I read the Business section of the NYT every once and awhile. Of most interest to me are the articles on technology, business, and business-technology. This one caught my eye in last Sunday’s paper. It’s about “High Frequency Trading,” which was explained here at this NYT site.
The political moral relates to the unfair advantage by which big technology allows rich people to game up economic life, and the extreme volatility exposing us all to the kinds of risk that rich people have figured out how to hedge. Aesthetically, what wows me is the appearance of speed in contemporary life, the power of computing to accelerate the transmission of massive amounts of data in the blink of an eye.
This from the NYT:
Trading mostly with their owners’ money, they scoop up hundreds or thousands of shares in one transaction, only to offload them less than a second later before buying more. They can move millions of shares around in minutes, earning a tenth of a penny off each share.
High-frequency traders often confound other investors by issuing and then canceling orders almost simultaneously. Loopholes in market rules give high-speed investors an early glance at how others are trading. And their computers can essentially bully slower investors into giving up profits — and then disappear before anyone even knows they were there.
The article that drew my attention first was about Sal Arnak and Joseph Saluzzi, two critics of HFT who “have proposed solutions that might seem simple to the uninitiated but look radical to H.F.T. insiders. For instance, the two want to require H.F.T. firms to honor the prices they offer for a stock for at least 50 milliseconds — less than a wink of an eye, but eons in high-frequency time.”
Yes, 50 milliseconds! Critics of the industry want the value of a stock to last for 50 milliseconds. Mind-boggling. I’m not sure I can even begin to interpret what this might mean about the value of things, economic and moral, in the age of big money and big tech and big data. And then there is this theological query. What does it mean that our most mundane economic actions assume cosmic dimension as they approach the speed of light? All seriousness aside, this is new territory to which none of our old philosophical and religious concepts and systems are probably adequate. It’s one thing to moralize about the need to slow things down, to say, 50 milliseconds. I just don’t see how it happens.
