Algortihmic regulation

“As Silicon Valley keeps corrupting our language with its endless glorification of disruption and efficiency – concepts at odds with the vocabulary of democracy – our ability to question the “how” of politics is weakened. Silicon Valley’s default answer to the how of politics is what I call solutionism: problems are to be dealt with via apps, sensors, and feedback loops – all provided by startups. Earlier this year Google’s Eric Schmidt even promised that startups would provide the solution to the problem of economic inequality: the latter, it seems, can also be “disrupted”. And where the innovators and the disruptors lead, the bureaucrats follow.

The intelligence services embraced solutionism before other government agencies. Thus, they reduced the topic of terrorism from a subject that had some connection to history and foreign policy to an informational problem of identifying emerging terrorist threats via constant surveillance. They urged citizens to accept that instability is part of the game, that its root causes are neither traceable nor reparable, that the threat can only be pre-empted by out-innovating and out-surveilling the enemy with better communications.”

[...]

“The numerous possibilities that tracking devices offer to health and insurance industries are not lost on O’Reilly. “You know the way that advertising turned out to be the native business model for the internet?” he wondered at a recent conference. “I think that insurance is going to be the native business model for the internet of things.” Things do seem to be heading that way: in June, Microsoft struck a deal with American Family Insurance, the eighth-largest home insurer in the US, in which both companies will fund startups that want to put sensors into smart homes and smart cars for the purposes of “proactive protection”.”

[...]

“In shifting the focus of regulation from reining in institutional and corporate malfeasance to perpetual electronic guidance of individuals, algorithmic regulation offers us a good-old technocratic utopia of politics without politics. Disagreement and conflict, under this model, are seen as unfortunate byproducts of the analog era – to be solved through data collection – and not as inevitable results of economic or ideological conflicts.”

(source accessed 17.07.2014)

Bacteria discovered that exist on pure energy (“eating” electrons)

Microbiologists based in California have discovered bacteria that survive by eating pure electrons rather than food, bringing an entirely new method of existence to awareness and raising questions about possibilities for alien life.

The ‘electric bacteria’ – as they have been dubbed by the team that discovered them – take energy from rocks and metal by feasting directly on their electrons. The hair-like filaments the bacteria produce carry electrons between the cells and their environment.

(source accessed 19.07.2014)

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Fined for failing to protect privacy

The Securities and Exchange Commission today charged Boston-based dark pool operator eBX LLC with failing to protect the confidential trading information of its subscribers and failing to disclose to all subscribers that it allowed an outside firm to use their confidential trading information.

“Dark pools are dark for a reason: buyers and sellers expect confidentiality of their trading information,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Many eBX subscribers didn’t get the benefit of that bargain – they were unaware that another order routing system was given exclusive access to trading information that it used for its own benefit.”

(source accessed 14.07.2014)

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Algorithmic trading, DMA, autonomous market-making and HFT are here to stay

The Market in Numbers

  • US Equities volumes: 5 and 10 billion shares per day
  • 1.2 – 2.5 Trillion shares per year
  • Annual volume: USD 30 – 70 trillion
  • At least 30% of the volume is algorithmic: 360 a 750 billion shares/year
  • Typical large “sell side’’ broker trades between 1 and 5 USD Tri per year using algos
  • Each day, between 15,000 and 3,000 orders are processed
  • An algorithmic execution strategy can be divided into 500 – 1,000 small daughter orders

(source accessed 14.07.2014)

Penny-stock shares jumped in value by more than 25,000 percent based on twitter

Cynk is an apparently non-existent social media company whose penny-stock shares jumped in value by more than 25,000 percent—a better return, as Business Insider notes, than someone who bought Apple stock in 1980 would see if they were still holding those shares. During the heyday of 1990s internet stock speculation, curmudgeons could rest assured that human-powered greed was fueling runs on IPOs for companies that had never made a cent. But today, with the rise of high-frequency trading, it’s understandable to wonder whether Cynk was just some kind of algorithmic hiccup. Maybe Wall Street’s computers are just punking us.

“As we all know from both social media and the stock market, however, humans are stubbornly prone to cognitive biases and emotion-driven rationalizations that lead to bad choices, like buying shares of Cynk. The advantage of using computers as an aid to decision-making is their ability not to hear any of that noise—noise that introducing social media and other unstructured data as new variables into, say, high-frequency trading systems could cause to increase. Paradoxically, the more Wall Street’s machines become like humans, the more prone they may be to making the same kinds of mistakes humans do. The next tech bubble might not be driven by human stupidity or greed; it might be created by the tech itself.”

(source accessed 13.07.2014)