Computer software to blame for current crisis
THE BLAME GAME has been a popular pastime in the last few months, still one group is yet to have the boney finger pointed at them – computer software analysts.
The deeper we begin to look, the more this group of geeks seems to be where the problem lies and although what they do is vastly complex the reason it is probably their fault isn’t.
Since the 1980s huge amounts of stocks and shares have been traded automatically by computers, those who built the software to make this happen accounting for as much as 40 percent of all trades on the London Stock Exchange in 2006.
The quantities analysts (quants) who write the algorithms which drive the software are generally maths or physics graduates who calculate the risks of deals and derivatives pricing, which involves putting a figure on trades that in effect bet on other trades.
Yes, this is enormously complicated, even for these boffins to comprehend – if indeed they did comprehend, which looking back now, appears they didn’t.
Richard Dooling wrote in the New York Times that, "Somehow the genius quants - the best and brightest geeks Wall Street firms could buy - fed $1 trillion in subprime mortgage debt into their supercomputers, added some derivatives, massaged the arrangements with computer algorithms and - poof! - created $62 trillion in imaginary wealth."
The algorithms were based on seriously flawed risk assessments which concentrated on the present and not the future – what would happen if a person's ability to pay simply stopped?
Well, you’re looking at it.
George Dyson wrote in Edge last week, "The problem starts, as the current crisis demonstrates, when unregulated replication is applied to money itself. Highly complex computer-generated financial instruments (known as derivatives) are being produced, not from natural factors of production or other goods, but purely from other financial instruments."
The financial markets seem to be more automated and machine run than ever before. These computers are fed by the most complex lines of code ever and producing arrangements so complex only machines can make them.
So, the conclusion is, we are suffering a financial crisis which lies in the fault of a human, yet we are now at the mercy of a machine. µ
L'Inq
Guardian
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It's the people behind the software. 

If you let them create a system that lets people make money (as in create money from nothing) they are going to do it. If computers let them do it better, faster that's what they will use. It's like saying computer software is to blame for click fraud.


1) the computer models were built by geeks using briefs supplied by the *cough, financial 'experts' (FE)

2) the algorithms used were written by geeks that included variables that were specified by the FEs.

3) a lot of the FEs used the same models/software in their institutions.

4) instead of learning from the last crash (all the software used, pressed the panic button more or less at the same time) the FEs ignored the lesson and blindly repeated the exercise.

5) the FEs became extremely greedy and used/abused the financial model to their own ends.

6) the unwashed masses became extremely greedy and jumped on the gravy train encouraged by the extremely greedy FEs adverts/assurances that they 'couldnt fall off'.

7) power hungry governments turned a blind eye to the disaster waiting to happen as the unwashed masses were happy livin in their virtual unrealitys.

8) BANG the inevitable happened, GREED won the day and REALITY blew away the smoke and mirrors of the virtual reality, GREED all round is the cause of the financial meltdown, its called 'the hands of inevitability' !!!!

theres an old pooter acronim which applies here, G.I.G.O. = garbage in garbage out !!!!!!! O_O

/rant over :O)
"So, the conclusion is, we are suffering a financial crisis which lies in the fault of a human, yet we are now at the mercy of a machine."

Yes, you/we are. Virtual Machinery which is SMARTer Enabled beyond your Limited Imagination.

And IT is Toying with you, searching/teasing/inviting Spontaneous Liquid Investment in ITs NEUKlearer AIdDrivers......Quantum Leap Operator Systems. 

And the longer the wait, or the denial, or the ignorance, the more expensive and lucrative the Investment required to Lead.
Things are going to get much worse, with the possibility of a worst case scenario of "starvation" as millions die due to collapsing systems that provide food to our grocery shelves and the money to purchase it. 

If it does get that bad, I feel sorry for people who work for banks as they will be strung up from light posts.
I think, you'd need to be an idiot to think you can earn 62 tril by inputing 1.

"but the software told me i could do it"

yeah.
Round one to the machines...

Just wait 'til we have arms & legs.
Machine that does nothing more than take your monies? I'd call that Satanism. Otana has step up, Nobody sees 7th Day Adventist, white shirt & door to door style. Come On Lady, Give It Up.

The Other Guy is Tannies Pop, still bit confused how found 'Em. Yet John just knows things could be lots worse.

Its some big power $$$ using election to sway vote. CHICAGO Money. When bunk hits 6,500 start doing some serious wondering.Chumpo.ryah, THE Next Coming:Pennyless.
drasher
Weebeedee wibble wooop.

The end is nigh, for impending the crash waits, an honour bestowed on a dead certainty. Blame! On you shame there is for that level of trust. Reap, sow, yet the innocent it is that suffer!

M4j0R