Slashdot Mirror
Sudden Demand For Logicians On Wall Street
An anonymous reader writes "In an unexpected development for the depressed market for mathematical logicians, Wall Street has begun quietly and aggressively recruiting proof theorists and recursion theorists for their expertise in applying ordinal notations and ordinal collapsing functions to high-frequency algorithmic trading. Ordinal notations, which specify sequences of ordinal numbers of ever increasing complexity, are being used by elite trading operations to parameterize families of trading strategies of breathtaking sophistication. The monetary advantage of the current strategy is rapidly exhausted after a lifetime of approximately four seconds — an eternity for a machine, but barely enough time for a human to begin to comprehend what happened. The algorithm then switches to another trading strategy of higher ordinal rank, and uses this for a few seconds on one or more electronic exchanges, and so on, while opponent algorithms attempt the same maneuvers, risking billions of dollars in the process."
Well at least, they seem to start to realize that perpetual growth is impossible to achieve in a finite universe. For us, right now, this means our planet.
We may need to start businesses on other planets until we have conquered the whole universe in order to maintain the illusion that perpetual growth is possible.
Yet, the whole point of investing in the market is more or less (at least it was traditionally) based on a perpetual growth principle where there would always be new markets to conquer thus, rising stocks on average and a perpetually growing economy.
Since they seem to begin to realize that perpetual growth is impossible and that trading is what they have done all their life, they need to keep the profits coming in anyway. So they figured that by using "high-frequency algorithmic trading" they could keep the profits coming in.
Well, at the expense of whom ? How long can this trend be maintained before major problems arise in the economy ?
Everything I write is lies, read between the lines.
So, the next global financial crisis will happen a lot sooner? This is not a good thing. They invest in speculation instead of companies.
Buy gold.
(Half in sarcasm, since if the world economy collapses totally, it would probably be better to have something like, say, food.)
Nice one though.
He wants his arrow back... with interest :)
Sorry but I patented that idea^H^H^H^Hbusiness method.
What you seem to fail to realize is that growth has nothing to do with making a profit in derivative markets. And high frequency algorithmic trading has been here before, and now they step up that game. So as far as "change" goes, nothing has really changed, and nothing will, high frequency algorithmic trading is here to stay. If anything, this is making markets much more volatile. And if you think last weeks 1000 DOW drop was an exception, those are going to be more frequent.
Experiments and other stuff
As someone who understands math to at least a certain degree (I publish in what is effectively applied mathematics), I know enough to say that this is bogus. The Wikipedia page on ordinal collapsing functions (http://en.wikipedia.org/wiki/Ordinal_collapsing_function) shows that they relate to transfinite numbers (various orders of infinity). It is, to me, beyond plausibility that this could have any practical application in trading-- unless it's some kind of weird fad that only the mathematicians understand is a joke. I think someone needs to dig down further into this source.
The
At least for us low-lives; my hypothecary credit depends on a fixated repayments carrier, and my interest is down and (almost) out.
:P
Now I just wish the credit would go away and leave me alone.
Non-supporter of Online Activation and any other draconian DRM
It's like solving a problem by making it worse.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
many stocks are valued entirely on speculation? how does one apply logic to that? what about crap like derivatives trading? effectively a "dont ask, wont tell" sort of thing based entirely on what you "think" the value of something that has no value might become?
Good people go to bed earlier.
Whether it is a joke or not, it is clear that no private investor can possibly compete with an almost completely unregulated financial industry that can lie and cheat and which has almost complete control over the government.
This article makes little sense and the source is highly dubious.
I read it as:
Yadda yadda bunch of pseudo words yadda algorithm more yaddas.
Seems to me they need a few good engineers to boil down the theoretics into something smooth and workable. This talk of switching models should be run in tandem algorithms to help tune up the main trusted one in use and to test every concept under the sun. At least thats how I would work it. If I were King. That gives me and idea...
Gratuitous add: Vote for King elect Dilvish - he will ordinize your automated ruin, building more jobs. More Jobs! More jobs == better pay == more competitive market == cheaper prices for the things you want. So King Dilvish == cheaper prices && more pay at the same time. You wont find that concept taken too far anywhere else, right here.
Apparently I like posting while a bit drunk a bit too much. But this is post analysis so its too late for you.
I think you underestimate just how much I just dont care.
Its worth a try, get out what you can while the machine is still been fed.
Domestic spying is now "Benign Information Gathering"
Complexity in these algorithms is only to hide the fact that the are FRONT RUNNING trades, they have servers that are directly next to the ones performing normal trades and using the speed that affords they put themselves between buyers and sellers. Goldman Sachs steals 100 million USD every day. To hide this theft they claim sophistication. Same story with derivatives, they are FRAUD. to hide the fraud they are made 'complex' using the work of so called Quants. It is thieving and it is nonsense.
I can put my PhD in Mathematics to work!
Very few people will ever care. the world that people assume to exist in the stock market rises and falls as people feel more and more secure with their transactions.
yet things like this make people feel less secure with their limited knowledge over the system. in return, removing capitol from the market.
the more complex a system built on trust get's, the more likely it is to fall apart.
This news is food for Slashdot readers! It is my guess that there are more logicians (albeit self taught...) here than at most forums. But, what do I know.
First, start to enforce a five minutes timeslot for financial transactions. This will stop those pure speculative folks who kill the global economy.
This will end poorly (again). It's basically a bunch of business majors managing a poorly understood programming effort, but instead of running things in a development environment they're running it on massive computers and the variables are REAL MONEY. Hiring mathematicians to write their algorithms won't likely help, they will eventually do something stupid, divide by 0, have unbounded growth, or otherwise watch their program crash along with the market.
I'm cashing out everything, buying canned food and ammo and moving to a farm.
My favorite quote doesn't fit into 120 characters. Now no one will like me.
Mod parent and grand parent up!
I would be surpriced if the speculants making good money are using strategies that they are willing to share with the genereal public.
Algorithmic traders keeps as many secrets as they can, and it is foolish to believe that accurate information about production models can be found as easily as the anonymous reader seems to suggest.
I'm cashing out everything, buying canned food and ammo and moving to a farm.
Where you will grow your own canned food and breed more ammo?
Maybe you should take a few books as well, or better, read them before you move.
Musicians don't die. They just decompose.
Well, by now we should all know that the only way to make money on the stock market is by having some amount of insider information. Everything else you can more or less forget about. ...unless, of course, you hook up a couple of billion to a computer program and really, really hope that it does not contain any bugs whatsoever...
Free PC version of ChipWits at http://www.breueronline.de/klaus/chipwits/
If you watch a stock in real-time you can predict where it will move quite easily. Thanks to automated trading, you can just draw a line of best fit based on the stock's current direction and also determine a high and low amount of noise to where it will bounce around. Computer's have no idea how much a stock is worth, they just simply use these values to determine when to make a transaction and actually help self-perpetuate everything by being the major driving force behind a stock's movement. Changes in direction are caused by actual human intervention, such as a large buy order spaced out over several minutes.
For example, if an algorithm says "the high point is at $10.50", then when the stock gets that high it will sell the hell out of it until it bumps the price lower. Then when it says "the low point is $10.42", it buys the hell out of it again. However, if it notices an overall downward direction, it will reshift what it's idea of a high point and low point are as time progresses, helping to self-perpetuate that downward direction since it is probably one of many automated systems that work similarly and overwhelm actual human interaction with the stock price.
It's not necessarily a bad thing, if you realize this, then you can easily predict a stock's movement and make some easy income; knowing exactly where the low and high values are going to be at any point in time. Again, the only thing that causes a stock to change its movement is actual human interaction that results in the trend being broken.
Maybe you should take a few books as well, or better, read them before you move.
Also, be careful with your eyeglasses. If you dropped them, it just wouldn't be fair when you finally had time enough to read.
Want to improve your Karma? Instead of "Post Anonymously", try the "Post Humously" option.
when (not if) this crashes (once more)...
don't those morons learn from their mistakes ?
"fools try everything. that's how you recognize them !"
Margaret Atwood once described civilization as the judicious trading of "freedoms to" for "freedom from". e.g. You trade the freedom to murder anyone you like for freedom from being murdered yourself. While a rather distressingly large percentage of Americans would scream "COMMIE PINKO!!!" at me for daring to suggest this, I feel that the stock markets could stand to be civilized a tad.
What is the purpose of the stock markets? Are they meant to be a video game played by A.I.'s for big cash prizes, or a way of facilitating investment and trade? It's time to find ways of restricting high frequency traders. While cumbersome regulations are one option, perhaps a per-trade tax or user-fee would be better. A tiny one, percentage wise, that will only have a significant impact on high frequency traders. Cuts to other taxes could be made to offset them for average frequency traders and perhaps even benefit low frequency traders.
There are, naturally, many other ways to approach this. All it takes is resolve and, in the U.S. at least, thick skin.
I have ammo, sounds like you don't. I'll have dinner at your place.
My favorite quote doesn't fit into 120 characters. Now no one will like me.
Well, we have seen PhDs and Nobel laureates busting their funds (some even twice), so I am not amused. We should be more humble about our "knowledge".
It's just a blog post, the summary is the first two paragraphs condensed. No sources, except for some links to sites explaining some terms.
investments(a) -> profit(a)
Doesn't high frequency trading abolish the market makers ? I mean, when you buy a shitload of stock at a certain price, you take that volume out of the order book. Since you usually buy low (or start picking at the low end of the order book), the higher offers to sell in the order book remain. That drives the average price up (logical, since you've just set the 'demand' side to high), and will force market makers to inject a certain amount of that security as an offer in the order book at the (now inflated) price. However, a split-second later the order to sell the same amount at the (now accepted) higher price is back in the order book by the buying party, forcing the market maker to either withdraw their bid, or accept the price of the seller. That is not profitable to them.
Religion is what happens when nature strikes and groupthink goes wrong.
This will end poorly (again). It's basically a bunch of business majors managing a poorly understood programming effort, but instead of running things in a development environment they're running it on massive computers and the variables are REAL MONEY. Hiring mathematicians to write their algorithms won't likely help, they will eventually do something stupid, divide by 0, have unbounded growth, or otherwise watch their program crash along with the market
Hey, that's no problem as long as they are investing their own capital and when they lose it, they really lose it.
Oh. Wait.
I was part of a team that created similar (but a lot simpler) algorithms over 5 years ago.
15 years ago you could create a algorithm and let it run for years and it still would be profitable.
5 years ago the same algorithm stayed profitable for about a minute. After that "someone" started guessing your actions and cutting your profit, in few minutes your algorithm would only generate losses, while profiting others.
Initially our program traded with options and futures and most strategies were based on correlation of different goods/markets, a bit later on we had a pool of algorithms running in paralel, with constant reevauluation of profitability of each algorithm. In the end the most profitable algorithms were the ones that acted against all logic and should have generated imense losses in "classic" market. It was all about guessing what others will guess what you will do next and acting against it.
The company ended it's operations 3 years ago since it couldn't keep up with time (By then it was all about latency and proximity to ex datacenters).
We did consider building a high-frequnecy trading datacenter next to ex datacenter but the plan was shelved due to uncertanty what our competitors would do. (HF trading is really simple.. you don't need any complicated algorithms... just wait for any buyer to send an order to market, with market price and huge quantity (near or orver current cap for given level) and since ex will take few ms. to allocate the order you can, within that time place 2 smaller orders one for buying at given price and one for selling at next level. If your quantity is 10% or less of the clients quantity and you can act within 1-2ms (incl. latency) there is a good chanse that your order will be prefered over the larger order...)
John Slattery for Prescott Financial urges you to diversify your gold portfolio with women and sheep.
Well, lucky I know how to read Braille.
perhaps the fee could be designed so that it doesn't necessarily create a barrier to trading too frequently, although this would be one factor in its calculation. sometimes high frequency trades might be beneficial to the market and this could be reflected in the calculation of the fee.
im thinking of a variable fee, so that the traders can account for it by assuming that the maxiumum might be charged (modeling the fee would then become part of the algorithms of some traders). Anyhow, the purpose of making the fee variable is to provide a range, corresponding to how beneficial or harmful that trade (or set of trades) is to the market or some sector, a set of securities related to the one being traded?
So for example, if at the end of the day, or perhaps in 1hr's time or whatever is practical while achieving the desired result, the volatility of the underlying security has decreased then the fee might be towards the low end of the range. If the volatility has increased, perhaps with respect to multiple weighted histories on various timescales, then the fee would be higher.
could this work?
Do you have any to suggest? I'm a little new to the whole "ammo breeding" field, and could use some tips.
I dumped a bunch of bunch of rounds in a hole out back the last time the feds were banging on the door, but they haven't sprouted yet.
Is the Farmer's Almanac a good reference for this sort of thing?
In search for something to explain the concept of 'money' I ended up with describing it as 'compressed time'. Someone works for you in return for money - he gives up his time in return for your money. He can use that money to make someone else work for him, be it a farmer who grows a head of lettuce or a mechanic who fixes his bicycle. Most uses for money can so be related to time while some of them seem more related to naturally occurring scarcity, eg. the use of money to acquire precious metals. All these 'simple' uses of money have in common that the money directly relates to something tangible: time and scarcity.
This seems wholly disconnected from what is happening in the financial world where they now are looking for even more magical tricks to keep their illusion going. Are they trying to do what seemed impossible to everyone from the alchemists to Einstein and beyond? Are they trying to create more time, to find a way around the fact that one bread or fish divided makes many crumbs but nothing more?
Of course not. They might be devious but they are not stupid. All they want to do is keep the circus going. As long as people hand over their money they will continue to do their magic tricks to bamboozle the onlookers. They know they are just tricks, just like a magician knows that rabbit he just pulled from his hat did not spring into existence spontaneously but was dragged by its ears from a hidden cavity. They want to breed money like you can breed rabbits. Just like rabbits the money wants food to grow. Rabbits eat grass, mostly.
And money? What does money eat to grow?
Money eats people. It eats us.
--frank[at]unternet.org
Sudden Demand For Logic On Wall Street
So what, precisely, is the social worth of these trading activities? I can't believe it's to better promote an efficiently performing market, as it seems algorithmic trading has the potential to have the exact opposite effect (a point demonstrated a week or so ago, with that huge crash).
I'm confused as to why he wouldn't just GROW food on his FARM. What's the need for canned...?
Breed ammo? Steal reloading supplies.
Sudden Demand For Common Sense On Wall Street
Crocodile dilemna
tl;dr : you can't predict the behavior of people trying to do predictions and taking your predictions into account. Which happens routinely on Wall Street. You can hire as much logicians as you want, they are not people who can do and undo the rules of logic, they just discover them.
The Wise adapts himself to the world. The Fool adapts the world to himself. Therefore, all progress depends on the Fool.
"But miss, why couldn't people see how unsustainable, irrational and inhumane the capitalist system was?!? I mean it was a system of exploitation and oppression! I just don't get it!"
So what's new with the banking industry? They still allowed to gamble with everyones money and take the profits all for themselves.
They think they are smarter than the average worker casue they know how to make more money and they understand the markets. What crap. Unless the world stands up (which is unlikely) and stops this practice, we are alwasys going to end up big business in poverty. The FAT cats will continue their dubous practice of disgusing bad depts and selling them on making huge profilts out of invisible money. I guess the business will just move to countries that tax them the least?
Now to solve it all, goverments are rubbing their hands together envisioning a large TAX pot, which they can help themselves to (and would eleviate problems when the next slump occurs). Sounds like a perfect recipie for corruption to me.
On another point I saw a TV ad with a loan of over 2000% APR! Shit daylight robbery on the poorest in our society. Such rates should be illegal IMO.
My guess is that those smart logicians have figured out that wall street is just some sort of shell game - and now wall street is offering to cut them in on the deal to keep them quiet.
The problem with the market is the volatility. With millisecond trading and shorts, the average idiot doesn't stand a chance.
You are totally correct regarding derivatives and high frequency trading, but I can't read your position, do you think this is good?
Not that we can do anything about it.
... raise money for a business to expand and improve their products & serves. Those who invested would share in the profits of losses.
You invest in companies you believed in. This helped industry grow.
Today that no longer really exist as the stock market has gotten so abstract that you may not even know where your money is invested. For all you know your money could be going to a company developing bad things. But what do you care so long as your money is growing.
What this story really tells is how so totally abstract the market has gotten that it becomes a different game every few minutes.
Perhaps the best thing to do is reset the game.
There are plenty of examples where the abstract levels of the stock market was used to extract lots of money in its transfer of money game.
The Trillion dollar bet which is people would just follow teh money they would know what triggered off 9/11 (all the information you need is public accessible - media won't do it as they were threated with anthrax) Then there is Bernie Madoff and more...
Stock Markets are not working for teh reasons they were created and this story only points out the extream of what the original purpose is getting distorted.
You can never find a majic formula, for there is only so much money in the market and to win a bundle means some others have to lose a bundle.
A magic formula would be win win, and that is the way the market was suppose to work. YOu invested in companies they produced better products and services (real tangable wealth). But just mobving money around is not producing anything but trader fees and who has the money. Where are teh products and services in this? Ph wait, its all about financial products and services, forget food, clothing, shelter, medicine, etc...
The dangers of abstraction.
I'm sure they have symbols on their keyboards for Infinity-1 and less then zero, but not negative.
Society is so fucked up that people are being paid 7 figure salaries to develop smarter gambling algorithms, that produce no real value, when they could help solving science hardest problems. Specially people with this knowledge.
Those who do not remember history...
sounds like a "man-in-the-middle" attack.
-
the 10% of humans that own near everything in the world
really need to wake up to the idea, that living in a fairytale
castle in the middle of a vast slump is not as cool as
living in a so-so mansion surrounded by green rolling hills
with fresh vegetables and eggs everyday, non?
-
anyways, if you want to invest, there only one thing to invest in: robotics and automation.
unfortunately the big machine creator firm are all more or less privately own, since
they are smart and don't want greedy short-term thinking "shareholders" interfering
with their plans.
Who's this Christian Marks?
Anybody found any kind of confirmation on this news story from real news outlet and not a simple three paragraph blog? I'd really like some links if anybody found any? This is the kind of story that seems true but I just can't feel I can pass it along without a more trusted source. Unless I should know who this Christian Marks guy is?
Time for a trading tax? A previous employer of mine implemented a hefty fee if their funds were resold within a few days, exactly to try to stop automated trading of the normal small price fluctuation that happen all day (after NY AG sued about 50 firms for allowing it). It helped. The people it hurt were the mom and pops that simply wanted to balance their portfolio after some other event, and were basically locked in for a few weeks.
Its been suggested before. Add a small tax so a long term investor essentially doesn't feel it, but the gambling addicted high frequency traders will be out of biz. Perhaps someone can explain to me the economic value that high frequency trading provides to society. If people want to gamble, do it with their own money in vegas or some other casino. Wall street has simply turned into a casino where the Goldman's are the "house".
Good post! Exactly where I stopped reading. It's amazing (-ly sad) but I think the average person would agree with the quoted statement.
Machine trading should carry the death penalty- because it'll be the death of us.
dave
The siphoners add no value to the market, in fact exactly the opposite. They take advantage of market anomalies that can only be detected by ultra-high speed trading to remove money from the system. A simple example of a market anomalies would be taking advantage of the distributed market place whereby you can trade the same stock on many exchanges and none of them perform at the same speed. So you see which way the stock is moving on a fast exchange and then take advantage of that on a slow exchange before it has had the time it needs to react. Just like betting on a horse race after it has finished because you know the result before the bookmaker is aware the race is over.
The other high frequency shops are adding value to the markets in the same way a market maker used to. They serve a function of keeping the market liquid. This means that a buyer can always guarantee to buy a stock or a seller can always guarantee to sell a stock because the market maker keeps some inventory to bridge any transitory lull when there are more buyers than sellers (or vice-versa) and yet the price is deemed to be correct. They are the brokers who reduce fluctuations in the market and offer a valuable service, even to a joe who wants to sell his 50 shares in IBM.
Just like anything, there are good guys and bad guys. The tool is high frequency trading. It can be used for good or bad, depending on who is using it and what they are using it for.
Disclaimer: I don't do any high frequency trading.
What I'd love to see: The world's best mathematicians take a long hard look at the algorithms used in HFT, improve on them if possible, and then publish them openly. The financial world is far too black-boxed and clandestine. It's no accident that the 'shadow banking system' sounds like some kind of criminal underworld. Any world's-best mathematician out there who isn't a profit-crazed greed-monkey want to take a shot at it?
"Ignorance more frequently begets confidence than does knowledge." Darwin
Maybe you can explain what I've always wondered about. The stock market serves two purposes: Funding companies and betting on their future perceived success. (Perceived, because you're betting on the value of the stock, not the value of the company.)
What links those two together, other than happenstance? If I think a certain horse is going to win races, I can gamble, and so can others who disagree. But that money doesn't fund the horse's trainer. What does betting on "people will like Apple" have to do with "Apple needs a cash infusion"?
The market was challenging but tradable until about 2008. Since then, it regularly violates accepted behavior. It's gotten smarter than I am.
The only way to win is not to play unless the rules are changed.
Allowing goldman sachs to see incoming orders and then place buy and sell orders in the microseconds before those orders execute would be frontrunning (and illegal) if it was being done by humans at normal speeds. They are supposed to be the market maker for cripe's sake-- that's why they get the privilege of seeing the orders.
I have started to think that the collective expert rules system and robotic speed made the market unsafe for my money over the last two years.
I keep some in on the chance we get a wave of inflation. But the market mainly seems to exist to pump money out of the hands of most in to the hands of a few these days.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
4 seconds is too long to leave an opportunity of more efficient reallocation of capital unexploited, yet there are people who have been unemployed for over a year? This implies that we've created an economic system where it is a more efficient use of resources to rearranging ownership of theoretical constructs than finding a place in society for people who have none? Doesn't it seem that we've sort of lost sight of what the purpose of an economy is?
The market is supposed to provide the capital to foster the development of new business. New businesses supplant existing businesses when they can produce goods and services with greater efficiency. And the investor gets a cut of the increased productivity.
The market no longer works like this. It has become more like legalized gambling which distorts the whole business community. The company I last worked for was a .com that survived the downturn by focusing on its profitablity and business methods. It consistently made a profit. However, after issuing it's IPO it no longer paid as much attention to profitability. Instead it focused on making it's investors happy. Investors who looked to rising stock prices not profitability.
And as to where the money comes from? Out of your 401k. The Fed has arranged to make interest rates so low you have no choice but to invest you savings in stocks or bonds. So the market keeps going up because stocks go up because enormous amounts of money get pumped in as people plan on having a retirement. As the saying goes, inflation is caused by too much money chasing too few goods. So stock prices go up so long as enough people are investing their retirement savings in the market.
There are historically four disciplines within mathematical logic :
(1) Set Theory has often been functionally quite close to analysis, especially if you've the good sense to pursue descriptive set theory instead of romantic stuff like independence results. Very challenging field.
(2) Model Theory has traditionally been functionally quite close to algebra and algebraic geometry, although some analysis worms its way in via real-closed fields, o-minimality, etc. Another very challenging field.
(3) Proof Theory has traditionally been concerned with representing mathematical proofs as formal objects, which is useful if you're talking about changing the underlying logic. "Real" mathematicians simply don't care much for proof theory, and debacles like fuzzy logic give all logic a bad rap, but good proof theory is very useful for AI.
(4) Recursion Theory has traditionally occupied the border between computer science and mathematical logic. In fact, their results are usually not very relevant for computer science, but that didn't stop Robert Soare from renaming the subject to computability theory after he was denied an NSF grant.
We've been under the impression that (1) the really smart people interested in recursion theory usually realize they're better off doing PhDs in computer science, but (2) weaker researchers get good jobs in recursion theory, due to political savvy and the computer science connection.
The set theorist Paul Cohen is the only logician that has ever won a fields medal, although the model theorist Ehud Hrushovski was also seriously considered too. Imho, we're far more likely seeing a fields medal go to a computer scientist than for recursion theory or proof theory to ever take one, but who knows what the next century will bring.
What could be rarer ( and more valuable ) than a geek who bullshits well? Typically ability in one area causes the other area to atrophy.
...
Is that another way of saying "we've passed twice, so let's run a draw play"?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
You don't buy futures to insure against bad weather. You buy crop insurance for that.
You use futures for
1. Price discorcory discovery [e.g. should I plant Corn at $3.80 per bush or Soybeans at $9.80]
2. Insure against price movements. Spends gobs on money in the spring, lock in prices for the fall. Once you have done that you can focus on being a farmer instead of spending your time trying to guess where the market will be in 6 months.
You are the one who is full of it. This stock market has changed radically over the last century and in particular since fast computer trading hit. It really is about skimming money out of the system, not producing it. These big casino houses with their insiders in and out of government and the Fed are parasites, along with their little coat tail riders, and nothing more. It has little to do with investing in the traditional sense and most everything to do with skimming frauds. The whole system is rotten and based on congames, deceit and insider cronyism.
Does anyone actually have anything to say about TFA ?
It seems to be more "game theoretic", (looking at the graph of possible moves and inferring value back to the root) which makes me think about the connection between ordinal numbers and game theory that John Conway wrote about in his 1970 book "on numbers and games".
"...uses this for a few seconds on one or more electronic exchanges, and so on, while opponent algorithms attempt the same maneuvers, risking billions of dollars in the process."
Wasn't Robot Wars more fun to watch, though?
Trans-quantitative Shell Game is all ..
> Also, empirical evidence is against you, with higher minimum wages actually triggering even more employment since (among other reasons) the lower incomes don't save, they spend.
Do you have a reliable source for this? It's odd, because normally raising a standard makes the supply side go down because of the increased cost. (i.e. when labor costs more, less labor is affordable.) Still, given the right numbers, the effect you describe could counteract that.
-- IANAL, this isn't legal advice, and definitely isn't legal advice for you. Also, Squee!
Look for these very mechanisms to be banned by congress, the senate and possibly by presidential decree as the kind of "wealth creation without effort but strictly through gaming the system" which led us down the same path that derivatives did.
All of the gains were wiped out and everybody but the insiders got stuck with the multi-trillion dollar tab when the music stopped and we found out the chairs were rented and had all be repossessed.
These are the kinds of games which should be outlawed.
MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
...and it isn't to tell them when their schemes make no damn sense?
"I don't care about the Constitution!" --Bill O'Reilly, November 17, 2009
Sure, it was trying to destroy us with wave after wave of nigh-indestructible gorgeous terminators. But you knew where you stood.
Gleefully fucking with our financial markets just to mess with our heads and make us feel even less in control than now? That's just cruel.
Pug
An Invisible Entity of Vast Power whose existence must be taken on faith alone: Liberal Media
I admire the sentiment.
You bought stock and it should not be thought of as currency.
Its a brilliant idea, and unenforceable unless we stick a middle-man in there.
Money is a "fungible" resource.
Its also very perishable (How's your Zimbabwean Dollars keeping their value there? :-)
Stocks must be convertible to and from currency but the speed of the transactions must be slowed to twenty four hours from inception to execution.
That
MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
The other high frequency shops are adding value to the markets in the same way a market maker used to. They serve a function of keeping the market liquid. This means that a buyer can always guarantee to buy a stock or a seller can always guarantee to sell a stock because the market maker keeps some inventory to bridge any transitory lull when there are more buyers than sellers (or vice-versa) and yet the price is deemed to be correct. They are the brokers who reduce fluctuations in the market and offer a valuable service, even to a joe who wants to sell his 50 shares in IBM.
I don't think Joe cares that his trade took five minutes instead of 0.5 seconds. Your "Good" HF traders are providing a service that nobody needs or asked for.
God, I hate people who insert their bigotry into every discussion. It's like a small child who's been given a plastic bat and now runs around hitting everything.
Carry on, hater of Americans...
SO the way to fix the problem is to require every transaction to be routed to two or more geographically diverse servers in order to take effect.
Then it doesn't matter if Goldman's robots are located in the next cage over from NYSE's servers, they still have to deal with the same communication latency as everyone else.
Unless, of course, they use quantum entanglement to keep robots on both coasts in perfect sync.
you would strategically prepare for betting on Roulette?
Rick B.
is about what we need. All traders need to be human, or at least Mentats. Anyone using a computer to do "intelligent" trading needs a lynch mob. With torches.
"It is by will alone I set my mind in motion. It is by the juice of sapho that thoughts acquire speed, the lips acquire stains, the stains become a warning. It is by will alone I set my mind in motion."
Sell Sell Sell!
if you invest, the company grows.
if you trade, the company speculates
Actually, this has already been done, on a limited basis. Not sure what is available at present, but some ECNs have offered the option of such an auction as you describe. It's really just the same as the typical "opening auction", but then repeat it at some interval, more typically a few minutes (like 15).
But this has only been done as an available option to traders, and then on a single ECN.
By eliminating ECNs (e.g. only a single, central market) and allowing only this type of trade, the system could then be "fair".
Recursion theory has several old guys who're extremely politically savvy, like Robert Soare who renamed the whole field to computability theory when the NSF turned down his grant one year.
Conversely, the young people going into recursion theory are almost as weak as those going into applied mathematics because all the romantic problems like P=NP are actually in computer science and the smart ones go there.
I'd imagine they've just written some articles talking about everyday infantry problems in financial language, and got their worst students high paying jobs.
In fact, academia should push more students towards industry, but obviously recursion theory isn't terribly relevant for trading.
Also, proof theory actually is relevant for numerous artificial intelligence applications, it's not very relevant for the rest of mathematics of course, and everyone looks down on them, but it's probably relevant for high frequency trading.
What is this, a very condescending programmer who specializes in faster factorial functions? ;-)
We have advanced statistics that will accurately determine --based on the perfect market economy-- how a stock at a current price will rise or fall. Its nearly as accurate a model as weather forecasting. ...the problem...unlike the weather, is that there are bailouts, government incentives, strikes, unforseen shortages, all contributing to break the ...perfect market economy. So the super schmantzy ultra advanced models collapse like dry sandcastles in the presence of a 3 year old on a mission to make the beach flat. With a grin he pushes the castle over---no matter how ornate or fancy. And all that careful design comes tumbling down. Hello Fanny Mae, Hello Freddie Mac. Hello General Motors! Hello Greek protester dog. I think your name must be Pan (the name of an ancient Greek God, and also a root word in words like Panacea, Panic, and Pandemonium). Ultra-advanced actuary tables, supercomputing clusters calculating percentages of options and equities, and it all goes to shit as if on the whim of a three year old. And basically, it does.
The only money spent in the stock market that actually goes towards production of wealth are the stocks bought during an IPO.
Completely incorrect. Companies sell stock to raise capital into the market WELL after the IPO. It happens regularly in almost every stock market in the world. Typically they sell treasury stock though there are other permutations. Some types of companies in fact cannot raise funds in the bond market (biotech for example) because they are light on tangible assets so if they couldn't sell stock into the market after the IPO it would be effectively impossible for them to gain financing. Look at any biotech company's balance sheet and you'll find little to no debt but if you read their annual reports you'll find issuance of stock is a regular occurrence even well after the IPO.
The only money retrieved from the stock market that actually comes from production of wealth are dividends and stock buybacks.
Companies are regularly liquidated and money comes out of the market that way too. You also can use stock as collateral for a loan (margin) which takes cash out too. Furthermore your statement is misleading because money is not the only asset of value. Money is an exchange medium but it's only valuable insofar as you can exchange it for other assets, tangible or otherwise. You can use stock to buy companies or even physical assets like real estate or equipment. Furthermore there are other markets for financial instruments besides stock. Bonds, futures, options, even currency. All of these are used for financing and all of them experience speculation. Speculation is not inherently a bad thing. It provides liquidity which is vital to the proper functioning of an economy. Our current financial crisis was essentially a liquidity trap. Frankly, you aren't really considering this very carefully.
The vast majority of activity on the market is strictly sucker A selling a piece of paper to a bigger sucker B, whose only hope of "monetizing" that paper is selling it to an even bigger sucker.
You could say that about almost any asset. Gold, bonds, real estate, pork bellies, cotton, patents... In ANY market the activity is an act of attempting to buy low and sell high. Financial instruments are merely one of many markets - it's just a bit more high profile because other markets depend on the availability of capital.
None of this activity has anything to do with "capital" in terms of wealth production.
Sure it does. You do not need to manufacture a tangible product to create wealth. You obviously can increase wealth through manufacturing but manufacturing is not the only valuable activity in the world. In fact without a lot of other activities, manufacturing as we know it could not occur. You need financing, transport, sales, marketing, warehousing, and information management among other activities to make even the simplest manufacturing feasible. You seriously need to learn about the concept of time value of money because it is the root of all economic activity. The value of any activity is the present value of all future free cash flows. You'll note that producing a tangible asset is not a requirement in that equation.
Man, it's such a wonderful time to be a value style investor. Can I interest you in some more irrational half informed anger?
How long until the market achieves self-awareness? ..And what happens then?
Beware of geeks bearing formulas. --Warren Buffet
http://www.nerdpocalypse.net/chaotic%20systems.html wow, like 'interaction of elements', 'not continuous', dependence on initial conditions hell, you'd think they'd at least have googled 'catastrophe theory' (a subset of chaos--sorry, we prefer the term 'dynamic systems' or 'dynamic simulations'
The problem with minimum wage laws is that they do not set the bottom wage, they merely remove possible wages below it.
If I could work for dollar increments, then I can work for $1/hr or $2/hr or $3/hr and so on and so forth.
When legislation demands a $7/hr minimum, then my options are this:
$0, then $7/hr then $8/hr and so on.
The bottom option of zero dollars never disappears, it just gets more common when min wage laws are enacted.
My name is Lex Luthor and I have started a hedge fund.
It's a $M to get in and you commit to 2 years.
Any takers?