Gaming Wall Street

You remember the "flash crash" back in May? Well, one trader believes the crash was created on purpose, and that it is only a matter of time before it happens again.

He gives Forbes 3 reasons why the next flash crash will be caused on purpose:

1. Because the last one was caused on purpose. The average quote volume on the NYSE is 10,000 per second. At one point on May 6, somebody launched 5,000 quotes at the NYSE for the ticker of Public Storage inside of one second. None of those quotes led to a trade—but that traffic by itself took the NYSE to 25% of its stable CQS capacity. So it’s clear that one trader or perhaps more discovered that by blasting the NYSE, they could introduce added latency in the CQS feed. Knowing that most players were looking at a delayed NYSE feed, anybody in the know could make easy arbitrage plays between the NYSE and other exchanges.

2. Because mini flash crashes have happened before. On April 28, for instance, the share prices of Wal-Mart and Procter dipped 50 cents for less than a second. If algorithms had been programmed knowing the dip was coming, profits are fat and easy.

3. The system has shown big delays more than once since then. It seems that whenever the NYSE receives more than 20,000 quotes per second, its CQS feed, which determines where many equity orders get routed, falls behind.

My advice? Keep your money in something safer than the stock market, or get to know one of these financial hackers very well.

Our Liberal News Media

This is today's New York Times home page.

I took the liberty of circling the stories that I believe express liberal bias, or toe the Democratic Party line.

New data has come to light concerning campaign contributions from self-identified employees of ABC, CBS, and NBC. In 2008, these people gave an overwhelming majority of their campaign contributions to Democratic candidates.

Senior executives, on-air personalities, producers, reporters, editors, writers and other self-identifying employees of ABC, CBS and NBC contributed more than $1 million to Democratic candidates and campaign committees in 2008, according to an analysis by The Examiner of data compiled by the Center for Responsive Politics.

The Democratic total of $1,020,816 was given by 1,160 employees of the three major broadcast television networks, with an average contribution of $880.

By contrast, only 193 of the employees contributed to Republican candidates and campaign committees, for a total of $142,863. The average Republican contribution was $744.

Disclosure of the heavily Democratic contributions by influential employees of the three major broadcast networks follows on the heels of controversy last week when it was learned that media baron Rupert Murdoch’s News Corp. contributed $1 million to the Republican Governors Association.

I suppose you should be aware that news site I'm quoting from has a decidedly conservative slant. The numbers used in the story, however, could not be more straightforward.

I'm ok if a majority of news reporters are liberal. That's their choice. But they shouldn't lie about it, or try to hide it. This does a disservice to the reader, who is only trying to get the Truth. Not the Liberal Truth, or the Conservative Truth. Just the truth.

I accept that FOX News is a neo-conservative propaganda factory. It's ok if you accept that the New York Times is a pinko-liberal mushhead pamphlet. If you read both sides, and accept their biases, then you can see between the lines to the real Truth.

Large media has lost the trust of the public. They should be looked at no differently than any random website or blog. When you read a fantastical claim on an unknown website, do you immediately believe it? Of course not.

Verify everything I write here. I try to give the truth, but I am only human. But at least I try.

Investigating Crooked Politicians

I just read this article and it got me thinking. Since we know our politicians are corrupt, both morally and legally, then shouldn't we have professional investigators working around the clock trying to find out exactly who is corrupt and exactly what they are doing? These politicians control our lives and have access to trillions of our dollars. Is it not reasonable, nay, logical to have these guys under constant surveillance to ensure they are working for our benefit and not their own?

Since our FBI has apparently decided that these investigations are unimportant, perhaps we should start a charity in which all the proceeds go to private investigators, who are hired to find out as much as they can about our people in power. We could capitalize on the anti-establishment fervor that is coursing through our nation, and turn that anger into something tangible without resorting to violence.

I think the benefits would be two-fold. First, we would root out the existing dirty politicians, which would be great, and second, if political candidates knew we were always watching them, then maybe they would try a little harder to walk the straight and narrow, and some of the dirtier politicians might stay out altogether.

What do you think?

Teddy Roosevelt [Quote]

I ganked this from a Facebook friend's profile.

It is not the critic who counts. Not the man who points out where the strong man stumbles, or the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena. Whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.

-Theodore Roosevelt

Joel, if you're reading this, thanks for the good words.

News For Adults

TIME Announces New Version Of Magazine Aimed At Adults

Mo' Money Mo' Problems

One of the reason's I am for a small government is that I believe large governments are more prone to corruption, for the simple reason that there is more money in large government, thus more incentive for unscrupulous individuals to develop creative ways to get at that money.

Case in point: the California public pension fund. This pension fund is huge, holding the retirement savings of 1.6 million employees of the state of California. Instead of just stuffing the fund under the mattress, California, like most groups with a pension fund, decided to invest it.

Now this is where it gets interesting. The California pension fund is enormous, worth approximately $180 billion dollars. Thus any fund manager who gets the California pension account will be instantly rich beyond his dreams. So it should come as no surprise that prospective fund managers regularly wined, dined, and bribed California officials to try to get the pension account.

Big piles of government money attract lobbyists and corruption like a big pile of shit attracts flies. It is a law of nature. Yet we act surprised when we find out about the corruption.

[Reason via Instapundit]

Pensions Commit Fraud, Want Bailout

Jim promised to pay Paul $5,000. Jim also promised to pay Peggy $5,000. Paul and Peggy go to Jim's office to collect their money. Unfortunately, Jim only has $5,000 total, which won't be enough. Jim is now shit out of luck.

That is, unless Jim is an underfunded union pension.

Our government, in its infinite wisdom, is now planning on bailing out the Jim's of the world, by giving our tax dollars to the underfunded pensions that promised out more money than they took in.

Many if not all of the pensions looking for a handout were set up in a way that they would never be able to meet their obligations. They simply promised too much money to retirees, and collected too little money from those who were still working. Usually when you do that, it's called "fraud" and it's illegal. When unions do it, however, they get $165 billion dollars to cover the financial hole left by their shady accounting, if the unions' congressional lapdogs get their way.

What is the point of working hard and paying taxes, if those tax dollars are simply given to crooks and liars?

Why Old Media is Dying

It's because people don't trust it. Only 25% of people trust newspapers, and only 22% trust TV news. If your business is selling information, and people don't believe you, you will soon find yourself out of a job.

Scientists Discover a Way to Pull Their Heads Out Of Their Asses

A 2003 initiative to share data and findings among 100 Alzheimer research studies has lead to a new understanding of the devastating disease.

This unprecedented data sharing is the result of a large group of scientists dropping their egos and getting together to get shit done--a rare feat in academia.

I can only hope this is the first in a growing trend of scientists acting like adults and working towards a better understanding of everything.

I'm looking forward to the science wiki featuring all data and findings of all the scientists in the world. I can only imagine what would happen if all the best research minds in the world collaborated to create a repository of their collective knowledge.

To quote the Instapundit, "Faster please."

Kurt Vonnegut's Rules for Writing

Short Stories:

1. Use the time of a total stranger in such a way that he or she will not feel the time was wasted.

2. Give the reader at least one character he or she can root for.

3. Every character should want something, even if it is only a glass of water.

4. Every sentence must do one of two things—reveal character or advance the action.

5. Start as close to the end as possible.

6. Be a Sadist. No matter how sweet and innocent your leading characters, make awful things happen to them—in order that the reader may see what they are made of.

7. Write to please just one person. If you open a window and make love to the world, so to speak, your story will get pneumonia.

8. Give your readers as much information as possible as soon as possible. To hell with suspense. Readers should have such complete understanding of what is going on, where and why, that they could finish the story themselves, should cockroaches eat the last few pages.

Other things I guess:

1. Find a subject you care about.
2. Do not ramble, though.
3. Keep it simple.
4. Have the guts to cut.
5. Sound like yourself.
6. Say what you mean to say.
7. Pity the readers.

Have I mentioned that Kurt Vonnegut is my hero?

The Crappy Economy is Getting Crappier

No one want's to spend money, according to a new Gallup Poll. Back to school time is usually a boon for retailers, but parents seem to be tightening their belts, as this year's self-reported spending is even lower than in 2009.

The picture becomes clearer when you add in the fact that nearly two-thirds of Americans believe the economy still hasn't hit rock bottom. Many those who still have jobs are convinced that the economy will fall even further, and are probably saving money or paying off debts instead of buying their kids a new Sponge Bob backpack.

My advice? Don't listen to me. It'll only depress you.

The US Constitution... on Facebook

I recently found a facebook page dedicated to the US Constitution. Naturally, I investigated what I assumed would be a haven of bright, politically motivated citizens who were concerned about the state of the nation and our departure from the words of our forefathers. I couldn't have been more wrong.

Link: http://www.facebook.com/usconstitution

Instead, what I found was a beehive of partisan knee jerking and uninformed sniping. Basically, a bad infection of Dumb.

My first post was simply "I like the US Constitution, I wish the government still followed it." I was immediately attacked by several people who must have assumed I was some kind of lunatic, and they demanded "one, just one" example of my claim. I gave them about 10 off the top of my head, and then left the stupids to soak it in. Not one of them could challenge what I said, but of course that didn't stop them from continuing their retarded bleating.

My point is that, if the discourse on that page is reflective of the nation at large, then we are truly fucked.

My second point is that if you are bored, and are looking for some way to improve this country that doesn't require moving from your computer, please go to this page and drop some knowledge on them. They need it. Bad.

edit: Looking back, this post is really harsh. But oh well, I'm not taking it down. Don't take it personally, because it isn't directed at you. It's more directed at my frustration with political discourse in general. These people at the US Constitution page are just my scapegoat. So yeah, I'm a nice guy, but not when I'm angry.

America Is 'Bankrupt Mickey Mouse Economy'

I've been saying it for a while, but here is a hedge fund manager agreeing with me.

"America today looks like Russia in 1998. Consumers, companies and the government are all highly indebted. America as a result is a bankrupt Mickey Mouse economy," Wermuth told CNBC.

"The big evil for the IMF in Russia in 1998 was the prospect of the central bank funding government debt. The Fed is now even buying mortgage-backed securities," he noted.

"Even before the (Troubled Asset Relief Program) and the expansion of the Fed's balance sheet, total US public and private debt as a percentage of GDP in the US stood at 290 percent, that figure is now far higher," Wermuth added.

"US credit risk is huge and America has two options, either default or let the currency depreciate substantially against currencies such as the yuan and the rouble," he explained.

"Last night's news from the Fed simply creates the right conditions for dollar weakness and a reduction in US liabilities to foreign investors and governments," Wermuth said.

Despite the horrific implications, it's comforting to know I'm not the only one who sees this coming.

[CNBC]

Joke

A guy goes to Conn. D.O.T. to apply for an inspection job. The interviewer asks him, "Have you been in the service?"

"Yes," he says. "I was in Viet Nam for three years"

The interviewer says, "That will give you extra points toward employment" and then the interviewer asks, "Are you disabled in any way?"

The guy says, "Yes 100%...a mortar round exploded near me and blew my testicles off." The interviewer tells the guy, "O.K. I can hire you right now. The hours are from 8:00 A.M. to 4:00 P.M. You can start tomorrow. Come in at 10:00 A.M."

The guy is puzzled and says, "If the hours are from 8:00 A.M. to 4:00 P.M. then why do you want me to come in at 10:00 A.M."

"This is a state job" the interviewer says. "For the first two hours we sit around scratching our balls.......no point in you coming in for that"


[Fazed]

Free Trade Is A Bust

The free traders told us that free trade would usher in a new level of prosperity, as we eliminated the costs of tariffs and quotas from our international economy. And they were right about that prosperity...in China.

Now, I'm all for free peoples being able to enter into agreements across borders. But as NAFTA and Chinese trade have shown us, these agreements don't always work as planned.

Free traders will tell you that reducing trade barriers produces a net increase in prosperity. They are right. What they didn't tell you was that net prosperity wont happen in America.

China, Mexico, and other nations with which we have easy trade all share advantages not available to us in America. They do not have the strict (and monetarily expensive) environmental protection policies that we have here in the US. They also have much lower minimum wages. These advantages allow them to produce the same products for much lower costs than US manufacturers. Hence why so many US companies produce their goods overseas, only to sell them in American markets.

The result of this regulatory imbalance is apparent. American manufacturing is dead. Huge portions of the products we consume are made outside the US. We suffer an enormous trade deficit, which in any other country would destroy currency value, though for us the affects are blunted by the US dollar's global reserve currency status.

Our labor and environment policies have applied costs to American industry that industry in other countries can avoid, setting our industry up for failure. We simply cannot compete in these markets without efficient, large scale automation, but even if we do succeed with automation, we have still shed jobs from our economy.

Free traders might reply that this means Americans must advance, and work in higher skill businesses that China and others aren't able to do yet. They are right, but leave out the fact that retraining and building new high tech businesses takes a lot of work, time, and money, adding more costs to our already (relatively) expensive labor/business environment.

We have to change our trade policies. Low or no tariffs simply don't work when trading with nations who are not on the same playing field. And I don't want to eliminate environmental or labor standards. So we have to apply costs to imports through tariffs. We have to apply them broadly, but also slowly. We don't want to shock the global market with sudden new costs. We also must be cautious of making tariffs to high, thus stifling trade too much.

Our economy is dying. We have to do something. Some will call this policy "protectionist." I call it common sense.

The Great Shift

I've been trolling the nets for a good story to post, but I don't think a single news story could do justice to the overall picture I'm seeing. Wheat fires in Russia. Gulf oil spill capped. Google making deals with Verizon. Economy in the sewer tank. Corporate profits up. Regular jobs down. Gay marriage legal. Police focused on victimless crimes. White collar criminals running free. Democrats avoiding their taxes. Republicans offering nothing. Tea Party gaining support.

It's so much, and it keeps coming faster. The world is shifting beneath our feet, and it's all some of us can do just to keep up. Average Americans are bearing the costs of mistakes made at the highest levels. Technology is inventing magical devices. The future is upon us. And we are just trying to figure it out.

Like an infant opening its eyes for the first time, the human race is blinking in the bright light of information brought to us by the internet. What does this all mean? How can we make sense of all this information? How can we make use? How can we make money?

Our world, our culture, our selves, are changing faster than ever in history. Changes that used to take generations are now happening in just a few years, and I only see it getting faster. The interconnected minds of the internet are showering us with information as we struggle to keep our heads above the waterline. The waterslide of information seems to have no end, but damn is it a fun ride.

Separated families are sharing pictures on Facebook. International debates between regular people are happening on internet forums. Videos of important events fly across the globe before we even know what it means. (What does it MEAN?)

Corrupt businesses and government officials are being exposed at a fierce pace. Every other day another bank committed fraud, another congressman evaded his taxes, another ex-vice-president caught with his pecker out. The leviathan of government and business is being exposed for the sociopathic money machine that it is. And we, the people, watch with interest.

The wars we don't want to talk about brought into focus by criminals stealing classified records. The president we hired to end the wars expands them, telling us he will draw down. Next year. Or later.

The health care we were promised, where is it? A 10 minute doctor visit is still a hundred dollars or more for those without insurance--where's the fix for that? Americans now required to pay money to insurance companies--this is reform?

The internet brings the picture into focus, sharpens the contrast, and it is a chaotic picture indeed. Our leaders are corrupt, kowtowing to whoever gives the most to their campaign. Our businesses are using government to extract more profit from the over taxed, over spent, drowning in debt populace. And we are starting to see it, in a way that no one has seen it before.

We've seen it. We've talked about it. We've lived it. Now one question remains:

What are we going to do about it?