Tuesday, February 7, 2012

Skynet Begins to Learn at a Geometric Rate

Nanex Research has put together this excellent .gif to illustrate the rise of the algos driving HFT.  (h/t Mish)

Like all geometric series, this one starts slow, but it ends with a bang (or will it actually be a crash?).

I know that humans wrote the code, but do they really know what all those algos are going to do when the humans interfacing with the market start relentlessly driving the price "signals" down, down, down? Can you say Flash Crash from Hell, boys and girls?

The Terminator: The Skynet Funding Bill is passed. The system goes on-line August 4th, 1997. Human decisions are removed from strategic defense. Skynet begins to learn at a geometric rate. It becomes self-aware at 2:14 a.m. Eastern time, August 29th. In a panic, they try to pull the plug.
Sarah Connor: Skynet fights back...

Remain calm.  All is well.

1 comment:

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