Gone in Sixty Nanoseconds and other "Knight-Time" Stories w/David Greenberg! 6/8/2012

Welcome to Capital Account. Knight Capital, the market maker that lost a reported 440 million dollars off a "technical glitch," will get a $400 million lifeline from investors to stay afloat. Today's version of 'Gone in 60 Seconds' is more like 'Gone in 60 Nanoseconds' with the use of high frequency trading. So what purpose does this speed serve? Is there anything keeping a Knight Capital disaster from happening again, and what are the implications for the broader economy and the financial markets? Likewise, is there any benefit that high-frequency trading brings to the market as a whole, or is it just a race to the bottom for the retail investor? We ask commodities trading veteran and former NYMEX board member David Greenberg. Also, we look at where regulators stand on high frequency trading as a new study questions the true risk of the SEC revolving door. Is the financial incentive simply not there for regulators, since anyone who actually understands the industry would rather work there for more money than go to a government agency? We ask David Greenberg, President of Greenberg Capital, if regulators are prepared to deal with high frequency trading. Plus it has been one year since S&P downgraded US credit to AA+. However, since then treasuries have rallied with yields reaching record lows. Sorry S&P, reality working against your call again. We talk about this, as well as alien banker life on Mars in today's "Loose Change" with Lauren and Demetri.