Just leaving room for disagreement on the value of HFT.  It would seem to add 
nothing but more volatility to the market and make small events more extreme.  
There are also big risks of systems making convention wisdom decisions in 
unconventional situations.  Can someone pull the plug fast enough if some 
unpredicted event makes the conventional wisdom wrong?  The article in question 
uses an example like "oil price goes up, airline stocks go down".  This sounds 
true enough but how many assumptions like this exist that might not ALWAYS be 
true.  Is it fair to crater the airline industry or any other one because some 
convention like that causes a huge fast momentum swing.  I guess the danger is 
that all the assumptions are those of a human but done at the speed of 
computing without natures built in safety catch of time to reconsider the 
assumption before pulling the trigger.  We worry greatly over the software that 
controls aircraft and nuclear power plants but this software has a much greater 
potential for worldwide disaster and being a competitive market is probably 
changed many, many times more often in a less controlled way.  You have to 
decide whether a global market meltdown and an aircraft crash can be compared 
but both are bad events.

Again, this is a risk / reward situation that the markets and regulators need 
to deal with.  I am normally not a big advocate for government control of 
anything but clearly there is a need for regulating an industry that has again 
and again done some very risky things that have very tangible effects on the 
world economy.  When the speed limit of light becomes a major worry for your 
system, it peaks my radar as being a system that is running "on the edge".

We are getting a bit off the NANOG subject which would be the network 
implications of this so I will curtail the general discussing of HFT.

Steve

-----Original Message-----
From: John Levine [mailto:jo...@iecc.com] 
Sent: Wednesday, August 08, 2012 10:54 AM
To: nanog@nanog.org
Cc: Naslund, Steve
Subject: Re: raging bulls

>Here is another thought.  Many people think that the rapid computer 
>trading does not really add any value to the market in any case since 
>there is no long term investment.

It clearly doesn't.  A proposal that's been kicking around for a while is to 
clear all trades once a second, so everyone has plenty of time to get them in 
no matter where they are.  This has no chance of going anywhere, of course, 
until there's enough software disasters to provide political pushback against 
the leeches doing high speed trading.

There is a new data center in Keflavik, Iceland.  They advertise all of its 
fabulous green characteristics, e.g., power is from geothermal, and A/C is by 
opening the window, but it also happens to be closer to New York than anywhere 
in Europe, and closer to London than anywhere in North America, with good cable 
connections to both.

R's,
John

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