[Vision2020] AARGH! AARGH!

[Kenneth Marcy]

On Thursday, August 04, 2011 11:46:00 AM Tom Hansen wrote:
> Remember back about four hours ago when the DOW was down 186 point. 
> Those were the good ol' days.

I suppose it matters whether one is watching merely as a spectator or if one 
has "skin in the game," as the vernacular has it. What one observes here are 
the results of the algorithmic trading activities of about two percent (i.e., 
400 of 20,000) of the firms trading between two-thirds and three-fourths of the 
equity transactions in the markets today. The situation has now passed the 
point where computers are generating news stories about trades effected, and 
other computers are reading that news and responding with their own trades.

You may remember an episode of the original Star Trek in which two worlds at 
war with one another had computerized the warfare to the point where as losses 
were incurred, people merely reported to destruction stations for termination.

Kirk, et. al., changed the status quo to return the real horrors of actual war 
to the worlds in an effort to convince them to stop fighting algorithmically.

Whether this episode has any relevance to a zero-based re-evaluation of 
contemporary economy I will leave as an exercise for those interested.


Ken