This is interesting as you hear from software developers and mathematicians and their ground roots and how it began. One former programmer talks about his job with a bank that is no longer around and remains anonymous. He has a hard time wanting to go back and with his isolated world it was hard for him to see the overall destruction of what was happening.
You have to be wired, alert all the time and you “can’t be wrong” Mike Osinski states, and the nightmares. The stress got to the point to where some did not know what day of the week it was. Banking has completely lost it’s touch on what they are here for. It’s the algorithms that move money around, here it from someone besides me:)
Change the math to make it look less risky. Models can be worked to hide risk. Once you have too much mathematics it’s hard to implement. Remember the words of Jamie Dimon? He didn’t know. Economists think they are scientists one states and one of the Quants says it’s nothing but theories and nonsense. I have often said that economists should spend a bit more time with mathematicians. Scientific creativity is becoming financial creativity. This makes you stop and think about the healthcare business on the open market for sure. What models are quants creating for the “human” business as relates to financials? Matthew Goldstein was one of the first to warn about the danger of high frequency trading. Hedge Funds get their black box as close s they can to the exchange, co-loading as it is sometimes called. The black box is nothing but a group of algorithms.
Value is diminishing and the “price” of the stock is taking over. This is why events like this are important today.
NIH And Milken Institute Announce “Celebration of Science Day” Saturday September 8, 2012 Recognizing Research and Development & Making a Difference
What companies do and make any more is not even important any longer for investors. News reading algorithms impact the markets. I might add here that is is why there is a huge focus on bringing back “value” to biotech and research as that’s what cures and finds treatments and why the NIH needs to get seriously involved as after you listen to this vide and read my few comments here…is this the same ball park where lifesaving research and technology belongs…in a place (stock markets) where nobody cares “about what the company is doing”? Think about that for a few moments…
Banking is just about gambling on numbers today in the words of one the participants. Again this will tell you about the power of the algorithms and the machines. Will the NYSE become a museum one day? Again nice to see the former programmer out fishing and enjoying himself and talking about the pressure of writing software too, it’s getting worse and what in the world is in store for the quants when complexities don’t agree with their math to make it happen any longer? The programmer tells the truth that in software you can do something about everything, which is true and where we come back to algorithms written for “desired” results or “accurate” results and are the 2 the same..they should be but not always and that’s the problem.
There’s a lot of “Algo Duping” going on out there and sadly it’s some of the officials we elect and those appointed to key offices that have been totally sucked in. I have quite a bit of additional information on this topic at the link below from a few days ago.
The Rise (And Need) for Human – Computer Cooperation- A Good Thing and a Challenge for a Society, Governments and Companies That Have Been “Algo Duped” for Way Too Long (Video)
After you watch this then you can understand a little better on why we are under the Attack of the Killer Algorithms in one way or another and how great wealth for a few is leading to a society of data chasers for the middle and other classes to keep the wealth rolling for those few.
Attack of the Killer Algorithms–Digest & Links for All Chapters–on How Math and Crafty Formulas Today Running on Servers 24/7 Make Life Impacting Decisions About You
A video from Charlie Siefe at NYU…Algo Duping! If it has a formula then it must be right, wrong:) Quantative math statements are held in high regard even if everything composing it is bogus. We use math to fool ourselves and to dress up lies. You don’t have to look far…just look at the newspapers he says…Once someone uses a formula it becomes national news to get media attention…
If you need more, then watch Kevin Slavin talk about how algorithms shape our life and yes he talks about the black boxes and features some charts from Nanex and how everything is not as it seems…there are 2000 physicists on Wall Street today. Those who control the code control the world and the money and the middle class has become data chasers that works on their own dime to fix all the data flaws created by big business.
There’s even more at another page I call “The AlgoDuping/Killer Algorithm page with some additional links as healthcare and finance is joined at the hip. BD