Archive for the MSNBC Category

MSNBC’s Ratigan: Stock market an ‘obviously corrupt’ fraud [The Raw Story]

Posted in Fraud, MSNBC, Wall Street on July 6, 2010 by Zuo Shou / 左手

It’s been obvious for some time that the media’s daily rationale as to why the stock market did what it did is 99% sophistry or rationalization.  The U.S. stock market itself is indeed  “obviously corrupt.”  I’m glad somebody went ahead and said it.  –  左手

by Daniel Tencer

June 30, 2010

On his afternoon show Tuesday, MSNBC host Dylan Ratigan explained why he believes the usual explanations given in the media for why the stock market went up or down on a given day are nonsense.

“Seventy percent of the volume [of trades on the stock market] is computers that are run by the banks playing ping pong with stocks for 10 seconds at at time,” Ratigan said.

“The stock market at this point, which used to be a reflection of the future value of actual businesses in this country, has been turned by our government and our banks into little more than a paper shredding facility [about which] we can make up reasons why it goes up and down,” Ratigan said.  “But when the computers … at the banks are controlling the action, most everything else is kind of silly.”

Ratigan concluded that it’s time to create an “alternative investment structure” that would allow people to invest their money without putting it “into the obviously corrupt stock market in this country.”

Ratigan was referring to the relatively new phenomenon known as high-frequency trading: High-speed computer programs that are able to “peek” at stock trades less than a second before the trades are made.  If the computer sees that a trade about to be made will raise the price of a particular stock, it can purchase the stock in the split-second before that trade is made.

Many market observers say this “games” the entire stock market in favor of the large banks that practice high-frequency trading.  Indeed, there is evidence that HFT has made the large investment banks much more profitable.  As Ratigan mentioned, HFT is estimated to account for 70 percent of all the trading on the New York Stock Exchange…

…On May 6, 2010, when the Dow Jones unexpectedly plunged nearly 1,000 points, some observers blamed the sudden collapse — which saw some companies’ shares plummet to nearly zero within seconds — on high-frequency trading…

Full article here