"They have arrested a kid who is spoofing the market with a few thousand e-mini contracts and hence taken money from the front-running computers whose real goal is to rip you (real investors) off. They have made the world safe for the conventional high-frequency traders at a real cost to the investing public."
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Yesterday IKN asked, "Why are authorities so keen on charging this Flash Crash guy?" because the rap sheet looked dumb as a bag of nails from the very start. Fortunately there are smarter people in this wonderful blogo-world than your two-dimensionally-brained humble scribe, people who have the insight to get to the bottom of the story quickly.
Step forward John Hempton of Bronte Capital with this post today. Read it all, but here's a slice:
Whole thing here, well worth your time.