Sapere Aude
Tag: markets
how soros forced the pound in 1992
The 1992 crisis came to a head on Friday September 9, when currency speculators forced the devaluation of the Italian lira. By the following Tuesday, Britain was facing the same fate. In this excerpt from More Money Than God, his new history of hedge funds, Sebastian Mallaby tells the story of the crisis from inside the cockpit of George Soros’s Quantum Fund.
These systems are so fast they can outsmart or outrun other investors, humans and computers alike.
why is the nyt so hopelessly naive? it is quite embarrassing.
“There’s this whole world below 650 milliseconds. It’s like landing on another planet. It’s an enormous part of the market which is out of human reach. We have a glimpse of the kind of ecology that’s going on down there.”
shades of the mundane singularity. the goal of these clowns is to create arbitrage opportunities by spamming the system with requests.
A single mysterious computer program that placed orders — and then subsequently canceled them — made up 4% of all quote traffic in the US stock market last week.
the reason HFT compete on latency is because they can’t compete on price: the minimal price increment is $0.01 and it is illegal to go lower. thus we waste a lot of people on reducing latencies. we should remove the minimal price increment instead.
2013-06-04: Why is there all this bs with “business days” when you do any bank transactions? Are the computers only working 9-5? Why is it 2013 and we still acquiesce to ridiculous notions like bank transactions that take days instead of seconds? The banksters know how to do it for their HFT buddies but not for the real economy?
The perception of many is that financial markets are parasitic institutions that feed off the blood, sweat, and tears of the rest of us. The reality is far different. This book breaks free of traditional ideological arguments of the Right and Left and points to a new way of understanding and spreading the extraordinary wealth-generating capabilities of capitalism.
They suggest that the government should give green cards to all foreigners who come to America to study science, technology, engineering or maths. Some are more innovative. Exchange-traded investment funds, which have gone from nothing 10 years ago to a trillion-$ industry today, leave promising new companies vulnerable to the fickleness of high-frequency traders: so why not let them exclude themselves from such funds’ baskets of shares? SOX is reducing the supply of new companies in the name of protecting investors: so why not let smaller firms opt out of SOX so long as shareholders are duly warned? The authors also argue that university technology offices should lose their monopolies, giving professors more freedom to exploit their innovations.
Players start with 500m econos each. One player doubles as banker.
Players move round by throwing 4 coins and progressing as many squares as they throw heads. If a player throws 4 heads, he moves forward 4 spaces and has another turn; if he throws 4 tails, he throws again. When a player lands on a + square, he collects money from the bank; equally, when he lands on a minus square, he pays the bank.
The aim is to be the last solvent player. In order to achieve this, players try to eliminate the competition. Risk cards encourage players to pick on each other.
Players who cannot pay their fines may borrow from each other at any rate they care to settle on—for instance, 100% interest within 3 turns. They should negotiate with the other players to get the best rate possible. Players who cannot borrow must either go into Chapter 11 or be taken over.
Players may conceal their assets from each other.
Retailers aren’t going to be able to support artificially high prices based on information asymmetry anymore.
Destroy the system’s network connectivity. CDS ensure that failure will spread through internetworked contracts. Nuke CDS derivatives (~$60 trillion) by making them illegal. Destroy parts of the network in order to save the remainder.
the total liabilities of Deutsche Bank amount to around 2 trillion euro, or over 80% of the GDP of Germany. The total liabilities of Barclays of around 1.3 trillion pounds surpasses Britain’s GDP.
Modest incompetence is insufficient—if you merely destroy your own company, you won’t get rescued. You have to threaten to bring down the entire global financial system.
what is the likelihood of the US defaulting on its debt?
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Gregor J. Rothfuss 