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Image | Joe Saluzzi on High-Frequency Trading: The Equity Market Is Now Controlled by the Machines
Joe Saluzzi on High-Frequency Trading: The Equity Market Is Now Controlled by the Machines
by Chris Martenson

Joe Saluzzi, co-founder of Themis Trading LLC and outspoken exchange expert, is concerned with how high-frequency trading has brought the capital markets into uncharted – and dangerous – territory.

"Things have changed," he cautions. With 50-70% of all trades being conducted by algorithms at micro-second time intervals, real human traders are increasingly challenged to understand how our markets actually work. "No longer do the technical patterns – that have lasted for years and years, and are written about all over – work anymore."

In the following interview, Joe and Chris plunge into "dark pools" and other poorly-understood elements of our now-machine-dominated financial exchanges. The current system is fraught with risks of further "flash crash"-like disruptions, and at a fundmental level, feels a lot like sanctioned theft by the deep-pocketed institutions who can outspend on technology and speed. This is an important interview for anyone involved in trading (professionally or personally), as well as investors who want to know how today's markets truly operate.
Joe Saluzzi on High-Frequency Trading: The Equity Market Is Now Controlled by the Machines
 by Chris Martenson

Joe Saluzzi, co-founder of Themis Trading LLC and outspoken exchange expert, is concerned with how high-frequency trading has brought the capital markets into uncharted – and dangerous – territory.

"Things have changed," he cautions. With 50-70% of all trades being conducted by algorithms at micro-second time intervals, real human traders are increasingly challenged to understand how our markets actually work. "No longer do the technical patterns – that have lasted for years and years, and are written about all over – work anymore."

In the following interview, Joe and Chris plunge into "dark pools" and other poorly-understood elements of our now-machine-dominated financial exchanges. The current system is fraught with risks of further "flash crash"-like disruptions, and at a fundmental level, feels a lot like sanctioned theft by the deep-pocketed institutions who can outspend on technology and speed. This is an important interview for anyone involved in trading (professionally or personally), as well as investors who want to know how today's markets truly operate.
Image | Playing With Fire
Playing With Fire
 PREVIEW
by Chris Martenson

There were rolling blackouts and natural gas delivery failures in the southwest, long bonds broke to new multi-month lows (that is, yields are rising), and Bernanke claimed that the Fed’s policies have nothing to do with global commodity price increases.

Those may sound like entirely unrelated events, but I see them as intimately connected. Here’s how:
Playing With Fire
 PREVIEW by Chris Martenson

There were rolling blackouts and natural gas delivery failures in the southwest, long bonds broke to new multi-month lows (that is, yields are rising), and Bernanke claimed that the Fed’s policies have nothing to do with global commodity price increases.

Those may sound like entirely unrelated events, but I see them as intimately connected. Here’s how:
Image | Bernanke: “Yes, We Have No Inflation”
Bernanke: “Yes, We Have No Inflation”
 PREVIEW
by Chris Martenson

In the recent article on the party in stocks, this was one of my concluding paragraphs:

The bottom line is that by the time the Fed becomes institutionally aware that inflation is raging across the globe – and I often wonder when they’ll finally awake to the threat – it will be too late. Inflation will have the momentum, and it will take a vast overreaction on the part of the Fed to restrain it. They’ll have to drain enormous amounts of liquidity and tolerate vastly higher interest rates to be able to do that, and I doubt they have the courage for such bold action. I think they will hesitate, equivocate, and ultimately be late.

Perhaps sensitive to the growing awareness of inflation across the world and the Fed’s role in fostering it, Bernanke took the opportunity today, while at the National Press Club, to minimize any such concerns. This is really quite a disturbing mindset on display:

Bernanke: “Yes, We Have No Inflation”
 PREVIEW by Chris Martenson

In the recent article on the party in stocks, this was one of my concluding paragraphs:

The bottom line is that by the time the Fed becomes institutionally aware that inflation is raging across the globe – and I often wonder when they’ll finally awake to the threat – it will be too late. Inflation will have the momentum, and it will take a vast overreaction on the part of the Fed to restrain it. They’ll have to drain enormous amounts of liquidity and tolerate vastly higher interest rates to be able to do that, and I doubt they have the courage for such bold action. I think they will hesitate, equivocate, and ultimately be late.

Perhaps sensitive to the growing awareness of inflation across the world and the Fed’s role in fostering it, Bernanke took the opportunity today, while at the National Press Club, to minimize any such concerns. This is really quite a disturbing mindset on display:

Image | Information Scouting Report: Vol 1 (2-2-11)
Information Scouting Report: Vol 1 (2-2-11)
 PREVIEW
by Chris Martenson

We received a lot of great feedback from the content survey, and one idea that popped back into our field of view was for me to provide additional commentary on the wide range of articles that I run across when I do my daily scouting.

Here are the most interesting articles I’ve run across the past few days and why they caught my eye:

Information Scouting Report: Vol 1 (2-2-11)
 PREVIEW by Chris Martenson

We received a lot of great feedback from the content survey, and one idea that popped back into our field of view was for me to provide additional commentary on the wide range of articles that I run across when I do my daily scouting.

Here are the most interesting articles I’ve run across the past few days and why they caught my eye:

Image | How long can the party in stocks last?
How long can the party in stocks last?
by Chris Martenson

The headlines are screaming at the top of every financial media outlet tonight:  The Dow Closes Above 12,000 For the First Time in Two Years!

What’s going on here?  Is the recovery well and truly underway?   And, if it is, why is the Fed dropping hints again that “QE3 may get discussed” at future Fed meetings, as Kansas City Fed President Thomas Hoenig said on Feb 1st?

Given the raft of good economic news lately, one might be forgiven for wondering what the Fed has in mind here.  If everything is so economically rosy, why are they already dropping trial balloons about more Quantitative Easing?  What are they seeing that we are not seeing, that justifies more than $100 billion in thin air money each month, and why won’t they just tell us what it is? 

Here’s how PeakProsperity.com member dbworld put it earlier today:

How long can the party in stocks last?
 by Chris Martenson

The headlines are screaming at the top of every financial media outlet tonight:  The Dow Closes Above 12,000 For the First Time in Two Years!

What’s going on here?  Is the recovery well and truly underway?   And, if it is, why is the Fed dropping hints again that “QE3 may get discussed” at future Fed meetings, as Kansas City Fed President Thomas Hoenig said on Feb 1st?

Given the raft of good economic news lately, one might be forgiven for wondering what the Fed has in mind here.  If everything is so economically rosy, why are they already dropping trial balloons about more Quantitative Easing?  What are they seeing that we are not seeing, that justifies more than $100 billion in thin air money each month, and why won’t they just tell us what it is? 

Here’s how PeakProsperity.com member dbworld put it earlier today:

Image | Why are the stock markets up?
Why are the stock markets up?
 PREVIEW
by Chris Martenson

The headlines are screaming at the top of every financial media outlet tonight: The Dow Closes Above 12,000 For The First Time In Two Years!

What’s going on here? Is the recovery well and truly underway? And, if it is, why is the Fed dropping hints again that “QE3 may get discussed” in the future, as Kansas City Fed President Thomas Hoenig said today? 

Given the raft of good economic news lately, one might be forgiven for wondering what the Fed has in mind here. Why are they already dropping trial balloons?  What are they seeing that we are not seeing, and why won’t they just tell us? What, exactly, is it that justifies more than $100 billion in thin air money each month?

Here’s how member dbworld put it earlier today:

Why are the stock markets up?
 PREVIEW by Chris Martenson

The headlines are screaming at the top of every financial media outlet tonight: The Dow Closes Above 12,000 For The First Time In Two Years!

What’s going on here? Is the recovery well and truly underway? And, if it is, why is the Fed dropping hints again that “QE3 may get discussed” in the future, as Kansas City Fed President Thomas Hoenig said today? 

Given the raft of good economic news lately, one might be forgiven for wondering what the Fed has in mind here. Why are they already dropping trial balloons?  What are they seeing that we are not seeing, and why won’t they just tell us? What, exactly, is it that justifies more than $100 billion in thin air money each month?

Here’s how member dbworld put it earlier today:

Image | Problem Solving: Improvise, Adapt, Overcome
Problem Solving: Improvise, Adapt, Overcome
by mooselick7

“Improvise, Adapt, Overcome” is an unofficial slogan among Marines made popular by Clint Eastwood’s movie, Heartbreak Ridge. Whether you plan to bug in or bug out should tough times occur, the ability to improvise, adapt, and overcome problems will be necessary regardless of how well-stocked, tooled, provisioned, or conditioned you are.

Honing this ability will serve you well. These skills can be cultivated easily in any setting and without a lot of money. Moreover, to build your skills quickly, I recommend that you strive to develop them WITHOUT money. Get creative. No one can take a skill away from you. It boils down to changing your perspective, engaging your creative mind, learning to learn, and improving your physical, mental, and spiritual capacity. 

Problem Solving: Improvise, Adapt, Overcome
 by mooselick7

“Improvise, Adapt, Overcome” is an unofficial slogan among Marines made popular by Clint Eastwood’s movie, Heartbreak Ridge. Whether you plan to bug in or bug out should tough times occur, the ability to improvise, adapt, and overcome problems will be necessary regardless of how well-stocked, tooled, provisioned, or conditioned you are.

Honing this ability will serve you well. These skills can be cultivated easily in any setting and without a lot of money. Moreover, to build your skills quickly, I recommend that you strive to develop them WITHOUT money. Get creative. No one can take a skill away from you. It boils down to changing your perspective, engaging your creative mind, learning to learn, and improving your physical, mental, and spiritual capacity. 

Image | Straight Talk with Catherine Austin Fitts: We Are Victims of A Financial Coup D’Etat
Straight Talk with Catherine Austin Fitts: We Are Victims of A Financial Coup D’Etat
by Chris Martenson

"Straight Talk" features thinking from notable minds that the PeakProsperity.com audience has indicated it wants to learn more about. Readers submit the questions they want addressed and our guests take their best crack at answering. The comments and opinions expressed by our guests are their own.

This week's Straight Talk contributor is Catherine Austin Fitts: investment advisor and entrepreneur. She is the founder of Solari Investment Advisory Services, where she offers subscribers guidance for navigating the risks of the global financial system and the political economy. (FYI: Chris will be the guest on her weekly podcast, The Solari Report, on Feb 3). Her perspective on Wall Street and Capitol Hill are shaped by her past roles as Assistant Secretary of Housing under George H. W. Bush, and before that, as Managing Director and board member for the investment bank Dillon, Read & Co. 

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1. Despite (or perhaps because of) your time as Assistant Secretary of Housing under Bush Sr., you are extremely critical of the government’s financial stewardship. What, if anything, changes with administrations and how much is institutionally baked into the cake?

The federal financial model is institutional, and its ultimate governance is outside of the government.

 

Straight Talk with Catherine Austin Fitts: We Are Victims of A Financial Coup D’Etat
 by Chris Martenson

"Straight Talk" features thinking from notable minds that the PeakProsperity.com audience has indicated it wants to learn more about. Readers submit the questions they want addressed and our guests take their best crack at answering. The comments and opinions expressed by our guests are their own.

This week's Straight Talk contributor is Catherine Austin Fitts: investment advisor and entrepreneur. She is the founder of Solari Investment Advisory Services, where she offers subscribers guidance for navigating the risks of the global financial system and the political economy. (FYI: Chris will be the guest on her weekly podcast, The Solari Report, on Feb 3). Her perspective on Wall Street and Capitol Hill are shaped by her past roles as Assistant Secretary of Housing under George H. W. Bush, and before that, as Managing Director and board member for the investment bank Dillon, Read & Co. 

p.p1 {margin: 0.0px 0.0px 6.0px 0.0px; font: 13.0px Verdana}

1. Despite (or perhaps because of) your time as Assistant Secretary of Housing under Bush Sr., you are extremely critical of the government’s financial stewardship. What, if anything, changes with administrations and how much is institutionally baked into the cake?

The federal financial model is institutional, and its ultimate governance is outside of the government.

 

Image | “Let Them Eat Cake”
“Let Them Eat Cake”
 PREVIEW
by Chris Martenson

There are great moments in history, critical turning points that seemingly hang upon a single phrase. In response to news that the peasants had no bread, Marie Antoinette allegedly said “Qu’ils mangent de la brioche.” (A brioche is a luxury bread enriched with eggs and butter).

At the time of the French Revolution in the late 1700’s, the staple food of the peasants was bread, which absorbed 50% of their income, in contrast to fuel, which consumed only 5%. The obliviousness and selfishness of the ruling class sparked the violence that led to its downfall.

Fast forward to today, where food and fuel consume up to 50% of the income of people in developing nations, such as Tunisia and Egypt, as well as China and India. In an increasing number of these places, violence is breaking out, as the modern-day peasants grow increasingly restive at the burden of merely trying to stay fed.

“Let Them Eat Cake”
 PREVIEW by Chris Martenson

There are great moments in history, critical turning points that seemingly hang upon a single phrase. In response to news that the peasants had no bread, Marie Antoinette allegedly said “Qu’ils mangent de la brioche.” (A brioche is a luxury bread enriched with eggs and butter).

At the time of the French Revolution in the late 1700’s, the staple food of the peasants was bread, which absorbed 50% of their income, in contrast to fuel, which consumed only 5%. The obliviousness and selfishness of the ruling class sparked the violence that led to its downfall.

Fast forward to today, where food and fuel consume up to 50% of the income of people in developing nations, such as Tunisia and Egypt, as well as China and India. In an increasing number of these places, violence is breaking out, as the modern-day peasants grow increasingly restive at the burden of merely trying to stay fed.

Image | Interview with Jim Rogers: Why Inflation is Raging Worldwide and He Shorted US Treasury Bonds*
Interview with Jim Rogers: Why Inflation is Raging Worldwide and He Shorted US Treasury Bonds*
by Chris Martenson

"I see more inflation and more currency turmoil as we go forward. There are huge debt imbalances in the world. U.S. is the largest debtor nation in the world and all the assets are in Asia. The largest creditors in the world are China, Korea, Japan, Taiwan, Hong Kong, Singapore – this is where the assets are and the debts are in the West. Those imbalances have to be resolved. They frequently lead to more currency turmoil. We’ll see more inflation, we’ll see more governments fall. We just saw Tunisia fall – more are coming because the world is going to continue to have these problems, and especially inflation that is going to cause more social unrest."

So said investing legend Jim Rogers when he spoke recently with PeakProsperity.com about the inflationary pressures rising dramatically around the globe, despite some governments' best efforts to downplay them. Jim shares his "outside in" perspective on US monetary and fiscal policy, and how international players find themselves forced to react. He sees a lot of fundamental imbalances that need to be corrected for, as well as shortages of almost everything developing. In his words, "It's going to be a real mess before it's over."

 
Interview with Jim Rogers: Why Inflation is Raging Worldwide and He Shorted US Treasury Bonds*
 by Chris Martenson

"I see more inflation and more currency turmoil as we go forward. There are huge debt imbalances in the world. U.S. is the largest debtor nation in the world and all the assets are in Asia. The largest creditors in the world are China, Korea, Japan, Taiwan, Hong Kong, Singapore – this is where the assets are and the debts are in the West. Those imbalances have to be resolved. They frequently lead to more currency turmoil. We’ll see more inflation, we’ll see more governments fall. We just saw Tunisia fall – more are coming because the world is going to continue to have these problems, and especially inflation that is going to cause more social unrest."

So said investing legend Jim Rogers when he spoke recently with PeakProsperity.com about the inflationary pressures rising dramatically around the globe, despite some governments' best efforts to downplay them. Jim shares his "outside in" perspective on US monetary and fiscal policy, and how international players find themselves forced to react. He sees a lot of fundamental imbalances that need to be corrected for, as well as shortages of almost everything developing. In his words, "It's going to be a real mess before it's over."

 
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