every day billions of shares are traded in the stock market all of the activity depends on knowing the prices at the moment you buy or sell so how does the information get out there and has it always been reliable today we're going to take a look into the fine print of stop quoting in the early eighteen hundreds the only way to receive prices was either word of mouth or handwritten messages since the useful life span of one stock quote was brief quotes didn't travel far outside of new york city now after the civil ticker revolutionized wall street and tracking

became excessive all to a wider geographic audience this allowed people across the us to access near real time stock prices and the trade on exchanges by the late one thousand nine hundred concerts over control on vital market data amounted western union it dominated the the market for a quotation and financial news services and some were concerned that western union would use their access to the data to help insiders manipulate the market and a report to the house judiciary committee and eight hundred seventy five representative benjamin butler advocated the nationalization of telegraph services warning that there is no industry no interchange of commodity and no value that is not at its mercy however in eight hundred ninety s. we saw the end of western union's dominance in the quote market the new york stock exchange commonly referred to as and i see secured control of the commercial telegram company. named it the new york quotation company it became the exclusive

ticker service on wall street reporting stock prices became increasingly difficult over the next century often the same company stock appeared on different exchanges and at different prices now congress recognized the need for an accurate centralized quote system so in one nine hundred seventy five the securities and exchange commission was asked to help set up and oversee and nationalize the market system with centralized quotes as part of the national market system the national best bid or offer also known as it was created the rules require brokers to guarantee customers the best available price when they buy or sell securities for example if you place an order for stock and the national stock network but the best price for that stock was on the boston stock exchange that the national stock network would route your order to the boston stock exchange so having this information up to date and in real time is very important while it becomes a challenge when the market is extremely volatile there's times when quotes can't

keep up with change it changes and price it in the minutes following the two thousand and ten flash crash and be video feed it would at times lag real changes by as much as twenty four seconds which is a lot of time considering stocks can be traded in thousands and even millions of a second the m.b. video was calculated by the consolidated tape association this is the central agency that collects all the trades as quotes from the exchanges and reports which are the numbers you see when you're looking at the the ticker on time square now the industry automation corporation. is the operator of the consolidated tape and in two thousand and six nice he took over a sigh ak and i'm in a merger with euro next meaning that nice see your own x. i was the sole owner of the firms that provided security codes so once again macy's new york stock exchange company has regained exclusive ownership of the rights of

the wall street ticker which brings us to a full circle or things began over a century ago and that's what's in the fine print of stop quoting. senator ted kaufman spent part of his time in congress warning about high frequency trading. high frequency trading firms are currently locked locked in a technological orange raise them a result in some big disasters. and suddenly he made this warning just a few months before the crash in two thousand and ten producer bob english and i have a chance earlier today to speak with eric's got his seder is the founder of man x.

i first asked him if he agreed with senator kaufman characterization of the competition between exchanges and h f t firms as an arms race meaning that the two are continually having to of the ante in terms of bandwidth and speed and here is his response. there's not really. exchanges. trading there kind of. relationship. the arms race to going. is trying to it's almost a gentleman's agreement. to. it was speed limit and not spend to death we kind of see this because every time the ny c. does a capacity upgrade h f t firms kind of spike the capacity and they just kind of push up against the glass ceiling but do they sometimes break it does that ever happen now well when they hit the top key what happens is everything gets to lead.

whatever symbols are processed on that same on the same computer so the computers will process certain stops and you know when you're out of the first letter of the stock symbol it's one of those symbols so they all the whole group and is this something that happened was this a precursor to the flash crash itself and has this happened recently. well that what that is what was unique about the flash crash you need to look at all the other points of information and what really stood out as in need of the day was the presence rays hit the peak and stayed at the peak the last time we had a similar century of information wasn't sometimes we were nineteen thousand in a cheery voice and now from that day the dow jones dropped five hundred points about ten minutes in the current. so it was important for information not to

get to ladies this is seen as there's all these machines are basing their intelligence of what to do on prices and prices. curves in garbage out maybe. there's something wrong with that they immediately pull out immediately the one thing the plans have been i would pull out right that's settled as soon as we had it was the way it is on the say it's lost a whole group of liquid and we saw that kind of recently too when the twitter a.p. feed fiasco happened a couple weeks ago all this liquidity that was supposed to be there just vanished in an instant. yes that it's truly finding i have never in since i've been doing this and i started back in eighty six i've never seen could it be this peter that fast and that great of magnitude it was something to behold but we thought that one of the results of that quote stopping can you explain what the broader facts are on the market and on individual stocks are of course stepping. right so we have the

opportunity to look at major firms trade actual trade data already data or we see how sadly a long it takes to work in order and there are different stages of the order and what we found is when there are message rates are high the smart order out of the credit a lot of crime on wall street will get behind hundreds of milliseconds it's pretty surprising when. doesn't take really that high of quote really. cause it's more. time in are these are these smart border riders that you're talking about are these just are they trying to break up large trades for large institutional traders or the hippie firms themselves can you can you comment on exactly what their strategy was right the ones that we're looking at today are they as institutional who are trying to. in. fact before going to mess with you will you know whether it's a loose change is all the liquid so you can buy or sell the house and shares

readily with the market knew it was there now if it doesn't exchanges you won't have a thousand shares a nice sharing and you have one hundred shares that is since so they were forced really high to see trades for explicitly and just need to go to enormous lengths to get the same features that we had in the past so they have to bring order into the wilds of a one hundred share lots and they have to actually time it so intense all of these exchanges and the precise exact time if it's the you know. one of the exchanges will will spill what they're doing onto the now or end up with intent there and pull their orders at the other exchanges well just to play devil's advocate here for a minute the average person is not a day trader and is more likely to buy and hold over our minds or near it and they're probably not concerned about pennies being shaved off their entry and exit so if they're really a problem for the average stockholder. it well it is the

date it comes when they have to sell and you have a much greater chance of being struck by lightning in a victim on that day when it comes to sell also we live in a society based on law that says if you're ok with some people not following the rules because it doesn't hurt like for example if you could get how does that affect me or has that effect. first. of next we'll continue to talk when manic founder eric. you want to hear what he has to say about the market micro structure toxic order flow and a rather cool reception by the f.c.c. men prime interest producer bob inglis and i will take a trip through the robot going door to find out just who is on the end now and we have a special announcement to make. you

know sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear or see some other part of it and realize that everything you thought you knew you don't know i'm tom harpur welcome to the big picture. they're ready to come here to work and not get paid for it. people from all over the world it. is a take to become

a volunteer at russia's premier museum why do the son of the movie's director come here. i'm one of the cats do. behind the scenes at the hermitage see. lol. now we have more where the air comes later of negs we talk to him about the role of

options and high frequency trading. you mention apple there are five thousand different options on apple now how does h f t now play into the options market. well they're just decimating. the average person to analyze prices for moving the decision you know a lot of times people say well your burdens direct fees and you get the benefit of that that's not foreign you know on people base their decision or selling more than what. some people actually want any analyze prices and do economic forecasts that has become really expensive because all is well there's no way it's in crisis they have to you have sealed you have to work with this really outside the scope of many academic it's right it's almost like electronic tradeable are not tradeable spam it moving on by law and exchange is supposed to execute

a trade at the best available price among all the exchanges and it's called the national best bit offer or and b b o and this is calculated centrally by the consolidated tape association and i want this to be clear because this is something that i think that's very important that you're bringing up recently and you've discovered that the exchanges are not necessarily using this centrally disseminated source of quotes and information instead they're computing it on their own based on their proprietary data feeds with each of the other exchanges why does this matter . not one there is no consolidated you got a truck is no way to verify or prove worth the exchanges prices were at the time thanks huge earlier it was a lot of leeway and. time and no one really be able to figure out. whether or not that was the case and consolidated feed was

specifically part of reading and math so sure. there was a reliable party source and also into service and other troops know exactly where the prices were even if you went on and we don't have a consolidated on our trip we don't have you have to go until you look at the data . nobody. you know and team sources and all the king's men have. all the same now as you know in google so you know as you get everything out it's impossible. it's just no there's no way to reconstruct it well moving on the f.c.c. it spent millions on ads might assist them just to be able to monitor the activities markets and real time now why didn't i think come to new and to subscribe to your services for just you know i feel thousand dollars. needed to have a budget. that's a very good question not. the one the one thing that bothers me the most how that went was. that not just in our wasting billions when it could have

constant thousands but not even not even looking at someone to say they didn't want to know they didn't want to hear from once in this impossible to build a consolidated audit trail system with the way. at the end video is not used from the said you know want to know that information fair you may have seen this animation around the internet i mean i built that specifically to show the f.c.c. however it's for weaver not because they seem to not quite grasp the importance of consolidated quote and the importance of latency in the system importance of he's been consolidated for audit trail purposes so you did talk with the f.c.c. and i'm just wondering if you had to have the opportunity to also talk to maybe the siop to see and did you find them receptive to what you had to say or were they just forced to listen to you because you were the only guys out there providing

this kind of data. the c.r.t.c. was receptive with andre when joe invited us out in july of two thousand and ten after we published what we found on the flash pressured or he was very receptive and he connected us with many others and to see if the city even sent a per ounce to our office and within a day we had him up and running be able to start actually working with flash crash data we sent out of the plant. and that was kind of the end of it and the f.c.c. it seems like you've always been forced to listen. well there is also prevalent and the future is and so in that regard the commissioner of the c f t c has said he wants to put a good housekeeping sam of approval on every hour go and this is maybe a little i think of all your what are your thoughts on how to reign and some of the damage that you see these algos posing to far less of. i don't

understand why this loan to find these things is there so obvious to us we've been interested for a long time and there are obvious to others for us who is who who work in supermarket data there's no excuse for the blatant it's good and even more blatant going up. all the water but when. jones sort of puts out a paper that shows that the top te's tain't likely to be fifty nine percent of the time you believe they're successful you see exploratory trading which is we need to be a loser strategy when their paper comes out of the c o t c s academic program using c.d.c. data and your response it's to curtail or severely incur academics axis of this data you're not fooling anybody. there was a failure of the founder of manic.

that's our favorite time of the day daily dool yes it is what's on the agenda today well we're going to take a guess what bill de warren buffett michael bloomberg over when free and jeb bush all have in common i give up well we're not really sure about last weekend bill gates and rented out the entire thing so werry hotel for them to meet now there has been no information or reports on what they were actually talking about it we know they were on the story literally one place and one place only no worlds right you know when there's no no information about what's going on ok so what's your guess

what are you speculating ok i'm thinking we have bill gates here massive failure with windows eight warren buffett is there maybe warren buffett is there to help bill gates i don't know bill gates is worried about the stock price of microsoft but if it's going to sell him some long dated puts like he did a few years ago he called them you know weapons of mass destruction or destruction at one point and these are derivatives but he's back in the game and then i guess we have bloomberg very he's a little scared he's been spying on been burned or at least has employees of in the chief money printer is not somebody to be messed with so i guess she's just there for moral support she's very good at that. she believes well the out of all of them she has a little bit to go she's i mean more wealthy than. well my guess is public education because this is bill and melinda gates foundation when their main causes and bill gates released his new plan and it was a report in the washington post last week is to put a video cameras in every single classroom and. america as part of the teacher

evaluation system it would only cost five million dollars but he argues that cheaper than paying teachers salaries anyway and if you remember the movie waiting for superman which emphasized the failures in the education system the gates foundation actually gave two million dollars to promote this film and it did your homework. and then gave appeared on oprah the week it launched to promote the movie himself and then former florida governor jeb bush of the twenty sixteen a presidential contender he's been promoting education reform through his foundation for excellence in education and tapping in michael bloomberg we all know that he wants to control every aspect of our lives and he's already have the entire city of new york. under video surveillance and locked up almost and warren buffett he's one of the biggest supporters of the gates foundation so he's very bad bill gates every move of this teacher surveillance systems that's my best guess quoit that to talk to me. those are the. right looping on that we're going to

take a trip through the revolving door. i. first he was bounced around between political appointments academia and even you too big to fail thank you for this exactly who gets the honor of being our first revolving door profile after serving in the clinton administration lui landed at new york university for a five year tenure he was gifted a one point three million dollar mortgage for a slinky brooklyn pad the mortgage was forgiven and interest reimbursed nice deal jack but his next assignment at citi it would trump that after presiding over the bank's giant this giant descended into insolvency from two thousand and six i think

thousand and eight he received a bonus of nine hundred and forty thousand dollars the very next year this was after city had already received billions in taxpayer and fed life support but that bonus was contended upon finding another job a full time high profile position with the united states government or a regulatory body seems he was destined for the revolving door trip because that's where he swung at through soon after serving as obama's budget director and chief of staff before becoming our current treasury secretary and at least he knows how to use turbo tax. next up they called her bloody mary that was the name given by the futures industry in the mid one nine hundred ninety s. after she went from a c c chairwoman to see up to see chairwoman then she thought emerged the two and of course we're talking about mary shapiro she would shortly join the ne is steven rise through the ranks in part during the bernie made us tenure there to become its chairwoman and c.e.o. and apparently fond of industry mergers she presided over the hook up between the

and the new york stock exchange to become what is known as finra then back to the top spot at the city where she reversed her stance against deregulation but to late on implementing jobs act in money market reforms well she recently cashed good heading to the top shadow regulator prime and tory financial group and what timing because they would soon be in the public's. independent foreclosure review. very cool and we have one a quick important announcement to make you make it all right we will be at the big quins conference this weekend and we will be talking with some of the top people in the big coin and we will be reporting on it next well you boarding in san jose california i think i do.

it was quite the revealing day on prime interest we said white on bloomberg gate and found a bunch of messages leaking from one of his terminals at least we know going there knows how to use one or has at least logged on once or twice seen some of our top regulators weren't too keen on chatting with those meddling kids to solve the flash crash mystery but we work but we slowed down a bit to talk to high frequency trader eric hunter a man and then bob and i drove to the ultra secret billionaire meeting and focused our powers of hypothesis we looked on the switch so we wouldn't trip over jacquelyn mary shapiro as we entered the revolving door zone and finally what can we say you might be invisible but you're crypto keepers aren't we'll see you soon thanks for watching prime interest come back tomorrow and make sure you follow us on facebook at facebook dot com slash prime interest from everyone at prime interest i'm harry

and have a great. british . markets. find out what's really happening to the global economy.

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real damage and complexity of this oil spill was not something you can grasp just by looking at dirty birds we have between four to five million people in this directly affected area of the coast and it's pretty clear why it's not being reported because b.p. can't afford to have a reported all along the gulf coast are clean they are safe and they're open for business if b.p. is the single largest oil contributor to the pentagon the us war machine is heavily reliant upon b.p. and their oil this is a huge step backwards for the marker sea it's a step forward for oligarchy carex it is toxic is a look a lot like spraying in vietnam it was it was not a picture that either the government or b.p.

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