High-Frequency Trading Models Under FCA Scrutiny,

By Lindsay Fortado and Dave Michaels
June 4 (Bloomberg) -- Britain’s market regulator is
scrutinizing high-frequency trading algorithms to ensure firms
can suspend operations at short notice and aren’t abusing the
market, its chief executive officer said.
 
The Financial Conduct Authority is monitoring firms across
the industry to understand “the risks associated with the
development of algorithms for use in high-frequency trading,”
Martin Wheatley said at a conference in New York today….
Mary Jo White, chairman of the U.S. Securities and Exchange
Commission, told lawmakers on April 1 that the agency is
conducting “a number” of enforcement investigations that focus
on high-frequency trading and automated trading strategies. The
regulator has also said it’s conducting a broad review of equity
market structure and may make changes to the way investors trade
stocks.

European Union lawmakers approved legislation in April that
will create some of the toughest rules in the world for high-
frequency traders. The limits include standards meant to keep
the price increment for securities from being too small,
mandatory tests of trading algorithms, and requirements that
market makers provide liquidity for a set number of hours daily….

“Essentially what we have now in the U.K. is a mix of
exchange-led monitoring, with the regulator analyzing risks such
as cross-market techniques on the one hand,” Wheatley said.
“On the other, industry itself reporting suspicious activity,
so the challenge here becomes a shared one.”
 
My Comments: The American and European regulators are putting on a show but not doing much. The important thing to know is that the regulators knew that HFT is unfair trading and violating the rules and regulations of the exchanges, but they still allowed HFT to operate.
This is as good as knowing a crime but closing an eye to let the crime to be committed. They are both condoning a criminal act and should be prosecuted for allowing it to go on.

Kopi Level - Green

CPF Life and Medishield Life – Two life savings schemes

The CPF Life and Medishield Life are two of the greatest insurance schemes thought of by the Govt. The two schemes help to solve two of the most costly and serious living problems of the people, one to have money to live during retirement, and the other to have money to pay for medical bills that could make the HDB millionaires bankrupt even after selling their flats. The people can now live in peace, sleep in peace because of these two great schemes.
 
How much more would it cost if these two schemes were private insurance schemes? The three most important cost of private insurance schemes are commissions for the agents, bonuses for the over riding top management and profits. Oh, there is another cost, operating cost, marketing cost and overheads. With the two compulsory schemes, the cost must be very low as there is no need for much marketing, and lower operating cost as everything can be computerized under one roof. There will be minimal marketing and sales staff that private insurers would need.
 
Without the insurance agents and their overriding managers, this middle man cost would also be removed. And without the profit motive, the premiums could be really low, to cover just the necessary. Tiok boh?
 
How can private insurers compete in operating cost against compulsory insurance schemes offered by the Govt? These savings can easily be worked out and must be quite substantial. I am not an expert in insurance, but people like Tan Kin Lian could easily show us some numbers between private insurers and the CPF Life and the coming Medishield Life for comparisons. Say if the private insurer is charging $1k, by removing the agent commission, overriding commission, marketing, sales, profits, etc, how much should the net number be?
 
A compulsory scheme surely need not have to pay commission and profits and high marketing and sales cost, no middleman cost and NO profits. So, how much are the CPF Life and Medishield Life premiums compare to those of private insurer’s, apple to apple? Or are the premiums the same or the difference marginable?
 
No savings from economy of scale? I will be damn if the premiums work out to be similar. I will fall off my chair if compulsory schemes actually ended up paying more.

Kopi Level -Green

Ai Weiwei - A Chinese Inquisition necessary for China to move forward

Mypaper published the thoughts of Ai Weiwei on 5 Jun rebuking China for not wanting to face its troubled past. With 5000 years of history, there are a lot of ugly past that China would have to confront. Fortunately Ai Weiwei spared the readers the agony by limiting China’s past to the era of Communist China. He went as far back as the Great Leap Forward, the Cultural Revolution and the Tiananmen Square Incident. In his view, unless China accounts for the wrongful past, it cannot move forward and would be bugged by a credibility crisis.
 
‘China has chosen to forget, or to allow forgetting – an attitude the West will find hard to understand. This provides China a way to liberate itself from self criticism, as well as a heavier moral burden.’ From the idealistic point of view, from an intellectual point of view, I fully agree with Ai Weiwei that it is good for a nation and a people to face up to its ugly past, do some critique, appease the conscience and move on to a higher plane.
 
What bothers me is his deference to the West as if the West is superior in not forgetting their ugly past, that the West was an epitome in facing and criticizing their sad past. 
How much did the West live up to this fairy tale expectation of Ai Weiwei? The genocide of Red Indians, the slavery of the Black Africans, the oppression of Asians, particularly the Chinese migrants, how much were these episodes really discussed and reflected by the West to clear their conscience? But these are too historical, too ancient to talk about. Okay, what about the wars of lies in Iraq and the oppression of the Islamic countries, regime change all in the interests of the West under the guise of democracy, freedom and human rights? Were these discussed, or were they not as they were not seen to be wrong or ugly? What about colonialism and the butchering of natives in the name of civilizing them? Were they really discussed in the West?
 
But the West moved forward with no trouble at all, with no sense of guilt, with no heart wrenching spasm, soul searching to want to liberate themselves from their ugly past.
 
Japan too had moved forward with no remorse to the cruelty and barbarism in the Second World War. Or does Ai Weiwei believe that Japan has repented, critiqued its Imperial past? Of all that I know, Japan has white washed its gory history that the young did not know what their cruel forefathers did in Asia. Or Japan is suffering from a crisis of credibility for not confronting their past and not moving forward? The Japanese are trying to rewrite history, no comfort women, no Rape of Nanking, no massacres of natives in China and Southeast Asia, no Unit 731….
 
Ai Weiwei is a modern Chinese intellectual, very well respected. I think he over respected and overrated the West and their white washing of their ugly past. The West did not suffer from amnesia. Any amnesia is selective amnesia, intentional amnesia just like Japan. Or it is because the Asians and Chinese have amnesia about western history of conquest, genocide and oppression?
 
Countries moved forward whether they take the effort to confront their past or not. Did the West confront the Inquisition in Europe, the massacre of pagan natives and non God believers all over their colonies? Many in the West, if not most, have conveniently chosen to forget their ugly and uncomfortable past. Many Asians chose to believe that the West did not have any ugly and uncomfortable past to confront, some out of ignorance, some out of idealistic adoration, and some out of stupidity.

Kopi Level - Green

CPF Protest Rally – 2 days to go

Roy Ngerng has made a difference. With several million CPF members with their money held back by moving goal posts and ingenious new schemes and totally hapless about it, Roy Ngerng has come along to take up their case with the Govt. In the course of doing so, Roy is now facing a defamation charge connected to this cause and may face bankruptcy and an obliteration of his career choices here. And Roy is only 33 years old.
 
Many Singaporeans have come forward to put money into Roy’s hands to defend his lawsuit. Many Singaporeans felt that they owed it to Roy to make a stand, to back him up financially, to protect him from bankruptcy. Many will be at Hong Lim Park this Saturday with their Ovaltine and biscuit tins of money to hand over to Roy. They knew that the damages can be prohibitive and more money is needed to help him ride over this rough chapter of his life.
 
On record, about 1,200 people have contributed to Roy’s legal fund. That is a small drop compared to the millions of CPF members affected by the changing rules of CPF to their dissatisfaction and detriment. Would these Singaporeans step forward to show Roy that they appreciate what he is doing by attending the protest rally this Saturday? Or would they be the pathetic Sinkies, none of my business, let someone else fight for them and pay the heavy price by being on the wrong side of the political equations?
 
Professor Christopher Balding, a foreigner, acknowledged that he was writing from the safety of being afar. Roy is here challenging the Govt and will risk facing whatever the Govt can throw at him. There is no shelter or protection. The only thing that can protect Roy is the people, the people that Roy is trying to speak on their behalf. The saddest thing to happen is for the people to leave Roy in the lurch, it is Roy’s battle with the Govt. Nobody asks him to do so.
 
How many people would be obligated to Roy to want to go to Hong Lim this Saturday? How many would just ignore Roy and go about life as if it does not concern them? Would the people, the CPF members, close rank with Roy? Or would they abandon Roy when he needs their support and confirmation that he is doing the right thing and they appreciate it? It will be a sad day and a big disappointment if the grounds of Hong Lim were half empty this Saturday afternoon.
 
Would the Singaporeans help Roy to make a difference to their CPF savings? I am not sure how many CPF members will be there. But the international media would be there for sure.

Kopi Level - Green

Tiananmen – Digging up the ugly past

The US and of course the UN, demanded that China gives an account of this ugly incident that happened 25 years ago, June 4, 1989. Many students died in a student uprising in Tiananmen Square when the army and tanks moved in to quash the protest for democracy in China. The memories of the dead students are deeply etched in the minds of those affected and involved in the protest. This chapter of China’s history would always be remembered with a heavy heart in the political struggle of a new nation rising on its feet after centuries of decadence.
 
What would happen to China today if the student uprising was successful is a moot point. Would China be more prosperous or thrown back many years in turmoil is any body’s guess. No Chinese would speak kindly of this event, not even those in power in the CCP. It was nothing to be proud of even though it was deemed necessary given the dire situation. Who is good enough to judge this incident?
 
Such incidents of violation of freedom of the people and the mass killing of innocent civilians would and must bring shame to the perpetrators. Tianamen is an old would and some people may ask why should people be harping about the past? Let the past be history and let the wounds heal.
 
No, the Americans, the most righteous nation, the defenders of human rights, freedom and democracy, would never allow such acts against human beings to go unforgotten. It must be brought up for an airing annually no matter how long to embarrass the Chinese leaders and to put pressure on them.
 
What about the atrocious act of fabricating a false charge of WMD against Saddam Hussein’s Iraq that let to the murder of Saddam Hussein and his families, and the killings of hundreds of thousands of innocent Iraqis? Are these violent and wicked acts to be condoned? Should the US and the UN be demanding for a proper account of why the US, the UK and the Coalition of the ‘Willing’ invaded a country, destroyed its infrastructure and economy and killing and wounding hundreds of thousands of innocent people based on a lie? Should those evil leaders, under the pretext of freedom, democracy and human rights, be allowed to go free, no need to answer to their crimes against humanity? And this event happened only 12 years ago, not in the historical past. Why are the Americans and UN completely quiet about such atrocities?
 
There is a more evil event in the not too distant past, during the Second World War. The abominable crimes associated with 731. Unit 731 was a Japanese concentration camp tasked with the job of testing and developing chemical and biological weapons of mass destructions. Thousands of Chinese, Koreans and Russians were used as guinea pigs by the Japanese monsters to test biological and chemical agents. Many were cut up alive, with no anaesthesia, to gauge the tolerance of human suffering from pain. Pregnant women were dissected in the same way to remove the babies and subsequently dumped into the rubbish heap to die. Chemical and biological agents were injected to the human guinea pigs and released to the cities to infect the population as experiments.
 
What did the Americans say about it? What did the UN say about it? The US was in fact the biggest beneficiary of the experiments conducted in Unit 731. They made a deal with the chief scientists and Unit Commander for his freedom from war crimes in exchange for all his knowledge of chemical and biological warfare information. The evil scientists were set free and the US kept all the records of the cruel experiments. Should the UN and US demand the US to account for this drastic deal and for the Japanese to pay for this crime? NO! They happily kept quiet about it, not to be spoken again.
 
The recalcitrant Japanese monsters went one step further. Instead of regretting their sinful and criminal acts against humanity, instead of apologizing for the crimes conducted in Unit 731, instead of bowing in shame and remorse, they did the opposite. They were proud of Unit 731. The rejoiced what they had done in Unit 731.
 
In a recent photograph of PM Abe visiting the Japanese Air Force, he was seen sitting in the cockpit of a fighter aircraft, smiling widely and jubilantly. And the aircraft had 731 markings in bold on its side, together with the proud face of Abe. The Japanese never regret their barbaric acts of WW2. They cherished those moments, those cruelties against their suffering victims.
 
Would the US and UN demand Japan to account for their crimes in Unit 731? No? No need to dig into the past? The crimes against humanity conducted by Unit 371 were many times more brutal, savage than Tiananmen, crimes against human rights, freedom and democracy!
 
The UN and US cannot be so hypocritical to demand China to account for Tiananmen when their shameful invasion of Iraq and the murder of Saddam Hussein and his families go unnoticed. They cannot keep silence about Unit 731 and support Japan as a country of peace and to be the peace keeper in Asia and ignore such horrific cruel acts against the human kind.
 
Don’t dig up the past? Why Tiananmen and not Iraq or 731?

Kopi Level - Green