Hopped Up Video Game
This isn’t news to those who have been paying any attention to the popularity of ‘quant funds’ and ‘high frequency trading’.
From trader Dan Norcini, via Jim Sinclair’s MineSet:
Now you can see why Goldman Sachs has its panties all in a bind about their little ol’ computer program… that is what investing has boiled down to these days – who can get their order in front of the next guy and get it to the exchange the fastest… As a long time speculator I used to be proud of my profession but I must say that this new breed of fund managers and their quant boxes disgust me because it feeds into the notion that we are nothing but a bunch of low-life parasites who produce nothing useful. At least we once did a lot of analysis and provided liquidity and served as a conduit for commercials looking to offload risk. We have now been reduced to a bunch of leeches sucking money out of the hands of those who actually still believe that the markets serve as a price discovery mechanism. Trading/Investing has morphed into a hopped up video game on steroids.
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Interesting, will proceed to the ZeroHedge & Bloomberg stories on this shortly.
Comment by David — 7/10/2009 @ 2:09 pm
And then people wonder why, so often, the market movements don’t make any sense. Because in reality, they don’t — when a majority of the trading is being done by a bunch of computers chasing each other around.
Comment by BMB — 7/10/2009 @ 2:18 pm