Ralph Ferrara, partner at Proskauer Rose LLP, talks with Bloomberg Law’s Lee Pacchia about the problems presented by high frequency trading and potential solutions. Ferrara says that certain policy changes made by Congress in the mid-1970′s had the effect of decentralizing financial markets and diminishing the presence of human controls over trading activity. In his opinion, the resultant market fragmentation combined with high frequency trading has led to a broken, two-tiered system that could force retail investors out of the market and fundamentally change the notion of capitalism in the United States. Ferrara served as General Counsel to the Securities & Exchange Commission from 1978 to 1981.
Guest post by Peter Tchir.
Sunday, Sunday, Sunday, Monster Truck Madness….or EU Summit
It is bad enough when you get a song stuck in your head, but today, I have those Monster Truck commercials stuck in my head. The deep voice, pitching the excitement that Sunday, Sunday, Sunday, Monster Truck Madness was coming to your town. Maybe the EU should hire that person because that is about the only way to generate any enthusiasm for this summit.
A plan to create a plan will be done by the end of this year so that it can be implemented in 2013. The reality is the banks have been supervised, just poorly, so this won’t fix much. The plan won’t be implemented in 2013. If you think it is hard for the EU to give money to countries, wait until they squabble over the banks. This will not change anything in the near term and isn’t going to create a system where there is no risk at the banks. In fact, any bank that gets in trouble is now going to be subject to the whims of some bailout crew and creditors won’t be able to rely on the law. Why the market gets excited, I just don’t know.
In this episode, Max Keiser and Stacy Herbert discuss the Bobo and Gono global central banking clown show featuring Ben Bernanke and Gideon Gono and their crowd pleasing echo bubble gags and hyperinflationary squirting money printing flowers. In the second half of the show, Max Keiser talks to Jim Rickards, author of CURRENCY WARS, about Ben Bernanke’s speech in Japan where America’s chief currency warrior warned emerging economies to appreciate their currencies or suffer inflation. Rickards also notes it could be the first time the head of the Federal Reserve has ever talked about the US dollar, normally the domain of the US Treasury.
With Google stealing a lot of attention, let’s not forget about the European mess. Latest out of the German think tank, via Spiegel.
A Greek euro exit on its own would have a relatively minor impact on the world economy, but if it causes a chain reaction leading to the departure of other southern European nations from the single currency, the economic impact on the world would be devastating, a German study warned on Wednesday.