Scaredy pooh on the sandbox

MK: There’s more algorithmic trading, where algos are going through headlines or sorting through earnings statements or going through social media in real time and trading. What are the consequences for investors?We’re seeing reaction time get shorter and shorter for releases, which can also incur costs or take advantage of slower human investors. There are signs of potential abuses with social media posts and headlines. That’s going to get worse and worse and be more of an impediment for human investors to make money. It’s going to cause more confusion in the marketplace.If you run a certain strategy, how do you insulate yourself against these things? If these algos are taking advantage of you on the liquidity side, maybe they are also taking advantage of you with social media and news headlines. Can you have some sort of countermeasures, if you have a strategy that is vulnerable to that type of thing? What are the limitations? What are the ­regulatory angles as well? If someone is creating fake tweets to hurt your strategy, are you allowed to defend yourself by throwing off that algorithm?

A JP Morgan derivative chief bashing bots.

His observed problem is not the bots or the humans, it is the monetary system connected to government causing cycles that need to be hedged. Like a few weeks ago, the debt flow from Treasury was jammed as they awaited the arrival of foreign money.  The French riots solved that with a rush to safety. t was more likely the willingness of US millennials to pay 4.5% of their salary for Treasury interest costs is the cause of the French riots, causality reversed. Cheap money is gone.

Not the bots' fault, it is the fault of frail thinking about currency banking, going way back to primitive times at MIT under Samuelson.