Again from last night's Midas.

Bill,
Probably few investors know of BATS. No, not the flying mammals but the "Better-Alternative-Trading-Systems" trading platform. This largely unknown acronym in just 5 years has become the 3rd largest equity trading platform in the world, behind the NYSE and NASDAQ. BATS measures trade executions by microseconds, because even milliseconds are just too slow. With that kind of dizzying speed for competition it's no wonder the NYSE is building a 250 million dollar computer center out near an old quarry in New Jersey. At 400,000 square feet, it's the size of 10 football fields. Actually few people even know about the NYSE New Jersey data center either. While CNBC shows an antique open outcry floor for visual effect the reality is that 97% of all trading now goes through super computers like BATS and others in New Jersey. The NYSE naturally is leasing computer space in their New Jersey operation to cabal banks. NYSE's computer "real estate" prices are based on proximity to the NYSE's servers and routers. Every 1 foot closer to the NYSE computers gives you a billionth of a second advantage.

Algorithm traders, or "algos" as they're known, are in a high speed, high stakes computer arms race of scorched earth trading. Algos can be programmed to do nearly anything, and increasingly dominate equity and commodity trading. By 2011 it is estimated that 35% of all trades executed will be algorithm driven. Not surprisingly the top 5 providers of algorithm software to hedge funds and asset managers are Goldman Sachs, UBS, Credit Suisse, Bank of America and Investment Technology Group. It's easy to see therefore why gold and silver manipulation is becoming more intense. With the opening of BATS, and later in 2010 the NYSE computer facilities it will be vastly easier to manipulate on a minute-to-minute basis. The cabal no longer needs traders to show up at the Comex open to smash gold. Pre-programmed algorithms can sense buying pressure, and apply the commensurate amount of selling. Algos no doubt are increasingly managing markets for the Working Groups. The well-worn manipulation patterns of the gold charts have all the earmarks of algos. Programming 1% or 2% maximum daily gains in gold, along with algos for equity plunge protection are essential tools.

There's probably one good reason why the CFTC is doing nothing about gold and silver manipulation. They know it's too dangerous to interfere with HFT's and their algo systems. As you know the new financial regulation bill exempts gold and silver from limits on the cabal bank's commodity trading. You can't have the cabal unleash a "quant quake" in retribution. The upside to real gold owners is they can't program a computer to spit out the real stuff. The downside is like today when Bernanke says "stimulate", and the algos are ready and waiting for all Comex gold buyers.

I'm confident this high speed nuclear derivatives game will fail, and in spectacular fashion. Whether the failure happens in a microsecond, or merely a painfully slow millisecond is irrelevant. HFT's and algorithm trading may ultimately hasten the cabal's demise.

BATS trading site: http://batstrading.com/home/

NYSE data center article: http://arstechnica.com/tech-policy/news/2009/08/nyse-builds-com
puter-trading-mothership-worries-abound.ars
James Mc