WakingTheBull

Originally Posted by WakingTheBull

84% of All Stock Trades Are By High-Frequency Computers … Only 16% Are Done By Human Traders

Source: http://www.washingtonsblog.com
Posted on April 26, 2012 by WashingtonsBlog

Given The Dominance of The Machines, Do Flesh-and-Blood Traders Have a Chance?

As of 2010, 50-70% of all stock trades were done by high frequency trading computer algorithms.

And many other asset classes are dominated by high frequency trading as well.

High-frequency trading distorts the markets. And see this, this and this. And it lets the big banks peek at what the real traders are buying and selling, and then trade on the insider information. See this, this, this, and this.

Morgan Stanley has just shown (via the Financial Times) that the percentage of high frequency trading in the stock market has skyrocketed to 84%:

Trading by “real” investors is taking up the smallest share of US stock market volumes [since Morgan

...

Originally Posted by WakingTheBull

Source:
Henry Blodget
Business Insider
November 8, 2011

Nouriel Roubini was in fine form yesterday, scaring the bejeezus out of his followers on Twitter by saying that several huge financial institutions could collapse in the blink of an eye like MF Global.

These houses of cards, Roubini tweeted, include:

Goldman Sachs
Morgan Stanley
Jefferies
Barclays

The problem, as Roubini has consistently warned, is the banks’ dependence on short-term financing to maintain their long-term asset leverage and run their businesses.

What killed MF Global, Lehman Brothers, Bear Stearns, AIG, and other huge financial firms, after all, was the sudden refusal of short-term lenders to continue lending money to the firms.

Every day, the big Wall Street firms borrow tens of billions of dollars in low-cost short-term loans. They then use this money to make long-term bets on assets that

...

Originally Posted by WakingTheBull

Source: ABC
By SUSANNA KIM
Oct. 18, 2011
Just after the Occupy Wall Street protests celebrated its one-month anniversary, third quarter earnings season continued with Goldman Sachs, which reported its second quarterly loss in its history as a public company.

It is unclear how the Volcker rule, which proposes to ban banks with insured deposits from "high-risk," short-term trading with its own funds, will affect banks' financial results. David Hilder, analyst with Susquehanna International Group, said Goldman Sachs and Morgan Stanley may exit the banking business if compliance regulations of the Volcker rule are implemented. The rule is expected to be implemented next year.

Hilder said those two banks are less dependent on deposits as a source of funding than other banks.

"Once the Volcker Rule implementation regulations are final, we would expect both [Goldman Sachs and Morgan Stanley] to examine the feasibility, as well as benefits

...