Monday’s Headlines: Advocates at brokerage Themis Trading work to limit HFT

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Traders at the small Themis brokerage in suburban Chatham, N.J., are making plenty of friends and enemies in their fight against high-frequency trading, according to the New York Times.

According to the Times, On any given day, this lightning-quick, computer-driven form of trading accounts for upward of half of all of the business transacted on the nation’s stock markets … [which these critics say] has contributed to the hair-raising flash crashes and computer hiccups that seem to roil the markets with alarming frequency… Both men say they wish Wall Street could go back to a calmer, simpler time, all the way back to, say, 2004 — before the old exchange system splintered and murky private markets sprang up and computers could send the Dow into 1,000-point spasms.

Their blog on the topic, and related book, Broken Markets: How High Frequency Trading and Predatory Practices on Wall Street are Destroying Investor Confidence and Your Portfolio, are generating both fan mail and creating rifts on wall street. They propose that HTF firms honor the prices they offer for a stock for at least 50 milliseconds.

Top problems with HTF, according to these critics, include:

·         Regulation gives HTF an early peek at buy and sell orders, giving them an edge over everyone else.

·         Firms that dominate the market often stop trading during times of crisis.

·         Everyday investors pay more for their stocks because computerized traders push up prices before orders can be filled.

Other news:
JPMorgan considers slashing 2012 bonuses for Jamie Dimon and other execs. WSJ
Goldman reorganizes its analysts and associates in Europe -- creating two large teams divided by northern and southern Europe.  Financial News
Vineyard National Bancorp among companies experiencing slowed growth. CNN Money
Negotiating jobs for MBAs. BusinessWeek
Startups on San Francisco’s billionaire row.  BusinessWeek
Goldman submits a plan to restructure its $1.9B ownership of Australia’s Nine media group. Financial Times
Video: London – home of banking scandals.  Bloomberg
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