Flash Trading Finis?

The New York Times reports that Chuck Schumer has persuaded the SEC to ban one of the most controversial practices associated with high frequency trading:

The S.E.C. chairwoman, Mary L. Schapiro, said on Tuesday that she would push to eliminate a controversial high-frequency trading technique known as “flash orders,” which allow traders to peek at other investors’ orders before they are sent to the wider marketplace.

....In a flash order transaction, buy or sell orders are shown to a collection of high-frequency traders for just 30 milliseconds before they are routed to everyone else. They are widely considered to give the few investors with access to the technology an unfair advantage, even by some of the marketplaces that offer the flash orders for a fee.

Flash trading in an era of supercomputers and 10 millisecond latency is an abusive practive that should be eliminated without question.  The other aspects of high frequency trading are a little murkier: they clearly give an advantage to firms who have the money and connections to colocate massive server farms with the exchanges, but the question is whether these practices are unfair and potentially destabilizing, not whether they're flat-out corrupt.  That deserves further investigation, but getting rid of flash trading is a good start.

The Crazies

James Joyner admits that there are lots of conservative lunatics running around these days:

But here’s the thing:  There’s plenty of crazy to go around.  Remember Bush Derangement Syndrome?  The 9/11 conspiracy theorists who thought Bush and Cheney were in on the whole thing?  The Diebold plot to steal the 2004 election?  Should we judge the Left by the whackos that show up at the anti-trade rallies?  PETA?  Greenpeace?  Of course not.  Almost by definition, the people motivated and available enough to show up in the middle of the day to express their outrage about something are not like you and me.

Professional intellectuals surround themselves with likeminded folks and get the idea that they and their cohorts are the norm for their group whereas the crazies on TV are the norm for the opposition.  It just ain’t so.

Now, obviously there's some truth to this, but there are a couple of things that have struck me about the recent surge in conservative nutballs.  First: there's just a whole lot of them.  The Diebold folks couldn't even get a hearing at Daily Kos, let alone anywhere more mainstream.  The 9/11 truthers have always been a tiny band.  And most of the people who believed Bush "knew about 9/11" just thought he had been warned something was coming down the pike.  There was never more than a trivial handful who thought he literally knew the details and deliberately let the plot go forward.

Second: the conservative lunatic brigade appeared so goddamn fast.  It's true that some precincts on the left went nuts over Bush, but anti-Bush venom didn't really start to steamroll until late 2002 when he was making the case for war against Iraq.  Nobody drew BusHitler signs after he signed NCLB or called him a war criminal for signing a tax cut.  It took something really big to create a substantial cadre of big league Bush haters.

Conversely, the conservatives who think Obama is a socialist, or think Obama was born in Kenya, or think healthcare reform is going to kill your grandma, or think Obama is going to take all your guns away — well, that stuff started up approximately on January 21st, if not before.  And it's not just a weird 1% fringe.  There's a lot of conservatives who believe this stuff.  And there wasn't any precipitating cause other than the fact of Obama's election in the first place.

Every movement has its loons, but the current crop of conservative loons really isn't the same as the lefties who grew to loathe Bush over the years.  These folks were crazy from day one, they've become crazy in scarily large numbers, and their conspiracy theories are entirely untethered from actual events on the ground.  ODS is a whole different beast than BDS.

At the East Bay Express, the Oakland, California-based alternative weekly where I spent years as managing editor, few things annoyed our reporting staff more than the annual ritual known as Best Of the East Bay. That's the issue where we would corral them, along with scores of freelance contributors, to suss out and write up (without their usual cynicism) the area's most noteworthy people, places, activities, art, music, products, services, eateries, bars, and so forth. The freelancers were eager for the work; the staff was merely resigned, knowing that it was this issue that paid their salaries. These Best Of issues have long been a cash cow for alt-weeklies and regional lifestyle magazines, often tripling the average issue's page count. They are packed with advertising and are popular with readers. The Best Of formula has been such a winner that, over the years, daily newspapers and TV stations have attempted, mostly feebly, to replicate it. (Click here for our recent collection of snippets on the death of newspapers.)

While the hard-boiled news hounds found it beneath their dignity to cheerlead for local businesses, what resulted was at least a purely editorial product. We would run full-page ballots in the three preceding issues, as well as an online ballot, allowing readers to elect their own "reader's poll" winners—we took pains to eliminate ballot stuffing and we disqualified obvious cheaters. Neither the winners nor the paper's sales reps were alerted in advance as to who had won, nor did the ad reps have any part in selecting nominees. Allowing them to meddle would have destroyed the issue's credibility. Which is why I don't put much credence in "Best of the Bay Television," produced by KRON 4, a former San Francisco NBC affiliate that bills itself “the Bay Area’s News Station.”

Does David Corn look like the Joker? Or, for that matter, the man who was regarded by Democrats for eight years as the nation's arch villain (or at least one of them)—George W. Bush? Rush Limbaugh, for one, sees a striking resemblance. 

As David notes over at Politics Daily, Limbaugh was riffing yesterday on the posters that have been cropping up that depict President Obama as the Joker (Heath Ledger's version, not Jack Nicholson's). Some see the posters as overtly racist. Not Limbaugh, though. In fact, he thinks Obama and Batman's nemesis share a great deal in common:

[The Joker] had a big damn chip on his shoulder about his childhood and about a bunch of other things. His goal was to undermine the whole system. . . . And to effect the change that the people of Gotham City didn't want, the Joker created chaos upon chaos. The whole city was focused on him and what he was going to do next. He viewed crisis as an opportunity. So the Joker orchestrated crisis after crisis after crisis. And the Joker wore a mask. I mean whoever put this poster together is pretty smart because there are some similarities here to what the Joker did in that movie and what Obama is doing to this country.

Rachel Paulose at the SEC?

Out of the colorful cast of characters who brought you the US Attorneys scandal, one of the most memorable was Rachel Paulose, the young Bush loyalist installed as the head of the Minnesota federal prosecutor's office in 2006. A pal of Monica Goodling, Paulose quickly attracted attention for her swearing-in ceremony, which some observers compared to a coronation. (Although, would you feel properly sworn-in without a color guard and a choir?) She then proceeded to alienate many of the experienced lawyers in her office by quoting Bible verses and ruthlessly dressing down underlings; three senior lawyers in the office resigned their managerial posts in protest. Paulose herself departed her job in 2007; later, a DOJ Office of Special Counsel investigation found that she'd improperly fired one of her subordinates after he complained that she often left classified homeland security reports lying around on her desk.

Now, Joe Palazzo at the very useful Main Justice has spotted that Paulose is still drawing a government salary. She was hired by the Securities and Exchange Commission in March, and works as a senior trial counsel in its Miami office. From what I can tell, out of the most controversial figures in the US attorneys imbroglio, Paulose is the only one who still works for the federal government. A 'where are they now' roundup below the jump:

Healthcare Ad Wars

It's not an election year, but it sure feels like one:

Drugmakers, labor unions, both national political parties and the sector currently under the heaviest fire — health insurance companies — are all weighing in with significant ad buys. Nationwide, more than $52 million has been spent this year on health-care reform-related ads, according to the Campaign Media Analysis Group, setting the stage for what may be a record-breaking legislative battle.

Speaking of this, we'd like to track the advertising and campaigning around the health care bill over the August recess.  If you see or hear an especially egregious ad/robocall/flyer/etc. in your local area, can you let us know about it?  Or send us footage, if you have access to it?  We'd like to post as much of this stuff as possible.  The email address to send it to is scoop@motherjones.com.  Thanks!

Among the feverish press reports of imminent economic recovery, there are two telling signs that it’s business as usual on Wall Street.

First comes the Treasury’s report Tuesday that less than 10 percent of borrowers eligible for loan restructuring under Obama’s program to stave off foreclosure have received any help.

Why? According to the Washington Post, the big banks just won’t budge:
 

I recently wrote about Michael DeKort, the former Lockheed engineer who has been blowing the whistle on Coast Guard contracting debacles for years. Late Tuesday evening, DeKort emailed me to pass on the news (from this source) that the Coast Guard will no longer be using Integrated Coast Guard Systems—a joint Northrop Grumman-Lockheed Martin venture—for any projects related to its Deepwater modernization program. That's probably good news. ICGS, a so-called "lead systems integrator," (PDF) was once in charge of handing out contracts for work on Deepwater. Not surprisingly, a lot of those contracts ended up going to Northrop and Lockheed, ICGS's owners.

DeKort says it's "a step forward to not award future contracts to ICGS," because that means Northrop and Lockheed can no longer essentially "pick themselves" for future Coast Guard contracts. But this "certainly does not mean Lockheed and Northrop can't still win," he adds.

The true test of whether Lockheed and Northrop will suffer further for their alleged mistakes on Deepwater, DeKort says, will be whether or not they get big future shipbuilding projects coming down the pipe. The most important and lucrative contracts in the works are for five remaining 418-foot "National Security Cutters" and a new class of ships called "Offshore Patrol Cutters." Those two groups of contracts may represent around half of Deepwater's $25-billion budget.

DeKort thinks Northrop and Lockheed could win the contracts despite their past mistakes. "Seems to me it would take an act of God for Lockheed and Northrop not to win the remainder of the [National Security Cutters]," he says. "So the real issue is the [Offshore Patrol Cutters].  And that will come down to who else bids, how the competition is handled and who wins.  This all could very well be a boondoggle."

A boondoggle would be bad. I will look into this more later today.

That high fructose corn syrup isn't exactly health food won't come as a surprise to most people. But just in case its less-than-stellar nutritional profile wasn't enough to make you wary of the ubiquitous goop, get this: HFCS could contain mercury, a known neurotoxin.

Melinda Wenner's "Corn Syrup's Mercury Surprise" (July/August 2009) tells the story of Renee Dufault, an FDA researcher who began to suspect that some high fructose corn syrup might contain mercury when she learned from an EPA report that some chemical companies make lye by pumping salt through large vats of the heavy metal. Lye, Dufault knew, is often used to separate corn starch from the kernel during the manufacturing of HFCS. Curious, Dufault sent some samples of foods containing HFCS out for mercury testing, and sure enough, the lab found mercury in most of the samples. A second test confirmed her findings. At around the same time, a study published in the journal Environmental Health reported that researchers had found low levels of mercury in certain brands of kid-favored foods, like grape jelly and chocolate milk.

But when corn lobbyists got involved, the plot thickened: Some types of mercury are more dangerous than others, and the Corn Refiners' Association, an industry group, pointed out that neither Dufault nor the Environmental Health study identified which type mercury was present in the samples tested. And here's where things get really strange: When Dufault tried to report the findings to the FDA, she was told to stop investigating. 

Which kind of mercury is most likely in HFCS? And why has the FDA been silent on the matter? Read more here.

Need To Read: August 5, 2009

Three pieces you must read today:

The best of the rest:

Like most bloggers, I also use twitter. I mostly use it to send out links to interesting web content like the stuff above. You can follow me, of course. David Corn, Mother Jones' DC bureau chief, is also on twitter. So is my colleague Daniel Schulman. Follow them, too!