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Monday, March 31, 2014

Revolution Watch---Front Running and Algobots

I have always watched the stock market, partially as entertainment and partially because I wanted to be a player, you know, an investor. I have poured in my thousands, or is it hundreds, into various investments like wind power only to find them take a dive because they are not really economically viable---yet.


In reality, the more interesting part of the stock market is the system of economics, both locally, nationally and globally that drive the system. In the past few years, particularly after '08, it is obvious the amount of shenanigans that is going on in all places is profound. Now, we like to think that this is free market capitalism and Adam Smith's free hand of the market is keeping everything in order.

But in the last 6 years it has become glaringly obvious that the system is corrupt and being manipulated by a cast of characters not part of any free market system. This would include the Federal Reserve (which is really a private bankers organization), the US government, big banks and all their creative "instruments" such as Collateralized Debt Obligations, Credit Default Swaps and assorted Derivatives. We must also include Quantitative Easing, a euphemism for printing money. Keep in mind every country has it's own version of this and that would include places like China that is a state, a totalitarian communist state, operating in the capitalistic world.

What it comes down to is it is really a big mess with manipulators all over the place trying to manipulate currency values, control national debts and make millions for the 1%, mostly while the average dude gets bent over to take the big one. It has been quite a show, equal to any dramatic soap opera that features various screwings of all sorts. From my point of view, very exciting in a macabre sort of way because it is becoming daily more obvious the entire fiasco is not sustainable in any way.

It simply is a big pile of shit with the wealthy of the world raking in the dough and those on margins, on the edge of utter starvation and collapse. Nothing fair about it. Just is what it is. This actually has made Americans rich as a group----so far. I pity the poor over populated countries with no natural wealth to exploit. Nature will know no mercy---isn't even as we speak

Now, I have known about some of the real oddities for some time, as have many others---that is where I got it from. I have really enjoyed this process of "Front Running" the stock market. Front running is using inside information to make bets on the stock market. So if an individual knows something about the potential of a stock to move he can buy it very quickly thus making a nice pile of green backs. It is not as if this individual is doing actual work, he is just scamming the system. To some degree this is illegal but of late, the rules have changed and no one wants to prosecute a banker or investors---they are "market makers". So the fixed casino goes on.

In the last few years a new game has come on the scene where high-speed algorithmic (algobots) computers have learned to front run the stock market thus making tons for the dudes who own the monster computers. It seems the computers can go on the internet and determine what is "trending" then instantaneously make a buy on the market knowing in advance the stock will go up or down. They can play it both ways.

Most interestingly, the computers can also affect what is "trending" thus playing the game in all directions. What is fascinating is  they can do this on very tiny margins so if the computers were to make 10 million in trades in 5 seconds, they can make tens of thousands of dollars. It is legal and hard to detect. It is a rigged game. I just heard that 87% of all trades on the market are done by algobots! What a trip. Me, I make maple syrup.

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