Since this series began last October, we have established that: HFT is the latest mode, i.e., the form of movement, of speculative capital in markets. Like the previous forms such as derivatives and day trading, this form first appears in the most developed markets and then, having grazed the profit opportunities there, simultaneously creates, and …
High Frequency Trading and Flash Crash – Part 9: Concluding Remarks Read More »
You must have heard of Charlie Wilson’s comment that what is good for GM is good for America. Wilson was the CEO of GM in the mid 1950s and there is some question as to what he actually said. But regardless, the statement caught on because it summed up a relation that defined a system. …
Consider this game. You are given $20 to take part in a game of 3 consecutive coin tosses. In each toss, you win $5 if you guess right and lose $5 if you do not. You must leave the game with at least $10. Here is the lattice of the game’s possible outcomes: If your …
High Frequency Trading and Flash Crash – Part 8: How Does Flash Crash Come About? Read More »
Last November I wrote how some unscrupulous companies – many of them quite large – had expropriated Apple’s business model in a perverse way. Apple charges a small amount, say $2, for an app but sells it to millions of users. Both the company and the app developer benefit. In the perverse version of this …
Why would you stay up all night to see the sunrise? Every day, sun rises at an exact moment. You only have to get up a minute before the designated time to see it; no need for staying up all night. Why would you then strain yourself to analyze the utterances of a central banker …
The Financial Times headline (April 25) spoke of “PepsiCo anger over Fed inflation guide”. Wonder what possible beef a cola maker would have with the Fed? Let’s read: PepsiCo’s chief financial officer has criticized US policymakers’ focus on “core” inflation, arguing that it overlooks the impact of rising prices on consumer spending power. The Federal …
The expression something “catching up” with you or “creeping up on you” are the people’s way of referring to a phenomenon that you notice not because you are particularly perceptive but because the phenomenon forces itself upon you; you could be dumb as a mule and yet, you will notice it because, like the impact …
A Philosophical Note on an Inauspicious Anniversary Read More »
You all know of the “Elephant Man”. The society ladies and gentlemen of the London Victorian era discovered a man with severe physical deformities and turned him into the object and evidence of their compassion. Their newspapers made sure that the rabbles were not kept in the dark about the magnanimity of the upper classes. …
My Contribution to the Discourse on the U.S. National Debt Reduction Read More »
In Masnavi, Rumi tells the story of a man with his donkey who checks into a mid-way inn. In the evening, walking around the inn, the traveler comes across a group in a celebratory mood and joins them. Unbeknownst to him, they are penniless students looking for ways to finance their party. Upon learning of …
On a European train I caught up with the newspapers I had been carrying from New York. This was in the Financial Times of March 23: Alan Greenspan, former chairman of the Federal Reserve, argues that the decline in the share of liquid cash flow that US companies choose to allocate to illiquid capital investment …