I much prefer Wikipedia, Linux, Google, Github, Twitter, smartphones and other modern wonders to flying cars. Flying cars would be annoying and noisy and dangerous. Whereas having most of the worlds knowledge and people instantly accessible in the palm of my hand is really rather useful.
I hear you. But it makes my head hurt to see Wikipedia listed before Google (I'm a Wikipedian). Much of the crud in Wikipedia articles is an example of "semantic attacks on the Web" just like the fake "news" story on the hacked Twitter account.
But the fact that Wikipedia exists is amazing, right? Imagine if the main reference site on the web was corporate controlled. Actually, I've often wondered: Was it inevitable (due to the nature of the internet) that the primary reference site on the web would be open, free and wiki-style, or are we just incredibly lucky that that happened?
It'd be interesting to see how the future-people interpret the dominance of Wikipedia.
I guess other people made mistakes. MS didn't think the Internet was important early enough; they didn't make Encarta available sensibly; MS was deeply unpopular with a sizable section of the population.
Other people got stuck in a reference library mode - and thus they concentrated on selling DVDs to libraries rather than making access public.
I will, grudgingly[1], admit that Wikipedia is amazing. Probably a Wonder of the World.
[1] I actually hate it, and try to avoid it where possible. If I had the money I'd fork it and create a lower-cruft, more accurate, closed for edits, version. Every article would have a 3 sentence 'elevator pitch' style introduction. Sourcing would be fixed. And the focus would be on "accurate", not "verifiable".
Imagine if a corporate controlled online encyclopedia has become dominant. It would probably be ad supported, with ads targeted to the subject the page covers. It would be so depressing, and make research feel like shopping. Looking up medical conditions would give you a faceful of snake-oil adverts.
For certain (history, science) topics Internet was usable more than 10 years ago. (1998 comes to mind.)
I was a teenager back then and it all happened so gradually I didn't understand until later what I had witnessed. (Then came some dark years of webspam before Google. Web rings were a good way of navigating. : )
Often my Google search leads me to a Wikipedia page, is there a browser extension that takes you to the Wiki page if it exists but otherwise dumps you to Google results? If not someone should write one because it would be convenient.
in chrome at least, start typing "wiki" in the url bar (if it's a common site you go to), hit tab, and then your search term, it'll search and bring you to the wikipedia site. This works for most searchable sites you've recently visited, Amazon, youtube, ebay, etc.
Considering the shape some of my cars have been in when they finally ate it, I wouldn't trust me with a flying car. Think how serious maintenance actually is or running out of gas. With cars you don't have to worry about 2 tons of steel falling on your head. I think it's actually kind of a stupid dream.
Ultralight aviation(1) is available to the masses, but people don't want to replace their cars with them. Why? It is an unsolvable problem, so nobody knows.
> people don't want to replace their cars with them. Why? It is an unsolvable problem
Unsolvable?
You aren't allowed to fly them at night, or over any populated area. They can't have more than a single seat. They have severe weight restrictions that mean you can't take much in them besides yourself. (Note: the previous few sentences describe the US regulations; other jurisdictions are different but all have similar kinds of restriction.) You can only travel to and from places that have a substantial length of runway for takeoff and landing.
Do you really find it difficult to imagine why someone might not find an ultralight aircraft a suitable replacement for their car?
Flying cars will never be accepted in our societies until they completely eliminate the reliance on the user. If they are fully automated from point A to point B, all the time, then I could see us having flying cars eventually. But it could take another few decades at least.
On par, probably still better for the environment. Higher energy use would be troublesome but the ability to trash a bunch of parking lots, roadways, and highways paving over nature would probably be fairly significant.
Certain backward areas have advanced, and various devices always in some way connected with warfare and police espionage have developed, but experiment and invention have largely stopped. -- George Orwell, "Nineteen-Eightyfour"
It's kind of silly. Fake news reports move markets...it happens [1]. This wasn't a crash...it was a 1% drop with an almost immediate recovery. There are definitely problems related to liquidity providers exiting the market too fast and not being subject to enough regulations, but twitter is a great news distribution platform.
Also, why do we want flying cars? Is it just because they're cool or because we want a faster commute and less traffic. Maybe we can get those effects from ground based robotic cars. I think that might not be that far off.
That 1% drop can be exploited and could potentially make an individual or a group of individuals wealthy beyond their dreams until "immediate recovery" takes place. No?
Which is a good thing. If the market panics and goes down quickly, the people that keep their senses are going to make money off the people panicking, and keep it from going down further/bring it back up.
The title is overly pessimistic. We may have wanted flying cars, but the mobile internet is far more empowering/revolutionary than moving cars to the air.
The problem the article highlights will self-correct. Twitter is a good additional news source because it is unfiltered and because of the multiplicity of sources, although we need to adapt to taking news in this form. I wouldn't buy or sell stock, or do anything drastic based on one source. Logic dictates that if the White House were bombed, lots of people on the ground in Washington DC should also be tweeting about it. As we become more savvy, Twitter's influence (the problem according to the OP) will actually be more of an asset. It probably already is.
Actually it isn't dumb. If you had to assign a probability to that tweet being true when you read it, then what would you say? 20%? 40%? So yes, given that there is a real probability that the markets are about to tank, that would effect your valuation instantly.
If it was dumb people wouldn't be making money doing it. If information like that is only accurate 55% of the time it's still better than random (and even random would break even.)
While the author has a point, he is basing it on some improper assumptions. First, a significant attack on the White House, the seat of the Presidency of the United States, the single most powerful political office in the world would not be "trivial". Regardless of who reported the event, it would be a massive event that would send shock waves around the world for both economic and diplomatic reasons. Until the President's safety was verified, would North Korea attempt to exploit chaos and attack South Korea or would Pakistan see an opportunity to invade Kashmir? So, any reliable source of news -- AP, CNN, heck even FoxNews -- stating that the White House has been attacked would send shockwaves through the world.
To me the real observation is how a relatively small act can have a massive impact on the world. The tweet is a small glimpse of the devastation such an attack could have on us. It was a 150 points for a 140 characters, what would live video of the aftermath on CNBC done? It demonstrates the power of asymmetric warfare, and explains a bit of the concern that folks have around "cyber" threats. Hopefully, this incident is a wake up call to Twitter and AP to improve their security.
I am not trying to make improper assumptions as such. I think my point is very similar to yours as in "the real observation is how a relatively small act can have a massive impact on the world".
Imagine if someone hacked CNN or BBC's Twitter account and posted stuff like:
1. North Korea launches nuclear missile targeting US
2. US launches air attack on Iran
I am sure somebody in Washington can authoritatively convince people that these attacks are terrorist attacks (attack on our financial system, designed to cripple American economy etc. etc.), and try to gain public support for laws that will allow greater government control in the working of the Internet (something like TSA for the Internet).
In this case, it’s the influence AP has on markets. If I had published a similar tweet on my personal account, no one would’ve cared, least of all Wall Street.
That’s not to say Twitter as a whole isn’t changing the way traders get their information. A Twitter feed with select authors is being integrated with Bloomberg terminals[1], we learned a couple of weeks a go.
As for high frequency trading, that is certainly a part of the problem, just as online security and sloppy reporting. I’m very much in favor of a financial transaction tax added to every trade to discourage high frequency trading[2].
It's nothing to do with "high frequency" or high volume trading. It's grounded in the fact that firms base their trading strategy on scraped sentiment and macro news. When a delta occurs between reality and signal input all hell breaks loose. All of which has nothing to do with the speed at which trades are submitted and executed.
A financial tax is laughable. That would truly impede market efficiency, a much better approach would be to mandate a minimum holding time of each order in the ELOB say 1000 micros before it can be amended or canceled.
Then won't you get mostly the same thing, at a higher spread? Market makers would be hurt less by that than the investing public... in fact exchanges give fee rebates to market makers precisely to help liquidity.
I think that’s a matter of implementation. In my ideal scenario, market makers would be out of business.
This is hardly a new idea, and it is clear the system needs to be improved. From Wikipedia:
“Keynes was among the first proponents of a securities transaction tax. In 1936 he proposed that a small tax should be levied on dealings on Wall Street, in the United States, where he argued that excessive speculation by uninformed financial traders increased volatility. For Keynes, the key issue was the proportion of 'speculators' in the market, and his concern that, if left unchecked, these types of players would become too dominant”http://en.wikipedia.org/wiki/Financial_transaction_tax#Secur...
I can't see the rational as to why you think that Market makers are a problem.
You could argue that High frequency traders and other hedge funds might be a problem for the market but to lump the market makers in with the high frequency or even prop shop funds i think is being a little harsh to them.
What don't you like about the lowly market makers? Hell the Canadian option market would be a lonely place without them:)
LOL the problem with Keynes is during eras when he's not discredited people do whatever they want including the exact opposite of his ideas yet call it Keynesianism, and during the other eras (like now) when he's completely discredited that trashes his credibility about topics unrelated to his more famous ideas, like your tax idea. So quoting Keynes is pretty much a lose-lose situation regardless of era.
A large part of his failure is assuming his so called "dominant financial speculators" and the government overall or at least the financial regulators would not simply merge, which they've done. Therefore even if his tax was a good idea instead of an inherently dumb one, rather than being implemented correctly it would just be another crony capitalism weapon probably wielded exclusively as a club to pound down the "wrong" people, it would hardly be used to control the dominant financial speculators because they're the guys who purchased the elected officials to begin with!
Please elaborate on your "implementation". The way I see it any implementation of a tax would sorely affect: Resiliency of price discovery at certain quantum's, Depth, Immediacy of execution (whether mechanical or economic) and breadth of liquidity.
Not to mention massive compliance overheads and loss of efficiency in the middle office. Such a tax could in theory only be implemented on lit exchanges! More volume would move to the dark ATS'S/ECN's and Crossing networks. Shit people would just internalize and cross order flows and never actually execute a "trade". Making your solution pointless.
But what I find worrying is exactly that, AP's influence on markets. I find it troubling that a single news organization could wield so much soft power.
With regards to Bloomberg terminals, I am aware of their Twitter integration but again I question their decision. Twitter is not a reliable source of information, particularly for financial markets.
If they go ahead with this, organized criminals and crackers can stage such attacks to make huge profits in minutes - buy low, sell high.
To see the future, look at the past. You've just described the fax and email penny stock spam model which was popular maybe 10-20 years ago. Now no one is dumb enough to take stock advice from emails/faxes especially about penny stocks.
It is extremely likely in the future once/if "everyone knows" twitter (and/or AP) is nothing but spam/scam, then it'll be ignored for financial news.
I wouldn't worry too much about the ecosystem having crooks, they've always been there. I would worry if they're scientifically proven to be getting out of ecologically sound ratios.
>As for high frequency trading, that is certainly a part of the problem, just as online security and sloppy reporting. I’m very much in favor of a financial transaction tax added to every trade to discourage high frequency trading[2].
Wtf, why? High frequency trading doesn't hurt anyone. If the HFT end up making bad trades, they lose money to the people that don't.
The AP has enough credibility to cause problems. Had the hoax story been something that any reporter wouldn't have personally wanted to follow up on, it could have caused more damage.
A hacked Twitter feed is only as good as the entity it represents. Once you have the credibility, it's probably the fastest way to spread the story to people too lazy to check it's validity.
Twitter has a direct impact on the markets. Here is how I know:
There are news services that are dedicated to delivering important information that could affect markets as quickly as possible. I heard the news from one of these services directly before the market seriously dropped. The important question is why the markets reacted the way they did. There seems to be a sentiment that these sorts of moves are catastrophic and avoidable, but the reality is that these are movements reacting to real information from the environment that will affect the future state of economics. When bad news develops, more efficient markets drop faster in anticipation for this current or future event. This means that the information, or the bad event, has been diffused among the population.
With the AP situation, the news of such an extreme terrorist act would surely cause unbalance throughout Western economies; disrupting peace, supply chains, and many companies. This would have a direct impact on equities like the DOW. Within two minutes of the fake tweet, it was reported as being fake and the markets rebounded. In fact, I would guess that the majority of people hurt by this volatility spike were market making or algorithmic traders. They either were directly linked to twitter text feeds, selling on the way down and buying at the top of the retracement; or dump positions put on earlier in the morning. Of course, if the event happened, these traders would have been the winners.
The problem with this current situation is that the high-speed news delivery services spread this fake tweet without any verification (except trust that the AP feed is trust-worthy), and people with direct access to these services were most likely individuals with access to trading accounts, allowing them to drop a variety of assets, most notable the DOW or S&P.
Its important to note the article carefully avoided discussing market conditions on a term longer than about 4 hours (see the graph in the article, etc).
Much like the endlessly rotating wheel of IT fads, the economy rotates around a cycle. Currently "we" (for some definition of "we") are in a pretty intense melt-up era which is at the end of a growth period. Low trading volumes, irrationally almost insanely high equity prices given technical stats, etc. Meltups always precede meltdowns. So the market is strongly prepared to drop and the slightest garbage news causes a momentary drop. This isn't a "story" or a "surprise" its just part of the endless cycle. Rather soon we'll have a real substantial drop, a moderately deep recession, then recovery, growth, etc. Well, at least in the past we've always recovered so we probably will again, or even if main street never recovers (like last time) wall street surely will recover... eventually, at least nominally (aside from inflation).
Now if this happened at a different point in the economic cycle, perhaps near a market low, rest assured nothing interesting would have happened, at least in comparison. That doesn't mean certain unrelated things are suddenly less relevant like twitter social media or AP mainstream media or HFT (What does HFT have to do with this other than being the current bogeyman for the financially intentionally ignorant and/or rabblerousers?)
A tolerably good engineering analogy if you understand the 4-cycle internal combustion engine cycle, sometimes it pings under really intense conditions. That ping doesn't carry relevant moral and ethical considerations of relative shifts in societal importance quite as much as the ping happens because out of the four cycles of a 4-cycle engine, its near the top end of the compression cycle and under intense load/operating conditions. Do the same "stuff" during the intake cycle and you don't get a ping (please no bad analogies to old fashioned carburetor backfires). My car engine pinging cares little about the relative importance of twitter vs AP and a lot more about current conditions WRT the IC 4-cycle.
>How did we end up using such easy to manipulate sources of information to have so much influence in our high frequency trading algorithms?
1) That game is about being fast and first.
2) The finance world loves to try and predict the future from the past.
A technical person likely tempers his/her trust in Twitter with some understanding of it and concludes that false Twitter news is likely/inevitable.
A trader looks for a precedent of market movements caused by false Twitter news and concludes that a lack means a future occurrence is terribly unlikely.
I think flying cars in science fiction of the 50's were a result of the exploding aerospace industry. We went from the very first powered flight in 1903 to the moon in 1969. Airplanes and rockets must have felt very much like computers do now -- subject to boundless, inevitable, mind-bogglingly rapid progress. Flying cars and starships must have seemed like reasonable extrapolations.
On the other hand, one of the things I'm constantly surprised at, when I look at old sci fi, is how very little of the way the internet has changed society was anticipated. Even in stories where they clearly have instant point to point communication and powerful computers, they don't use it like we do. We have instant access to the sum of human knowledge. Forums, chats, wikis, teleconference meetings with arbitrarily bright experts! And it seems to be accelerating.
Sometimes when our internet goes down, I complain about being cut off from the hivemind. I'm only half joking.
This event is even less deserving of being called a "crash" than the so-called "Flash Crash". The markets did not crash; they blipped. Average investors should not have been affected at all.
(Some probably were affected due to stop-loss orders, but those simply should not be used-- index mutual funds are a perfectly good way to gain equities exposure.)
I have one of the best encyclopedias in history at my fingertips. Not only is it free and translated into numerous languages it is also searchable and interlinked. If I want to read about Aaron Burr, or the Second Congo War, or spherical harmonics it takes a fraction of a second to bring up an article. And that's been my habit for the last several years, to look stuff up, to find out facts when curiosity strikes. No doubt many other people have developed the same habit, how has it changed the nature of the world?
Meanwhile, I can discuss topics of endless variety and depth with people from all over the world. I have personal friends who live all over the US and other countries. When a friend of mine went to Australia for business recently the biggest problem in keeping in touch was merely the time difference.
I can loan money to people all over the world through microfinance sites like kiva.org. I can directly support the advancement of the developing world in a very personal, very concrete way.
The internet makes direct support of artists and artisans not just practical but downright advantageous for most creators. Whether it's amazon or a personal webstore or etsy or kickstarter or indiegogo, I can find people whose work I enjoy and I can put money directly in their pockets with much less overhead and intervening red tape than has ever been possible before. And this has led to many artists and creators being able to live off of their work and spend more time on their work who would never have been able to before the internet.
In the next 2 or 3 decades something quite remarkable and unprecedented will happen in our world. Our world will become connected. All of it. Not just the 1-2 billion people who have access to the internet today. Everyone. The developing world, people living in backwater failed states, everyone. From the arid depths of Mali to the mountains of Tajikistan to the hustle and bustle of Mumbai to the slums of Manila, access to computers and to the internet will be nearly universal. This may seem unlikely from the perspective of today but it's right smack on the path of technology and economics, it's pretty much inevitable. This alone will lead to a significant inflection point in the development of the poorest parts of the world, likely accelerating development in ways we can't even imagine today. But it will also lead to a profound change in character of the world, in the information that people have available, etc.
And it will happen not because of the diligent work of NGOs or of UN special offices or of foreign aid. It will happen because things like twitter, facebook, google maps, and so forth created an overall smartphone landscape which was enticing enough to cause the wealthiest people in the world to spend considerable amounts of money buying smartphones. And in the process subsidizing the development of the core technology of the most easily mass-produced and most intuitive to use computing devices in history. Smartphones and tablets are just a handful of chips, a battery, and a screen, they have fewer components than any other computing device and each component is immanently vulnerable to amortization of fixed development and manufacturing costs. The chips and screens of today that go into a several hundred dollar device will over the next few years and decades drop by an order of magnitude or more in cost, putting such devices within the grasp of even the poorest people in the world.
And we are only now at the very earliest stages of this revolution in computing and its impact on the world. This is a monumental event on the scale of the invention of agriculture, it is a turning point in human civilization. And even though it is happening right in front of our eyes many people are incapable of noticing.
I had an interesting conversation yesterday with a co-student of mine. He recently (+/- 8 years ago) found religious faith.
He uses the Internet to spam me with videos about how we didn't land on the moon. And a bunch of weird ones about a gold mountain found in the Euphrates that means the end of the world as we know it is coming soon. So much for technology made possible by the wealthiest.
On the whole I think things like that are still a net positive. One of the consequences of ubiquitous communications is that it makes crazies more visible. On the one hand there is the very real ability for this to give a stronger voice to people with reprehensible or counter-factual beliefs. However, it also exposes these things to the light of day, and it empowers people who wish to put forward counter-arguments just as much.
This isn't a new phenomenon. Literacy and printing have made it possible for reprehensible ideals to gain greater traction than they might have through books such as Mein Kampf. But on the whole I think literature has still had an overwhelmingly positive influence on mankind.
> One of the consequences of ubiquitous communications is that it makes crazies more visible. On the one hand there is the very real ability for this to give a stronger voice to people with reprehensible or counter-factual beliefs. However, it also exposes these things to the light of day, and it empowers people who wish to put forward counter-arguments just as much.
Techies always love Moore's law and all its benefits. However, there's so much more that we need to accomplish. Supersonic commercial flight, cure cancer, commercial robotics (ie. Rosie), colonies on Mars and the outer solar-system, get on a train in San Francisco and arrive in LA an hour later, etc.
Yes, computers and communication are changing rapidily but almost everything else needs a kickstart.
What does this have to do with HFT? If I had someone (man or machine) managing my money and a credible source had reported two explosions at the White House, and there is some chance it could be true, I would like them to incorporate and react to that information and the likely outcomes as quickly as possible. And then if it turns out to be false, I'd like them to react to that as quickly as possible as well.
Which is exactly what happened. No different to a rumour rippling around an old school trading floor and then being discredited. Just faster and more efficient.
I think the point is that the someone should verify the information before reacting on it. Of course you can argue about where in the chain of verification to stop at and how many sources to verify, but I believe that's the basic point. One tweet probably shouldn't be considered the truth for events like the one reported.
No. It's an uncertain Bayesian world. You evaluate on the probabilities. Given a 20% chance that tweet is true, then what is the S&P worth now? Less. So you act. You don't sit around waiting to find out...
Traders are on a hair-trigger - some of them were probably shouting "Sell" down their phones before their eyes had even scanned to the fourth word of the rogue Tweet. You can't really do much to eliminate false-alarms when people are primed for alarm like that. So apart from the unavoidable market-blip, what is there to worry about? Its a one-off event. Lets come back and talk about it if/when major news organisations are getting their Twitters hacked once every six months or something.
Flying cars are ridiculously inefficient and dangerous.
And so what about the tweet? You can not only act on information you are 100% certain about or the markets wouldn't work at all. If using tweets to make predictions wasn't more accurate than not people wouldn't do it or lose money.
Twitter, like email, as a form of communication is basically worthless due to the lack of authentication and strong identity. At least with email there is enough (semi)publicly visible infrastructure that I can verify more of the message flow (SPF, DKIM, IP addresses), even though all of these are a poor proxies for identity.
Perhaps Twitter should add more metadata like originating IP, network, country, device ...
A public/private key system to sign messages might add something. At least it might make people think a little more carefully about protecting those credentials if it meant the onus of responsibility (and blame) for malicious messages fell on them if they fail to do so.
The article is plain wrong. Nowadays is easier to distribute false information but dissemination of false information is part of the human history. You can go further and think about political propaganda that is happening all the time.
I have never been to a webpage with more html pieces showing and hiding as you scroll down the page. I honestly am not even sure what i read. I was too busy closing slide in x or cookie alert y or wishing fancy fixed pos nav z would stop moving around.
Humans do things in exchange for money, the low hanging fruit is gathered before the hard to reach fruit up top. Given a choice to make a million dollars making a website or making a million dollars building automated self-flying cars, rational beings will always choose the former.
It's cost benefit analysis and if you think that can be changed you are delusional.
On June 18th, 74,000 French troops led by Napoleon, sizing up to meet 67,000 British and other European Troops 200 miles NE of Paris.
Nathan Rothschild knowing that information is power stationed his trusted agent named Rothworth near the battlefield. As soon as the battle was over Rothworth quickly returned to London, delivering the news to Rothschild 24 hours ahead of Wellington's courier. A victory by Napoleon would have devastated Britain's financial system. Nathan stationed himself in his usual place next to an ancient pillar in the stock market. Knowing he would be observed he hung his head and began openly to sell huge numbers of British Government Bonds. Believing this to mean that Napoleon must have won, everyone started to sell their British Bonds as well. The bottom fell out of the market. Rothschild had his agents buying up all the hugely devalued bonds.
