… And the award for the most ridiculous, most paranoid-sounding column about the dangers of High-Frequency Trading goes to Paul B. Farell of Marketwatch, who warns that trading robots have achieved “The Singularity” and absolutely cannot be beaten by retail investors.
Last year Wall Street banks were virtually insolvent. Taxpayers stimulated them back from the dead. Now, thanks to the proliferation of HFT-Quants, Wall Street’s again racing at hyperspeed, gambling with the money it conned from taxpayers, using it to skim more from clueless investors. First the Fed and Treasury, now Wall Street’s “Too-Stupid-To-Fail” banks are stealing from Main Street’s “Too-Dumb-To-Stop-Trading” investors.
Wall Street’s greed machine never stops, never. So who are these new predators prowling the markets? How do they win so big? And where is their “Singularity?”
Our imagery begins with Ray Kurzweil. Inventor. Entrepreneur. Futurist. An artificial-Intelligence visionary who thinks at hyperspeed, like the HFT-Quants. Kurzweil predicted this new reality in his best-sellers: “The Singularity is Near” and “The Age of Spiritual Machines: When Computers Exceed Human Intelligence.”
Just a few years ago Kurzweil’s “Near” wasn’t until 2045, when the human race “breaks the shackles of its genetic legacy and achieves inconceivable heights of intelligence, material progress and longevity.” That was his law of “accelerating returns” where intellectual progress rockets into the future exponentially faster than Moore’s Law.
What’s too bad, is that if you take out the self-righteousness (“money it conned from taxpayers!”) and the paranoia (“breaks the shackles of its genetic legacy”) the column actually makes a good point, which is that most of the time, daytrading is a fool’s game that shouldn’t be tried at home.
Of course, that’s always been the case. Amateur, at-home investors have always traded badly, and nothing about the HFT makes this new. If anything, these machines are a net-positive if they reinforce the idea that there will never be an even playing field. But nobody wants to hear that, and it doesn’t make for a good rant.
Perhaps there’s money to be made in Robot Insurance?