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Re: <nettime> The secret financial market only robots can see
Brian Holmes on Fri, 27 Sep 2013 02:54:05 +0200 (CEST)


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Re: <nettime> The secret financial market only robots can see


Hi Chad -

First off, not to worry, I recall good interactions with you and I respect you as well.

On 09/26/2013 02:40 PM, Chad Scoville wrote:

The conversation should be less emotional about the implications of
this systemically, and instead how much novelty gets generated in
culture as a afterimage of electonic market making. Robots trading
was a forgone conclusion when NYSE SuperDOT came on the scene.
Earlier, Reuter revolutions infomation arbitrage with the uilization
of passerger pigeons to exploit data leakage between markets.

Hmm, did you think I was getting so emotional?

My point was not about the morality of machines trading against each other; instead I was saying that too much is made of high-frequency trading and that it's on the decline since 2011. I just finished studying all that so I have some notions.

At the same time, I think that finance of all kinds has taken over control of the monetary system generally since the end of Bretton Woods, severely limiting governments' capacities for social intervention. I also think that finance performs resource allocation in view of benefits calculated for decreasing numbers of people (far less than one percent of the global population) over much shorter time-frames (it's true that unwanted consequences rarely appear in a trading year, much less nanoseconds). Finally, I do think that the claim to manage risk through hedging strategies tends to deny collective responsibility for risks that, nonetheless, are run by everyone and whose effective consequences are typically paid for by large numbers of people, whether through losses of vital assets like houses, or by taxpayers in the form of government intervention (whether it's in the economic, social or ecological realm).

Now, it's pretty hard not to experience emotion in the face of such things. I get worried, even somewhat anxious, about how our societies are developing, and it does make me angry whenever I examine it. Should I be dispassionate and about the very conditions of my own life and the lives of those I love?

All that said, there was no golden age "before" global finance as we now it today, so one should neither demonize nor relativize. Moralism (ie reference to a pure good that does not exist) is useless, there I agree with you.

Still I'm just not convinced that the antecedence of carrier pigeons over fast computers plugged into low-latency networks really absolves financial players of the increasingly sorry state of societies that they increasingly govern.... Sounds like saying that if it happened in the past, must be fine today. As for novelty, it doesn't do that much for me. There is a lot of novelty, for better or worse. The new for the new is like l'art pour l'art.

What do you think?

best, Brian


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