Author: Edouard Chazal

To Regulate Rapid Traders, S.E.C. Turns to One of Them

With the Tradeworx program, the agency will gain access to every bid to buy stocks and every offer to sell shares on each of the nation’s 13 public exchanges. The system, akin to an X-ray machine for the stock market, could enable regulators to detect whether trading firms are overwhelming the market’s plumbing when they rapidly submit and cancel orders.

→ New York Times

What if the Global Financial Crisis is Permanent

In a week where prominent fund manager Bill Gross likened America’s credit-based economic model to a crystal meth addiction (like any ‘hopium’ or narcotic, debt borrows the benefits of tomorrow for the enjoyment of today) and when central banks, from Australia to Russia, are joining peers in Europe, Britain, the US and Japan in pushing down rates or pump-priming markets with liquidity, one can see another of Mill’s classic warnings – the tyranny of the majority – coming true, with quick fixes and short-term solutions the order of the day.

→ Naked Capitalism

Subprime Gains 30% as Goldman, Cerberus Target Market

Growing interest in a diminishing asset has bolstered a rally that’s pushed returns on subprime-backed securities to almost 30 percent this year. Cerberus Capital Management LP and Goldman Sachs Group Inc. (GS) are among firms that have raised money for new funds targeting the bonds, as investors speculate on the real-estate recovery or seek to earn higher returns as the Fed pushes yields on safer debt to record lows.

→ Bloomberg