The Bernanke Put
From Charles Hugh Smith at Zero Hedge:
In essence, HFT is a gigantic skimming operation that exploits tiny differences in the bid/ask prices of stocks to buy and sell millions of shares for slivers of profit that are multiplied by millions of shares traded in seconds…
As regular folks continue to pull their money out of the market, either tiring of losses and volatility or recognizing it is rigged to their disadvantage, trading volumes have declined, making official but “secret” intervention both cheaper and easier.
Just as the U.S. stock market now depends on high-frequency trading, it also depends on official intervention to stop any decline…
This vast skimming operation is enabled, enforced and supported by the Central State and the (privately owned and operated) Central Bank of the U.S., the Federal Reserve…
Official but secret intervention is called the “Bernanke put,” meaning that the Fed will intervene to keep the market aloft, regardless of what is happening in the real world of the global economy…
Since HFT and quant trading robots are programmed to buy and sell at commonly-known technical signals, if certain levels are broken to the downside, the selling will quickly avalanche as trading machines issue sells.
