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

[Brian Holmes <bhcontinentaldrift@gmail.com>]

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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