Whatever, in a free market system corporations, banks, and traders are free to design their own computer systems, algorithms, and purchase rack space next to the exchange server. Besides, the Bush Administration signed more regulations into law than any previous administration. Obama, if he weren’t a socialist illegal immigrant, should move to repeal many regulations and continue to improve the efficiency of the market instead of trying to control it like some Harvard-trained Pol Pot. We recommend killing the capital gains tax, reduced domestic spending, increased military spending with an additional war in Venezuela to protect our national security interests there (but it ain’t about oil!).
This is the free market in action and it is glorious.
/Reason’d
Morbo
I can haz tranzakshun tacks nao?
Seriously though they’re clearly not afraid of the regulators; make a move that will cut into their bottom line. What does it have to take to get serious talk about a tax on speculation? The oil bubble didn’t seem to be enough. If they’re going to make millions of trades at lightning fast speed then we should tax their asses millions of times at lightning fast speed. Would $.25 per trade be too much to ask? Hell, make it a nickel. Actual investors aren’t going to be scared off by such a thing. But maybe the speculators will think twice if they have to pay a price for market manipulation. Maybe they’re making too much money for that to matter. Fine, lucky them, if they can afford it then there are plenty of places that money can go.
–Oh, I must not be the only Dean Baker reader.
Sammy
If Goldman wasn’t doing this someone else would (and others are like Citadel and several other liquidity providers) Basically the market needs liquidity and the exchanges pay (on a sliding scale) tenths of a penny for people to supply it (you pay tenths of a share to take it). Having Goldman doing isn’t the inherant “wrong”…the conflict is that Goldman owns a big piece of the exchanges, so they’ve basically set up a system where they pay themselves to provide liqudity.
There are several easy solutions, have stocks trade at 5 cent intervals, stop paying for liquidity, or a larger transaction tax.
PeakVT
Timmy is Barack’s biggest mistake.
Until he nominates Summers for Fed chairman.
That’s something which is likely to make my head explode.
Maher’s post at HuffPo is pretty good. Sometimes the obvious needs to be restated.
Saragon
Is it bad that my first thought on seeing this story was of Damien Knight’s “Nanosecond Buyout”?
MikeN
Question to the group: This is straight out of a Science Fiction novel. Sagan, Bear, Asimov…I cant remember. The richest guy in the world was a geek that founded a company called “Microsecond Arbitrage” and made the trillions it would take to fund pie in the sky space exploration.
As I remember, he got his seed money by writing software that blocked religious nuttery on the TV that was eventually adapted to block advertising as well.
Anyone remember?
Warren Terra
I’m definitely enthusiastic about a tiny Transaction Tax to discourage churning, high-volume highly leveraged short-term speculation, and all that – but I note that while a lot of bloggers are aware of and rooting for this idea I haven’t heard even the slightest notion that anyone in power will so much as mention it – and that includes the highly-paid self-satisfied nitwits of Cable and Broadcast News.
In a related vein, I was just watching the first episode of the BBC drama The Hustle the other night, and in it the team of con artists convince their victim to bankroll trades taking advantage of a system they claim to have set up in which their purported ultra-fast computers give them an unfair advantage so they can basically steal from the stock market. Just five years ago scriptwriters were treating this as being something impossible that would just sound possible to a greedy and foolish mark – and twenty-five years earlier in The Sting the scriptwriters imagining a setup with rigged technology to give a trading advantage had to set it in the interwar years to make it plausible. Ah, the march of Progress.
slag
Honestly, what are all you people whining about? Don’t you know that, if high-frequency trading were in any way bad for us, the invisible hand in the sky would never allow it? Read a book!
amk
Right on the money :)
Normal People Call It Thievery
PaulW
They are openly admitting to this crap? And it’s really called ‘churning’… and it’s illegal???
three things:
1) every New Yorker earning under $80k a year needs to head to the DA’s office and swear out a complaint for fraud on these goddamn companies
2) every goddamn CEO of these firms need to do the perp walk and be held without bail
3) every college that gave these jokers their MBAs need to have their accreditations revoked immediately, ’cause obviously their schools of business do NOT teach ethics in any shape or form.
Alan
This is sanctioned by our government. How else can they keep the investment banks flush with money to perform their financial wizardry on all the underfunded pensions. The show must go on and on and on….
It reminds me of the German Colonel in the movie of the Battle of the Bulge. Start the video 50 seconds in.
retr2327
There’s an interesting connection to be made here if somebody wants to dig a little. A few weeks ago, the Sunday NYT magazine had a whole issue devoted to the architecture of technology, or some such, including an article about the vast, and largely hidden, network of massive servers being built around the country in ware-housed sized buildings.
One part of that article struck me as odd at the time: it mentioned something about NY trading houses moving to NJ to be nearer to a massive server there that ran the NY stock exchanges, and said that being a few miles closer — and therefore being able to execute trades quicker — was critical to being profitable.
At the time, I thought that was nuts: electronic ommunications are pretty damn fast, how could being 50 or so miles closer make a difference?
Now comes this front-running story, all about how GS is making billions by intercepting and beating pending trades by fractions of a second.
Hmmm.
Moe Gamble
I haven’t looked into this in detail, but I’m pretty sure I read back when this story first broke that Goldman and others were being used as market makers. Goldman turned out to be best at providing the greatest market liquidity (because of their program), so they pretty much took over the role.
Speculators take on price risk that commercial traders don’t want. Market makers take on volatility risk. Their profit from nicking other participants a tiny bit on each trade is the premium the market pays them to take that risk. Market makers are an essential and long-standing part of well-functioning markets.
Goldman and other banks have done plenty wrong (freerolls on other people’s money, ridiculous risk-taking, buying the Congress, selling products they know are faulty), but I don’t think this is one of those things.
Anoniminous
Sorry but this is a made-up story from the LIEberals who control the New York Times.
Everybody knows, because Neo-Classical Economic Theory (NCET) tells us so, all market participants act independently on the basis of full and relevant information. From this it is immediately obvious the information used by those engaged in high frequency transactions is instantaneously known to all market participants. If these people choose not to act on that information … well, whose fault is that?
Xenos
@MikeN: I remember a Heinlein or Poul Anderson story with that premise. It would have been an early ’60s novella. Beyond that it is way too fuzzy, as I read it back in the late ’70s.
The name ‘microsecond arbitrage’ appears to come from Vonnegut, PBUH.
gopher2b
@Woody:
This looks a lot like front-running (which is also illegal)
gopher2b
@Xenos:
what he said
Anoniminous
@Warren Terra:
The powers-that-be came from the financial sector, primarily Goldman Sachs. They aren’t about to inflict a Transaction Tax on themselves
Ed Drone
When I go to purchase something, whether at the grocery store (for non-food items) or the guitar store or the yarn store (for my wife — I can’t knit worth a damn, but I pick pretty good), I pay a transaction tax. It’s called a “sales tax,” and it’s ubiquitous. There’s even some support for a national sales tax, to replace that awful, awful income tax, (but don’t call it by that European name, “Value Added Tax,” or VAT).
So why should we not tax investments the same way? Every transaction we’re talking about here is a sale, isn’t it? So a transaction tax it is; welcome to the club, Mr. Big-Time Investor! You get to be nickle-and-dimed with every transaction, just like us working schlubs! Maybe we could put a FICA tax on there, too, since it’s our money that’s “working.”
I’m all for fairness, you know.
Ed
liberal
@Moe Gamble:
True, but IIRC it’s commonly understood that market makers are liable to abuse their role and unfairly profit.
liberal
@retr2327:
I’m hardly an expert on network latency, but 50 miles isn’t necessarily 50 miles—depends on the number of hops in between.
Xenos
FWIW, the transaction tax as promoted, with some historical context, by Thom Hartmann at Huffpo, here.
liberal
@Xenos:
Yeah.
JackieBinAZ
Pay no attention. That’s just the invisible hand picking your pocket.
Catsy
A site full of geeks, and no one has made the blisteringly obvious Office Space reference?
Granted, what they were doing was a slightly different type of scam, but the similarities are striking.
Zifnab
@Ed Drone:
Because taxing money spent on actual goods and services helps to discourage excess spending, but taxing money spent on investment destroys the underpinnings of a capitalist society.
The GOP mindset is fundamentally about hording wealth. You shouldn’t ever spend money on things. Things are a luxury. You should only ever spend money on business investment that generates additional income.
Gordon, The Big Express Engine
On a somewhat related note, the US govt. made a 23% annualized return on the money loaned to Goldman Sachs. Not too shabby.
Warren Buffett made nearly twice that much at 44% on his investment Goldman.
The Raven
Oh, my, food for corvids.
It is of course the SECs job to stop such things, but with the Senate only approving business-friendly commissioners for some years now, not bloody likely.
Martin
Seriously, that’s the only way to stop this. No sooner would they pass a law to stop this than they’d find a way around it. Even if we didn’t need the revenue, we need to do this.
And ‘conservatives’ should be screaming to the ceiling about this because this is a game that the public cannot possibly compete in. The market is clearly being rigged by the clearinghouses, and you have to go through the clearinghouses.
Martin
There’s no realistic way that they could stay ahead of this kind of stuff. I mean, even the most proactive SEC would miss this kind of thing for months at a time (which is more than long enough to make it profitable to do it).
A transaction tax would mean that even if the SEC missed it, they would have a range of remedies against the company for breaking the tax code.
b-psycho
@PeakVT: Can I just say I’m pleasantly surprised to see other people bringing this up?
If I were called upon to single-handedly reform the tax code, I’d abolish the whole thing & decree that only the following things may be taxed: land value, profit from natural resource extraction, and automated financial transactions. As long as government insists on existing, it only makes sense that it be paid for by the people who benefit the most from its force monopoly.
liberal
@b-psycho:
Another (quasi-)Georgist here? Teh awesome!
Buggy Ding Dong
Hey, when have mysterious ways of manipulating the markets ever gotten our economy in trouble?
Relax. We can trust that these folks are just doing the right thing and aren’t finding another way to line their pockets with our money.
Justin
This is all technically accurate and collectively nonsense.
Kevin
So, a goldman (or one of the other companies) client puts an order to buy 10000 shares of X stock. Goldman’s computer picks up on this, swoops in, starts trading millions of shares a second, drives the price up, and basically steals from their own client.
Did I get that about right? How is this not illegal? This is front running. I’d love to see a client take them to court (then again, they probably have thousands of fine print disclaimers letting them get away with this crap).
Martin
My guess is that they aren’t taking the client order data directly but snooping on it in some other way. Instead, there’s a chinese wall set up so that the computer trading system somehow predicts that there’s a 10,000 share order and then does it’s thing. Further, I doubt it’s triggered by single orders, rather by sudden swings in a stocks trading volume.
I think front running has the expectation that you know the orders. These guys probably don’t (they’re on the other side of the wall), but have various ways of sussing out the info they need fast enough. They probably justify it as a sort of Level 0 system that gives them the same advantage that the L1 guys have on the L2 folks.
It’s still all a scam, but I have no doubt there are enough loopholes in the current laws that clever geeks can find their way through easily enough. It’s like copy protection – it always fails in the end.
Kevin
I don’t believe this is churning. Churning (to my knowledge) is trading on your clients behalf more then required to get commission from them. Basically, you are bleeding your customer with transaction fees. This computer software isn’t trading on clients behalf, it is trading for the companies trading desk, so it isn’t making trades to collect commission from clients, and is therefore not churning.
Kevin
Thanks Martin, makes sense.
Would market makers like we have in Canada work better to provide liquidity to the market without the distortions caused by these computers? I think the system is more transparent. Less liquid, but really, this seems like fake liquidity anyway. If half the trades are from these computers, then half the trades are artificial and pretty much useless.
bjacques
@33: That Battle of the Bulge clip was chock full of Wilhelm-y goodness!
Napoleon
@Alan:
Alan said: “It reminds me of the German Colonel in the movie of the Battle of the Bulge. Start the video 50 seconds in.”
I guess burning to death beats being eaten by a shark.
Woody
“Churning”
“Front running” (was not a term of art when I did Bidness law 100 years ago–what’s the accepted definition?_)
Whatever, it’s illegal, and unethical (though the latter term has ZERO meaning in the financial world)…it’s the ultimate in ‘insider’ trading and should be stopped and punished.
machine
JPMorganChase’s patented adaptive program trading: Accept no substitutes.
gopher2b
My guess is the computers are analyzing the stop-loss type orders and figuring out where the triggers points are and then forcing the price to that point.
For example, the computer looks at Google which is selling at $450. It notices that 100,000 sell orders at $445 and also knows that if 100,000 sell order hit the market then the stock will spiral. It also sees 200,000 buy order if it hits $438. So, it forces the price down to $445 by selling naked shorts starting a spiral and buys them back at $439 before the stock hits the second trigger. No human could do this across the entire exchange but a computer could easily figure this stuff out.
I don’t think this would be front-running but its definitely manipulation.
Montysano (All Hail Marx & Lennon)
Karl Denninger does a good job of explaining it over at his place. Karl and his minions are a bit wingnutty for my tastes, but to his credit he has been consistent in his call to mercilessly expunge the fraud from the financial markets. IIRC he voted for Obama simply on the hope the Obama would put an end to, as Denninger calls it, “the bezzle”.
It works like this: let’s say that you and I are sitting at two computers, bidding on an Ebay item. You’ve bid $5.00. I bid $3.50, $4.00, $4.50, then $5.25. Suddenly I know that I’m the high bidder and your max price was $5.00.
What if you could gain that knowledge without actually bidding/buying/trading? It would be a huge, and unfair, advantage. By placing trades, and then almost instantly canceling them, the high frequency trader was able, through watching the reaction to those “flash trades”, to ascertain the other trader’s pricing thresholds.
blahblahblah
The stock market is rigged. All our 401Ks are beholden to these criminals. And the law is rigged so that we have to become unemployed in order to close out our accounts (at a 10% penalty) before we turn 59 1/2.
IOW: they’ve legally captured our savings and can now steal the money through repeated asset bubbles and crashes. It’s a game whereby Wall Street parasitizes off of the entire economy – everything useful that human beings do for money – to the point where their host can now no longer survive.
This will end very badly for all, including the parasites.
Wile E. Quixote
@Anne Laurie
Fuck Eliot Spitzer and fuck the dumb liberal bastards who think the guy was some kind of hero. Spitzer was and is a hypocritical piece of shit. He used the full power of the NY AG’s office to go after prostitution rings. He’s no better than Larry Craig or “Diaper Dave” Vitter, Spitzer talked tough about prostitution and its negative effects, except when he needed to hire a whore himself. The fact that Spitzer got caught shows what a completely and totally stupid moron he is, or shows that he’s such an arrogant prick that he thought that it was different when he wanted to hire a hooker, or both.
But of course Spitzer went after Wall Street and Wall Street is today’s two minute hate, so we can forget about Spitzer’s hypocrisy and his sense of entitlement because he’s saying mean things about Wall Street, and hey, that’s all that counts, regardless of how stupid, arrogant, hypocritical or entitled the speaker.
Wile E. Quixote
I think we need a new financial fraud law to deal with things like this. The sentence should be five years in a federal prison plus 1 month for every $100,000 that was illegally gained and no parole. “What, you defrauded people of $100,000,000 through rigging the market? Well let’s see, that’s five years plus 1 month for every $100,000 you gained so you’ll be in jail for five years plus 1,000 months or 88 years and four months. See you in late 2097.”
Wile E. Quixote
@Catsy
Office Space. And if only the guys doing this faced this kind of thing:
and of course
Normally I think that prison rape is a bad thing, but if we threw these bastards in Rikers and they ended up being raped in every orifice and getting AIDS as a result, well it’s no more than what they’ve been doing to everyone else for years. Plus there would be a certain deterrent value, pour encourager les autres and all that.
Wile E. Quixote
If this can be proven would the companies traded on these exchanges have standing for civil suits against the traders? Maybe the government won’t do anything but I’d be willing to bet that if some large corporation found out that it’s stock value had been fucked with by GS or any of these other bucket shop operators that they’d be pissed off and want some blood, and would be more willing to do something about it than anyone in the Senate.
Wile E. Quixote
@Anonimous
Yes, this information propagates through the luminiferous ether at speeds greater than c because Ayn Rand and the Chicago School of Economics say so.
J. Michael Neal
My guess is that gopher2b and Montysano have this figured out. I’d be very surprised if there is anything actually illegal going on here. Unethical, sure; illegal, not so much.
Hell, it isn’t even new. This is the kind of shit that NYSE specialists have always pulled, just at a faster speed. They’ve always manipulated the book to their own advantage. That’s why you pay the NYSE to become a specialist in the first place.*
As a market maker in options, there were few things that were more frustrating than to get hit with a decent, but not great, position and then watch your hedge evaporate. Or to be long gamma, set up your scalps, and then watch the stock get within a penny of your limit but never get there.
All Goldman has done is figure out how to do this better and faster than anyone before them.
As for a transaction tax, I’m all for it. Before thinking that it will solve everything, though, keep in mind that there are already transaction fees on trades, imposed by the exchanges. That’s a part of what your broker is charging you for when you place a trade. A transaction tax would simply increase what you pay.
*The specialist in a stock is sort of the super market maker, who not only has quotes in the market at all times, but also is the one that runs the book of stop/loss and limit orders that are placed. They are responsible for making sure that the market in a stock is orderly.
J. Michael Neal
@robertdsc:
I don’t worry about this that much. In fact, in these cases, I’m on the side of the banks. These are companies that never needed the TARP money, because they were well run. They’re on the list of banks that Paulson forced to take the money so that no one was singled out as being in bad shape. I can understand why they are upset that they were forced to give the government warrants for a loan they didn’t need, and are required to buy them back.
EcoRI
MikeN:
I think that’s from Contact by Carl Sagan. The programs that blocked television ads and nuttery were called “AdNix” and “PreachNix”, respectively.
TenguPhule
Truth in Television: Why don’t you just shoot them?!
Chumbulina
I remember reading “Hocus Pocus” in my early undergraduate years in the late 90’s and finding the nightmarish American future predicted by Vonnegut to be insubstantially dismal given the prosperity of the time. He foretold of an America whose wealthy ruling class had driven up a national debt that made America hopelessly beholden to foreign interests, bankrupted the country causing public services and infrastructure to rot, and consequently left an increasingly ignorant and apathetic public that could not possibly cope with their mess. Now it seems that this prediction was eerily far-sighted, particularly his prediction of advent what is now termed ‘high-frequency trading” (Microsecond Arbitrage in the book) as a mechanism by which the self-serving elite unfairly enriches itself the nation’s expense.