Of course, honest traders change their minds all the time and cancel orders as economic conditions change. That’s not illegal. To demonstrate spoofing, prosecutors or regulators must show the trader entered orders he never intended to execute. That’s a high burden of proof in any market. One helpful fact is if most of a trader’s (canceled) orders were on one side (say to buy) when he was mostly actually trading on the other (selling). For instance Sarao allegedly put in huge orders to sell, so that he could buy a few contracts: All his trading was on one side, but most of his orders were on the other. Then he’d switch a little while later. That seems like a bad sign.
Category: Finance
Beware of the Liquidity Delusion
Martin Wolf on liquidity :
If relaxed regulatory requirements encourage banks to provide liquidity in good times, only to run away when unable to fund themselves, we end up in the worst of all worlds. Overconfidence in fair-weather liquidity should be discouraged. Investors ought to worry, instead, since the risk that nobody will be on the other side of their trades is a real one.
Bros Funding Bros : What’s Wrong with Venture Capital
A VC on VCs :
From the foundations and NGOs that are eradicating poverty and taking care of the world’s worst off, to companies like Facebook, Google and Apple that are inventing the future while looking after our best off, they have all explicitly decided to become less consensus driven and less homogeneous. They have found this increases creativity and drives business results. In turn, they are doing the ambitious, groundbreaking work that we used to do. And even though they have more work to do, when you compare the complexion of these leaders to the leaders within our industry, we look like total laggards.
Trading The Equity Curve
Some trading systems have prolonged periods of winning or losing trades. Long winning streaks may be followed by a prolonged period of drawdown. Wouldn’t it be nice if you could minimize those long drawdown periods? Here is one tip that might help you do just that. Try applying a simple moving average to your trading system’s equity curve and use that as a signal on when to stop and restart trading your system. This technique just might radically change your trading system’s performance.
Ben Bernanke: More Execs Should Have Gone to Jail for Causing Great Recession
Bernanke has been interested in the Great Depression since his grandmother told him stories about it from her front porch in Charlotte, N.C., during quiet summer evenings. Her family had been living in Norwich, Conn., where some children went to school in worn-out shoes or even barefoot because their fathers lost their jobs when the shoe factories closed. That meant their families didn’t have enough money to buy shoes — which presumably would have kept the factories in business and their fathers employed.
I agree for the most part with the following, but how do you distinguish between human actions and a process, the securitization to name it, that once pushed to its limits and at a fragile moment gives birth to monsters all around?
And didn’t Bernanke knew about the unprecedent levels and untested territories of loan originations that were about to be pooled into CDOs ?
I doubt he was unaware.
He would have favored more individual accountability. “While you want to do everything you can to fix corporations that have bad cultures and encourage bad behavior — and the Fed was very much engaged in doing that — obviously illegal acts ultimately are done by individuals, not by legal fictions.”
Abnormal Capitalist 