gpatt0n Posted June 9, 2015 Report Share Posted June 9, 2015 I happened on the story of Navinder Singh Sarao, a mid-30's un-married Sihk man living with his parents in London. Sarao must be the most conservative person in the world. I say that because of his apparent love for making money. First, this guy is cheap ... I don't mean frugal; I mean cheap. I mean he took late lunches so he could bargain a discount on the leftover sandwiches the folks at the lunch counter had left after the rush. Rush hour rates for the tube in London are more expensive than post-rush-hour rates. He opted to arrive at his trading desk late to save the money. He always wore jogging gear to work. He lived with his parents. His mother was forced to work two jobs because he didn't pay rent. One day he bought some new jogging clothes but lost a few thousand on a trade and sent them all back. Sarao was a legendary day-trader in the stock market first at a London firm and then as the sole proprietor of his own firm. He amassed, from literally nothing, a fortune valued at 27 million pounds sterling or almost $40 million. He is also accused of manipulating the market and is being fingered as the guy who caused the flash crash that cost investors over a trillion dollars back in 2010 -- while netting him a 900,000 pound payday. But he didn't spend the money. Today he is cooling his heels in a British prison awaiting extradition to the US. He could be out but apparently he can't get to his money (or won't) as there is a 5 million pound bail set for him. He claims he can't even afford an attorney and has obtained legal aid. He is accused of 'gaming' the trading system in a way that fools the computerized high frequency traders by offering bogus sell and/or buy orders for derivatives like options to buy stocks. The result, of course, is the rise and fall of prices based on the manipulation and because presumably his actions are the source of the manipulation, his real 'advantageous' purchases results in reliable and large profits. He claims he is innocent. Others in the market feel that if a lone trader on a desk in London can so easily manipulate the market - he was trading actively until early April of this year (and had been trading since 2003) and was only recently accused of complicity in the "Flash Crash of 2010." While he is accused by the Chicago Mercantile Exchange for illegal trading activities (obviously from London) many traders suggest that he may not be the sole or even proximate cause of the problems, which of course raises a whole new crop of questions about the market. I find this man's circumstance supremely and sublimely odd, especially when I think of the thousands of folks, who were given margin calls and other devastating financial outcomes as a result of incidents like the flash crash of 2010. This from the wiki: The May 6, 2010 Flash Crash[1] also known as The Crash of 2:45, the 2010 Flash Crash, or simply the Flash Crash, was a United States trillion-dollar[2]stock market crash, in the "course of about 36 minutes starting at 2:32pm ET"[3]:1 in which the "S&P 500, the Nasdaq 100, and the Russell 2000 collapsed and rebounded with extraordinary velocity."[3]Dow Jones Industrial Average "experienced the biggest intraday point decline in its entire history,"[3] plunging 998.5 points (about 9%), most within minutes, only to recover a large part of the loss.[4][5] It was the second largest point swing, at 1,010.14 points.[3][4][6][7] "Stock index futures, options, and exchange-traded funds, as well as individual stocks experienced extraordinary price volatility often accompanied by spikes in trading volume."[3]:3 A CFTC 2014 report described it as one of the most turbulent periods in the history of financial markets.[3]:1 On April 21, 2015, five years after the incident, the U.S. Department of Justice laid "22 criminal counts, including fraud and market manipulation" [8] against Mr. Navinder Singh Sarao, a trader. Among the charges included was the use of spoofing algorithms, in which just prior to the Flash Crash, he placed thousands of E-mini S&P 500 stock index futures contract which he planned on cancelling later.[8] These orders amounting to about "$200 million worth of bets that the market would fall" were "replaced or modified 19,000 times" before they were cancelled.[8] Spoofing, layering and front-running are now banned.[2] The Commodity Futures Trading Commission (CFTC) investigation concluded that Sarao "was at least significantly responsible for the order imbalances" in the derivatives market which affected stock markets and exacerbated the flash crash.[8] Sarao began his alleged market manipulation in 2009 with commercially available trading software whose code he modified "so he could rapidly place and cancel orders automatically."[8]Traders Magazine journalist, John Bates, argued that blaming a 36-year-old small-time trader who worked from his parents’ modest stucco house in suburban west London[8] for sparking a trillion-dollar stock market crash is a little bit like blaming lightning for starting a fire" and that the investigation was lengthened because regulators used "bicycles to try and catch Ferraris." Furthermore, he concluded that by April 2015, traders can still manipulate and impact markets in spite of regulators and banks' new, improved monitoring of automated trade systems.[2] As recently as May 2014 a CFTC report concluded that high-frequency traders "did not cause the Flash Crash, but contributed to it by demanding immediacy ahead of other market participants."[3]:1 pubby Link to post Share on other sites
mei lan Posted June 9, 2015 Report Share Posted June 9, 2015 Oh, Pubby, you ignorant slut. That has nothing to do with conservatism and everything to do with greed and no, they are not the same thing. (YOu know I love you...I just like saying you ignorant slut. ) 1 Link to post Share on other sites
lowrider Posted June 9, 2015 Report Share Posted June 9, 2015 I love it!!! BTW, have you seen the new State Farm ad with the coneheads mimicking the husband at 3:00 in the morning talking to a "him" in "kakai" pants? https://www.youtube.com/watch?v=9H16qjnpxKc Link to post Share on other sites
mei lan Posted June 10, 2015 Report Share Posted June 10, 2015 Saw it the other day and laughed myself silly. Link to post Share on other sites
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