It is interesting that we trust our lives and property to computers these days. Computers that move virtual mountains faster than we can blink control our cars, planes, city systems, trains and...our finacial markets and banks.
But has anyone thought about the possibility of a "glitch"? Toyota did not and the guys programming for Wall Street apparently did not either. On a PC we consider as litch disasterous. On the scale of our lives and property depend on it, it can devastate a family or the world.
ugly_american: It is interesting that we trust our lives and property
Well there is one other factor I assumed it to be only a coincidence that this event occurred on the 6th. As I mentioned on my wall on the 5th, a test of the theory that exploiting the flaws and greed of the system one could cause it to fail bringing the realization and impetus for a new system. Utilizing what I call the MEMETIC QUANTUM EFFECT, ... See morewhich is about all I will say. One could claim it worked perhaps as only the nudge that sent the snowball on it's descent down the mountain or perhaps it was just coincidence. There is no way to determine since the cause and effect chains are lost inside the cloud. For sure it was probably the alignment of several factors, the Euro situation being the major one, plus the markets system flaws that create a market for gambling rather than real long term investment with dividends returned. I think it is safe to assume though that when a large number of players have a realization they act in concert in a way that is predictable the shared motivation being to acquire as many currency units as possible or prevent the loss of them. For sure the flaws were highlighted on the 6th and exposed for everyone to see. So I shall consider the experiment a success
Richard_Gerber: Well there is one other factor I assumed it to
Hi DK, the article turned out very well, very informative. I do think it helpful to mention "arbitrage" so that everyone understands the desire to purchase on one system at a slightly lower price and sell it on another system at a the slightly higher price, sometimes just a few pennies, before the two distinct systems synchronize. As I have been pointing out all along the "casino" game defeats true purpose of the markets and investing to support the creation of genuine value and the rewards in the form of dividends over time. Those that game the system have done nothing to justify their monetary rewards and only further interfere with the true intentions of the system and create greater imbalance and disparity.
Richard_Gerber: Hi DK, the article turned out very well, very informative.
Exactly. With NO regulations and NO tax on this kind of nanosecond GAMED PROFIT in the new land of anything goes crony capitalism we have now invented the ultimate financial DOOMSDAY MACHINE! And to prove it...THIS IS ACTUAL FOOTAGE FROM THE NYSE ON MAY 6TH THAT SHOWS WHAT HAPPENED! And, yes, Toyota built it!
Being the internet the great equalizer, lets build our Own Flow street, where stocks are mandated to pay dividends, invest in sustainable products,services and projects. I propose Mr. Matai to be the director, and we can leverage the whole Open Source community for software deployment. I will surely participate investing in such trading system.
Jorge_Brown: Being the internet the great equalizer, lets build our Own
Good article. The dip on May 6th was a symptom of what can only be called the coming crisis of computer control common to all complex systems. The stock market is the fastest and the most interconnected global network that we have and since it defines money it is watched far more closely than any other system. But for the same reason that it is important it has been computerized to more fully exploit and control its variables. The problem now is that the nature of the computer is changing. They have always been fast but now they are reaching speeds that reveal different kinds of relationships in the systems, the computers are discovering new financial laws that they are not programmed to handle. All complex systems have breaking points as their complexity increases and they transition to emergent behavior that is not predictable using the rules of the old system. We are just now beginning to see the volatility produced by these breakdowns and they will increase unless the global system itself is "circuit breakered" to add time delays to these feedback loops. But in a global system of soverign nodes this solution is not possible, therefore there is a limit to how complex the financial markets can grow. We seem to be nearing those limits again and the only safety valve that the system has is a total breakdown.
Bobotheclown: Good article. The dip on May 6th was a symptom
"What remains to be seen is the regulators' response and our question would be: Can it work? "
I understand and agree with what you said but I cannot fathom ANY set of circumstances where a written law could possible govern a computer program. These thing are way past what can be described in English let alone be regulated by English. I pity the poor dumb regulator assigned to oversee this software.
James_Brown: "What remains to be seen is the regulators' response and
Hysterisis is our friend -"Hysteresis refers to systems that have memory, where the effects of the current input (or stimulus) to the system are experienced with a certain delay in time."
Fire all the physics and math majors on Wall Street and hire electrical engineers.
rjvg50: Hysterisis is our friend -"Hysteresis refers to systems that have
Fire them all. Right On.
A long time ago I worked with a mechanical engineer at IBM who wanted to build a steam driven oscilloscope. I think a steam driven trading system might be a good idea.
James_Brown: Fire them all. Right On. A long time ago I
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But has anyone thought about the possibilit
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I understand and agree with what you said but I cannot fathom ANY set of circumstan
The only question remaining is "where the hell do I go with my retirement cash".
Fire all the physics and math majors on Wall Street and hire electrical engineers.
A long time ago I worked with a mechanical engineer at IBM who wanted to build a steam driven oscillosco