Confessions from about a year ago

ITT: The idea that I'm not completely sane.

Here's my confession and it's about a 365 days in the making. About a year ago, I went to Boston to run a race I knew I couldn't possibly win. Not just any race, rather the famed 117th running of the Boston Marathon on a crisp Patriots' Day. At the time, it would go down as the slowest full I'd ever run. I finished in 3:14:29, wondered around for 30 minutes, found my boys and started the stroll towards a station. I was already off of the Red T and in the car back towards where we were staying in Harvard, MA, before I even got wind of what happened.

In an instant, elation was replaced with agony and delight fell to confusion. The pain remained constant though it too shifted from the physical to the emotional. After that initial shock began to dissipate, I realized how angry I was becoming. I had just been robbed. Robbed of months and months of training runs. Robbed from the sensual taste of beer that I had forgone. Robbed of the much needed sleep I desired.

But, that's probably old hat to most of you. So clearly that can't be my confession. No, the confession is the growing belief that the bombing attacks at the Boston Marathon were a really well orchestrated ruse.

I believe I'm predisposed to conspiracy theories. In the grand scheme of life, I actually believe we all are. We all desire to have control and if that control can't be had then we pray that someone {hopefully, someone that we like or have voted for} actually has it. We want to know that someone is actually pulling the strings on the game of life.

I don't actually have some grand theory about why a country or its operatives would bomb a US city during a sporting event. I don't really even care who did it. I don't actually care to debate anyone on the topic. It's simply my opinion as someone who was there, went through the 26.2 miles and had it stripped away.

But this is similar to trading over the past decade. At some point there was a different ruler to the markets. The game evolved from a pit fight to a digital one. It used to be a fight where the biggest, strongest and loudest won, now those players lay defeated against the fastest digital fighters the world has known. Malcolm Gladwell tossed out his new book recently chronicling the abuses of High Frequency Trading. Yet, in my opinion this book more closely resembles the timing of early '90s TV commercials. Remember the kind where they would be post dated by a few months if not years in terms of the current hot songs, themes or issues of the day? Yea, just in time processing and using current music just wasn't happening yet. In the same vein, HFT actually died two years ago. Don't believe me? Go check out the year over year results for Getco, Knight, Citadel, Infinium, Latour. They're getting smoked. The speed game no longer exists, the order type game is dying and now that the public knows, the big engines that run this game will go find a new way to scrape out a living. 

Remember a few paragraphs ago when I said we all want control. I think there's really something there. Often we're too afraid to seize it because we're afraid of the cost. If there is a real chance that we may get hurt in the process of taking control, many of us shut down. We allow fear and shame to govern our decision making process and then we lock into a hamster wheel that can't be escaped. Brene Brown, who has the TED talk linked below, talks a lot about this process of being vulnerable. It is the foundation for a lot of her work. Interestingly, according to her research many of us operate on an adolescent level when we try to get our own way. We see that something needs to be reigned in before it hurts us, so we catastrophize it and make it a huge deal so that we can control it. 

But what does any of that have to do with a dumb, unfounded conspiracy theory and trading and HFT? I know, it all sounds like a random mix of things that don't really fit together. Truth is, we're all playing the same rigged game. I know that there are market participants that I will never meet, will never positively ID, will never get confirmation about, whom I trade with every day. Some of these guys cheat the system. Their orders go in faster, the get in front of me in the cue, they bail out of the market if I go to slap a big order. They operate in a quasi, state supported {CME} world where I don't matter as long as I pay my fees and get dinged once in a while. But we don't get too angry. Because if we do get pissed and we do ask to take control back, there is the distinct possibility that we will get stung. There could be negative ramifications to my actions. I can't speak out about a state sponsored bombing on US soil because people will shame me, my opinion will become crap, my friends will disown me, and my NSA file will grow three times larger. I can't speak out about a state run oligarchy of market participants because they may destroy my livelihood and my way of trading. 

So... I lob poorly written ideas, conceived on an L, typed on an incognito browser and post it to my blog... which isn't really a secret. 

Oh well, this was just something to type to keep my mind off the markets and my fingers off the mouse. I know it's completely random, probably makes zero sense, and for all I know is full of typos... But if you're down here, you've obviously read more than most. 

Next week, it will be time to fire up the Fed Fund archives and start talking rate hike. I can feel it out there, I can sense the players in the markets, I believe its a lot closer than Yellen and her blokes would ever like you to know. 

Until then, have a great Easter and pound some chocolate. 

~LH