I promised myself that I would not write about this, but it is too much to stop myself. Market Trading relies on computer programming today. The idiot machines, though, cannot detect Trends, only marginal movements. This means that they can only be taught to go up with the market, or down with the market. They find it very hard to define previous Sales data. Everyone involved with the machines throw up their hands when anyone suggests that a program Fix be introduced to rein in that horse, when it starts to buck. My Solution would be an Override instruction stopping all Trading until there has been human intervention to restart the sequence. Every exchange will likely order their own limit of Gain or Drop, but I would apply a 1.9% of Stock price from the Top of the previous day, with human intervention only being able to reset at the Top of the current day. After the two limits have been reached, then all Trading becomes human activity. All of this would mean that humans would have to be present, in order to enjoy any Movement in the markets; Traders and Investors might have to go back to working a 40 hour Week again!
There is a man who believes fairness extends beyond personal association; so he has yet to admit that machines were designed to eliminate such impractical outcomes which might be associated with fairness. By the way, Ernst Fehr does excellent work. Read the article and ask How the introduction of computers cancels the very effect which he describes. The electronic calculators reduce humanity to digital units of common uniformity, then propels equal weight impacts on the digital units to obtain the desired advantage as defined by their Programmers. The entire purpose of computer programming is to instill herd behavior in any chosen population. We are back to the Marxist doctrine of Action, Reaction, and Synthesis. We wind up back at the inhuman propulsion of Mankind to serve some set of Masters. The hunger for megalomania only resurfaces under different guise.
I will leave the Reader with this Post, which takes some degree of Skill simply to understand it. Barry Ritholtz probably has a better understanding of computers, than of market fundamentals; but such is the nature of the present world. I do know that there is a claim that some 16 billion E-mini S&P Futures were sold in under two minutes yesterday. The computers are now setting the Trends, and understand those Trends even less than We do. One can ask if the World can continue to function with this mess! I do advise to repurchase those Futures which will be on the market at great premium less than originally sold. Who knows–You might get lucky; the computers are roiling for another great shift. lgl