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Algorithmic Trading Rapidly Replacing Need For Humans

2011-09-10 11:32:13

I've never been convinced that HFT is anything but a scam to make institutional

investors more money without doing more research or making more socially

responsible investment decisions.

The company worth truly investing in, in the sense that you hope it survives

and hope it continues to grow as opposed to only making you lots of money, is

the one that will treat the environment, their employees, their supply chain,

and their customers with respect while paying investors and owners a

respectable return.

HFT algorithms don't give a fuck about any of that, exactly like the

stereotypical Wall Street broker doesn't care about any of that; in fact HFT

algorithms were written when brokers realized they could make more money in

corrupting and managing young mathematicians than in doing their own jobs. HFT

just further emphasizes empty, short-term speculation without regard to the

product sold, the behavior of the company, or the future potential of the

company. It enables the irresponsible greed of people who just want to make a

dollar in the next day to become the irresponsible greed of people who just

want to make a dollar in the next 0.0000000001 seconds.

If investment decisions are better made by computer program than by human

investors, what justification is left for private ownership of capital? And

what's the argument against planned economics?

Can we have another look at the idea of democratically deciding upon our social

priorities?

Benefits: More money transferred to the very wealthiest individuals as traders

who can't afford HFT servers (physically as close to the trading floor as

possible - at these speeds, light is too damn slow) are at a severe

disadvantage.

Severe risks: Potential for total economic collapse to take place in the blink

of an eye.

I punch those numbers into my calculator and it makes a frownie face.