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Wall Street – Faster or Better?

// Posted by on 06/04/2015 (7:32 PM)

When I read the article Raging Bulls: How Wall Street Got Addicted To Light-Speed Trading I immediately had a mental image of the stock market trading floor. Men and women rushing around multi-tasking-talking on the phone, emailing, talking to colleagues… Read more

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When I read the article Raging Bulls: How Wall Street Got Addicted To Light-Speed Trading I immediately had a mental image of the stock market trading floor. Men and women rushing around multi-tasking-talking on the phone, emailing, talking to colleagues and all the while watching the numbers and multiple monitors ever so closely. It’s interesting that the article begins talking about “flash failures” that are occurring with increasing frequency as traders want more and they want more…faster!

Time is of the essence when trading on Wall Street or any other trading floor location. The goal is to make the trade as quickly as possible and to send and receive data at warp speed. But, is the infrastructure that is currently in place sophisticated enough to provide what traders are seeking? Apparently not according to investors who are looking to make lots of money in short periods of time. Will the need for speed increase errors? Or will it turn the ordinary trader in to a superman or wonder woman. People who are forever striving to increase what they and the market technology can produce. I’m reminded of the movie Wall Street with Michael Douglas and the cut throat environment among the employees. Who would make the next sale and for how much?

As we read, “faster and faster turn the wheels of finance, increasing the risk they will spin our of control.” We read that machines can operate faster than humans and “intervene.” What does this mean for the market trader? It means competition and probably hasty decisions with non-profitable end results. If a machine can make investment decisions based on data faster than an individual can make the same decision based on assessment of data and the state of the economy, where does that leave the workforce? Will it one day be obsolete or at the worse, decreased tremendously? If market trends can be analyzed by computers, who needs employees, right? Well, not so fast…servers and fiber optic cables are privy to hacking and failure for technological reasons. Machines can’t replace people in all aspects of market trading. People need to build and install hardware and cables to make the process function. But is it ever fast enough? That’s the question.

Data travels as lightening speed from one machine to another and from one geographic area to another. We read that often data is outdated by the time it arrives to its destination. This “need for speed” is why Wall Street is addicted to high-speed trading. There will always be faster competition coming along to replace existing networks. Companies are developing new and better fiber optic cables to reach from point “a” to point “b.” The field is driven by competition and sales. Manufacturers of cable are constantly needing to upgrade to stay marketable. Algorithms are written by people and they are changing as fast as the market is trading. This cycle of faster and faster – how does it affect the overall economy? Well, first, a higher volume of trading has to take place to make the same amount of money as the technology and data speeds increase. People are working harder and harder for the same return. Trades are executed to the thousandth of a cent to be competitive – not by traders but by computers. Things are happening so quickly on the computers that the average trader can’t keep up.

The company BATS who offered an initial public offering of its stock, closed down other companies because of a glitch in the system just seconds after trading opened. Because of a software glitch, trades were frozen and this affected other companies who operated on the same server.  Perhaps this was a true “glitch” in the system but it also presents opportunity for bad behavior by someone who might not want an IPO to be successful. Like anything else, there is the good and the bad. Stock prices are inevitably going to be affected by new technologies and financial activity. And, greed is going to be present in all areas of the market.

I can’t pretend that I understand how the stock market functions or that I really want to, but I do understand competition and stability. Competition is high in the stock market among traders and stability is low. Low stability, I think is due to the fast moving parts and the desire to move even faster. Will it ever be fast enough? It will be interesting to see how data driven functions will affect the stock market in years to come. If we’re at light-speed trading today, what could it look like tomorrow?!

Watch this clip of Gordon Gekko (Michael Douglas) talking about greed in the market and why it is “good.” From the movie Wall Street…

https://www.youtube.com/watch?v=PF_iorX_MAw

 


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Occupy Wall Street

// Posted by on 02/23/2014 (5:35 PM)

This week we read an article by Jeff Sharlet called, “Inside Occupy Wall Street.” Sharlet shed some light on what Occupy Wall Street (OWS) really is and the enormous impact it has made around the world. I was never educated… Read more

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This week we read an article by Jeff Sharlet called, “Inside Occupy Wall Street.” Sharlet shed some light on what Occupy Wall Street (OWS) really is and the enormous impact it has made around the world. I was never educated or award of the magnitude of OWS and the amount of people involved in the movement. At first after reading the article and developing my knowledge on the situation, it is still difficult for me to really understand the whole purpose of the protest. Why are thousands of people camping out in this park for months trying to get Wall Street’s attention? Do they want business professionals to walk out of their building and hand these people jobs? I just did not see the end goal all of these protesters were aiming for. However after the class discussion, I am starting to put the pieces of the puzzle together a little more now. I understand that all they want is for them, “the 99%” to have a level playing field with the 1%, Wall Street businessmen and women. However, is that a realistic goal, to make everyone equal? How will the economy appreciate and grow overtime if no one is trying to work his or her way up the professional latter?

The first sentence of Sharlet’s article also blew my mind, as I was completely unaware that this global/universal movement came from one simple Tweet and hashtag, #occupywallstreet. It is events like this that truly show the world how incredibly powerful technology is becoming. Social media has changed the world forever. Would OWS been as big if people tried to form it in the 40s? There is no way. People around the world would not have heard about this protest without the type of technology we have today. It is due to things like Twitter, Facebook, online newspapers, etc, that these events get the media’s attention all throughout the world. With the knowledge of the movement through technology, more and more people began showing up to the park to help protest. Technology allowed Occupy Wall Street to reach the magnitude it did. Without it, the movement would not be talked about today and would have sizzled out long ago. It would not have become such a global sensation the way it did. Technology, with the help of social media allowed for all of these people to join together and be part of something larger than themselves. The dedication from these people, I will say, impresses me. I cannot believe some stayed for weeks, even months at a time to prove to the world things need to change. The efforts from these people are incredible.

After reading Sharlet’s piece and again seeing the powerful of technology and how persuasive it can truly be, scares me. Anyone has the capabilities to tweet whatever they want and develop millions of followers. This is exactly what happened when a male teenager posted on his Facebook page that he had a good idea to raid a mall and begin shoplifting and hurting people. The post received many comments and likes. Many of his friends and their friends began joining the group and were eager to help in his horrific act. Without the power of Facebook and the abilities it has to reach millions of people, this would never have happened. This is why when technology and social media falls into the hands of the wrong people it can become incredibly scary and harmful. But is there anyway of stopping it?


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Occupy Earth

// Posted by on 03/25/2013 (1:51 AM)

At first glance, the Occupy Wall Street movement can appear to be an group of angry individuals who were “organized’ under a vague focal point. However, the sheer fact that the Occupy movement’s ideas spread around the world means… Read more

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At first glance, the Occupy Wall Street movement can appear to be an group of angry individuals who were “organized’ under a vague focal point. However, the sheer fact that the Occupy movement’s ideas spread around the world means that this was no small, localized event. Social media helped to unify like-minded individuals, and an outpouring of support “through video, photos, text messages, audio and other messaging using Facebook, Twitter, Tumblr and other online services” gave the movement “legitimacy.” In order for the movement to build up steam, it needed to become a literal movement, not just a figurative one.

According to the Wall Street Journal in 2011, the spread of the Occupy movement seemed almost “organic.” Copycat organizers studied the New York protests and created their own mini-movements in cities like Chicago and Los Angeles, and they planned these protests via Facebook, Twitter, and other networking websites. This method is a 21st century phenomenon, for protesters are now able to share their grievances and complaints with other individuals instantly through the Internet and gather their own followings. Another interesting feature of the Occupy movement’s spread is the source of the spread. When studying the Vietnam War’s protest movement, some of the biggest and most well-known criticism came from actors, musicians, and artists. Americans latched onto the feelings shared by people they recognized in the news like John Lennon, Allen Ginsberg, and Frank O’Hara, and these celebrities gave the protests a strong backbone.

With Occupy Wall Street, however, the backbone was formed by (mostly young and jobless) Americans who were fed up with corporations paying executives extremely high wages, preventing workers from negotiating better and safer working conditions, etc. Celebrities heard about the movement in the news and then had to decide whether or not they wanted to side with the folks in New York. Some, like musician Tom Morello, Russell Simmons, Alec Baldwin, and Yoko Ono pledged their support (ironic, because they are not members of the “99%”). Simply put, for one of the first times in history, ordinary Americans were taking matters into their own hands and single-handedly forming a movement without any kind of leader or figurehead. They were, collectively, their own figurehead.

This may be one of the biggest reasons why the Occupy Wall Street movement spread like it did. Because the base was made up of the so-called 99%, almost all Americans were included in their movement. They were spreading ideas that millions of people understood and were against, and this is what unified people form around the world. It may have started out as a relatively small gathering in a park in New York City, but the ideas the protestors shared were significant enough to reverberate across the globe.

Here’s a brief video showing various movie stars being asked about their thoughts on the movement. What do you think? Should they not be allowed to “support” the Occupy Wall Street movement because of their “1%” standing, or are their voices needed to give legitimacy to the protester’s cause? I personally don’t think the protesters need any big names or stars to support the movement because, in many ways, that sort of thing can actually undermine what the movement is standing for.

Occupy


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