Is the Market Rigged? Absolutely, Says Streettalk Advisors CEO
Follow The Daily Ticker on Facebook here!
The U.S. Labor Department's monthly employment report is one of the most-anticipated market-moving data points watched by investors and traders on Wall Street.
But ahead of Friday's February jobs data, CNBC reports that the Labor Department and other government agencies are concerned some traders are illegally accessing data ahead of its official release while others are jamming agencies' websites to give only a handful of people access to information, slowing it down for everyone else.
In an effort to prevent potential future data breaches, the Labor Department has asked the company responsible for securing the nation's nuclear stockpile to analyze its security protocols. The U.S. Energy Information Administration is also targeting and blocking certain computer IP addresses that seem to show "malicious intent," according to CNBC reporting.
Jane Callen, a spokeswoman in the Office of Economic Affairs at the Department of Commerce, told CNBC the cat-and-mouse game has been around for a long time. "And at each turn, the government is going to make sure they're doing their best to ensure the right protections are in place," she says
News of this brings us here at The Daily Ticker to ask again the age-old question: Are financial markets rigged against the individual investor?
"Absolutely," says Lance Roberts, CEO of Streettalk Advisors. "If you're trying to look at the economic data that is coming out and you're hitting refresh on your Internet browser you are so far behind Wall Street you'll never catch up."
But the information lag time is not the only problem facing individual investors.
High frequency trading also puts the little guy at a disadvantage. Traders who profit from this type of investing use powerful computers to react to market movements and patterns before any human possibly could. Along these same lines, major investing firms have moved their trading systems as close as possible to Wall Street to shave nanoseconds off the transaction time.
"The average investor really is at a disadvantage these days," says Roberts.
Then there's insider trading by members of Congress. Even our very own elected officials are using inside government information to profit at the expense of everyone else. The public outcry to ban this behavior, which has been going on for years, finally came to light after a CBS "60 Minutes" report last fall. Since then, a bill to prevent congressional insider trading has moved quickly through both the House and Senate, but likely still does not go far enough to make any real difference. (See: The STOCK Act: A Step Foward But Not Perfect, Says 'Throw Them All Out' Author)