Knight Securities loss of $440 million this week was attributed to a "glitch" in a new trading software release. Rumor has it that a disgruntled computer took over, hid or disabled the abort button, and sent out massive market orders causing the firm to lose $10 million per minute for almost 44 minutes, putting Knight into almost instant insolvency. The term "glitch" according to Webster's dictionary, is deemed to be "a minor or temporary setback", not a potential death blow. This categorization of Wall Street incompetence is reminiscent of the recent JPM trading loss of what is now over 7 billion as it was initially referred to as "Tempest in a Teapot" by Jamie Dimon, one of the worlds most highly regarded CEO's. Continue reading "2012, A Trading Odyssey"
As a result of the fallout of the Barclay's Libor scandal and resignation of its Chairman and CEO, it was further revealed that the Federal Reserve was aware of this fraud and manipulation for years. What's a trader or investor to do with such information and any other information reported by governments, central banks, and corporations? The message is loud and clear: if we don't think you can handle the truth, we are not giving it to you. The obvious next question is- What other reports might the powers that be, cooking? And this beat goes on, and on, and on... Continue reading "You Can't Handle the Truth"