homogenik

$33 Billion in Taxpayer Money Subsidized Wall Street Bonuses

You are right for the most part however goldman and jpm didnt need the bailout but were forced into it. I do object to the money from tax payors going to AIG and then goldman then goldman pays huge bonuses. What is upsetting is the bonuses being paid at citi, merrill etc when the firms completley imploded. It is also extremely upsetting that there have been no criminal prosecutions of executives at Lehman, Merrill and Bear Stearns where there may have been alleged cooking of the books. The government needs to determine was there massive accounting fraud at Lehman and these other firms and if so then when will there be indictments of Dick Fuld and its CFO

How Big Is High-Frequency Trading?

With respect to stat arb there are numerous strategies being attempted. Previously pairs trading was hugely profitable however when decimalization came in that helped to vastly reduce profits. Also the universe of actual bona-fide correlated pairs is extremely small (that is with stable correlations). Simultaneously arbs shops were trading the same pairs which has the effect of farmers crowding into the same potato field. I dont know what some of the huge hedge funds are doing but would guess that they are exploiting short term directional trends in tick data and applying probabilities to come up with very short term trading rules. However if a strategy is much more succesful because of the proximity of a hedge funds client server to an exchange then that has to be a dying business as internet bandwidth increases this "arb" which probably is technically computerized front running should dissappear.