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tv   Money Bots  Al Jazeera  February 3, 2022 11:00pm-12:01am AST

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moving from one city to another, palestine 1920 on al jazeera. a lot of the stories that we cover heidi complex, so it's very important that we make them as understandable as we can as al jazeera correspondence. that's what we strive to do. ah, hello, i'm barbara siren london. these are the top stories on al jazeera, the u. i says the leader of iso has been killed in a special forces operation in northwestern, syria. i believe, but a he well as she me out, could i? she was one of at least 13 people, including 6 children killed during the raid and the town of at may in rental, held the ably province. witnesses reported shelling and gun fired during a 2 hour baffled. it was the largest u. s. rate in italy, province. since and a pack in 2019 that killed the previous leader of iso. this operation
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is testament to americas reach and capability to take out terrorist threats. no matter where they try to hide anywhere in the world. i'm determined to protect the american people from terrorist threats, and i'll take to see decisive action to protect this country. and we'll continue working with our close allies and partners. the searing democratic forces directly security forces, including the kurdish press. margaret had more than 80 members of the global coalition to keep pressure on ices to protect our home. we remained vigilant. we remained prepared. last night operation took a major terrorist leader off the battlefield and sent a strong message to terrace round the world. we will come after you and find you in the latest diplomatic effort to ease fears of a russian invasion of ukraine turkeys president has met the president of ukraine, volota me zalinski, turkey as good relations with both countries and hopes to act as a mediator. this comes as russia condemned the u. s. decision to send more troops
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the eastern europe, nato says the kremlin moved 30000 more troops along with weapons to bella luce, how the bill had meet as more from keith. i think it is a relationship that is improving by the day i'm in these economic does a very important for both countries and in turkey has always said that it, the territorial integrity of ukraine must be respected in the past. president air to one has also said that it would be very unwise of russian president vladimir putin to have a military escalation or indeed to invade ukraine. so turkey was very clear on his position or all along. and actually, i think there was a very symbolic imagery when he arrived at the presidential palace earlier today, he was received in rad pump, and then the turkish president stopped, looked at the parade there and said, slab o gray, you know, which means glory jer,
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crane. i think that says a very strong message on where he stands when it comes to this crisis. the problem is he is a nato member. and so at the sort employed he is also in a difficult position because he does enjoy job. he does enjoy a good relations with russia, even though they don't agree on certain files. for example, on syria and olivia. but turkey would like to keep that relationship while going ahead with his relationship with ukraine and being a native member. the 2nd largest army of nato's, as certainly a very important position there. a key west african leader has warned that a string of recent cruise has become contagious and controlled to even war. despite dna and president that nana aku for are those remarks the a f. p news agency reports that the economic community of west african states
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decided against further sanctions. i'm working of fossil soldiers. they are toppled the government last week. the 3rd in the area to be taken over by soldiers in 18 months. rescuers off the coast of nigeria are searching for 10, missing oil workers after a super tanker used as a storage depot signed following a massive explosion that 130000 ton trinity spirit flew up on wednesday with around 8000000 liters of oil on board. and the value of shares in facebook's parent company collapsed by 25 percent as markets opened in new york, wiping more than $200000000000.00 off the firms value. meta reported weaker than expected profits on wednesday. after revealing that it lost a 1000000 daily users worldwide. those are the top stories it stay with us coming up next. it's money, bolts, our have more news in half an hour. see then ah
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ah, the 5th of february, 2018 at 3 pm. local time, the dow jones plummets as though the stock exchange has been hit by lightning. it loses more than $1500.00 points in a matter of minutes. never before in the history of the index of american stalks law so much in a single day. and new york is not alone. the collapse spreads like wildfire to frankfort, sidney, tokyo, panic erupt. nobody knows what has caused this disaster. there is no discernible real world economy reason. there are no new economic predictions, no unemployment statistics. the only explanation that is offered sounds strange. apparently the trading computers were too fast.
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ah, how is it possible that a fringe development of automated stock trading yesterday, nomic acceleration of computer systems, could almost cause a world wide financial crisis. in berlin, gad, chic campaigns for more transparency in the financial sector than the one on the store for grants. hunter, for your average of chevy is no neatness, decent, hazardous, headless right. if man, be us to live, was in music, couldn't antarctica 100. hm. does any of the other trotted out to a 1000? once he runs it was i like the unit vine. he didn't deter about a 1000 as the festival. privately. essentially high frequency trading significantly reduces the time that
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a stock is held before being sold. sometimes it's just milliseconds or even microseconds. high frequency trading is the opposite of long term investment, which is what stock market we're actually designed for. access to stocks also became a lot faster. the quality of the investment was no longer the deciding motivation for buying or selling. all that mattered was who could react the fastest. high frequency trading is performed exclusively by computers, not people. these computer systems are completely autonomous. essentially, they are warring box money box, high frequency traders place their computers as close as possible to stock exchange computer systems. a protest known as co location proximity and high speed connections are a deciding factor. for example, a pension fund wants to buy 600000 shares at a price of $9.50. their order goes out to various stock exchanges. when the order arrives at the 1st stock exchange,
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a high frequency trading system detected and immediately places its own orders for the same chairs with all the other exchanges faster than the pension fund kath, thanks to its high speed systems. the high frequency trader is able to buy up all the shares at a price of $9.50, then sell them to the pension fund for $9.51. the high frequency trader has earned $6000.00 within a few milliseconds, and with no attached risk. ah, i frequency traders do not have to be active in the markets permanently. their advantage is most effective when crises, disasters, or political decisions caused strong price fluctuations. essentially high frequency traders benefit from crises and constantly waiting for
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the next one to occur. in the beginning, the intention was to use greater predictability and foster infrastructure to increase the stability of financial market. in fact, the opposite has occurred. automation has made them more vulnerable. after all, there is no electronic system that cannot be hacked. ah, mm. i had a by you treating engine was running in frankfort remotely by it was being controlled from london. what happened in this particular case is that an internet related outage caused us to lose control over the engine. that was in frankfort. and i remember for couple hours i try and
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to validate that the engine itself was, i'm demobilized. ah, it turned out my engine was actually live i had actually designed feature that said if you break connection with the mother ship, stop trading. but that feature had a parameter and it was off. i had this engine that was basically a trading. it could a last calculus $30000000.00, right? it lost a few $100000.00. but it was, i was a terrifying experience. i'm bo derek is a trader and come
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a software developer in stanford, connecticut. i'm bodeo played an important role in the development of automated stock trading. his idea of using computer algorithms to process information as efficiently as possible is one of the foundations of modern stock trading. a 2nd prerequisite for success is a high speed data connection. the french businessman steph antique knows all about fast data transfer. his company's mckay brothers and quincy data are based in paris and california and operate the data connection between new york and chicago. the homes of america's most important stock exchanges. stiff antique and heim, boat egg, our players in a global battle for the best computer software and the fastest data networks.
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this contest began a long time ago in the casinos of las vegas. at the end of the 19 sixty's, a new generation of scientists recognizes that it is possible to use computers to increase its luck at the tables. pioneers like edward thought, and blair how develop algorithms that allow them to count cards when playing blackjack. and to make predictions doin pharma takes a different approach. in the 1970s, the physicist makes roulette his field of expertise. bob, farmer and his team begin to play ramp. they soon discover that it's possible to predict the course of the ball. if one knows its current position and speed and then we embarked on building a computer that will allow us to do this. and others was lighting 76 got started.
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so you have to realize at that point, there were no personal computers. rifka in pennsylvania is a leg in the mountains, stiff antiques company is working on making the fastest data connection between new york and chicago even faster. no, he's also considered more. i sampler demarco brother in feeble said he bought our own toilet data center over it up for me to allow he just kinda had you one moment that had you already load law farm as your e or could the don the senior had yuki solve? were ye risque no kaltura? see her? sheila is separated the magnetic and energy sac. yeah. or can't hide smoky face. it don't say repetitious killer. pushing 2 or if weight absolutely more puffy. to live on lashanda, who i've run show. so the gather snell pauper dupree chicago risk or new jersey she
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or meals just wanted. i met her, so i was one to fail or counteract model she is he empty, pu, come laska yan course of for me now on. do i sorry to was donna eluted that he was told that is who was this? you don't, i course. i don't know that he will stand to look a sasha at her. they are leaky more had use you into an algorithm. is a rule for answering questions. algorithms provide the foundation for farmers bed, said the casino. oh no computer is required to process algorithms quickly. the time, however, these are large, expensive and slider. this begins to change in the mid 19 seventy's,
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the 6502 microprocessor had just come out same microprocessor. the guys from apple used to build the apple computer billing. thomas team designs a computer around the same process or the initial version of it was under the armpit. there was a pack of double lay batteries under the other arm. pit switches in the shoes, wires running up and down an antenna around the shoulders. the antenna would transmit the signal to a 2nd person who had been placed the baths from the moment, the croupier since the ball until the ball until the basket closed. there is typically about 10 seconds to pass 10 to 15 seconds on. so we had to be able to take the data for the rotor and of all and get the prediction 4 to 6 seconds ahead of when the vets got closed. so that the better had enough
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time to reach over in place to help us. so we had to have the prediction coming pretty fast from the computer we had ran very slow by modern standards. but because it was, you know, carefully coded machine code. we were able to get the answer out. in a matter of a fraction, a 2nd don't pharmacy computer became the stuff at legends. it wasn't just any computer. it was the 1st computer built into closing, while steve jobs and steve wozniak, were creating the original desktop computer doin farmer was building one in a shoe. farmer himself becomes an icon for people working in the field of computer base predictions. farmer and his team eventually decide that that winnings at the roulette wheel do not justify the risks they are taking. ah,
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they returned to more serious scientific fields. farmer finds himself at los alamos, where he investigates methods of predicting the weather, among other things. then the world changes, or at least the world of money allocation, financial data or cantonsville hardly to find out what's happening on st. louis, one word to describe was happening in that is b. jones industrial average is almost $200.00 points. it is down by a $191.00. had been out of all right now for you. 345000000 shares available day on wall street. the dow jones industrial average right now down 271.53 point. putting the down below 2000 mark now right now in 1975 weight, when during the 1987 stock market crash, investors attempt to dump their shares in
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a panic. they brokers eventually begin to ignore the frantically ringing telephones . the authorities decide that more trading should be left to computers, as people simply are not reliable enough. the new york stock exchange remains america's largest, but chicago becomes the center of new financial technologies. the whole trading company is one of the pioneers in the field of big data and market addictions. in the early 1990 is the company is considered a measuring stick by many traders like doin pharma whole trading companies, found a black hole had originally put his mathematical skills to the test in las vegas where he counted cards at the blackjack tables in the 1970s,
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he is one of the 1st to recognize the potential of automated financial trading. in 1985, he found his own company in chicago, the center of us derivative trading i'm bo deck joins holstein in september of 1997. quantitative analysts are also in high demand in europe. the best emerge from the universities in paris. mathematicians are welcome additions to the market as our physicists like steph, antique allie parker, sherwood street. totally. nobody on bush additional shell. he don't. j seed medea measure of the found the shows or, of course sir,
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it had been p. allie parker shade, elmore on bush. it, if he can, i don't, he's really windy shows. q g, a piece, a decor vector, secure, li, metty, metal penal shayla. ve don't you know of a d? is this mr. data? if he's the catch you lucky shortest if he are making shook and is active, he's the controller. he said, damper he did the clarify, any type of it more yet, but the question larosa yes, on his up. what she marshall did. good. i bosa me. say, come m under. shall kayla been people. he bow a plan. go to a bunker a key fondly did he thee on betty ah inactivity to much of a tribe. you look salmon, said sitina as he done that if he's here of her food whiskey decay. but i have had a t me t. she's a morgan of her, she po process, how he are
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a multi days activity, the project media, the of nipple. while we were doing the roulette project, our friend rob shaw came over and said, i just found out about this amazing thing with chaos. we went up to lab and we looked at the simulation, yellow computer and we were just amazed cuz you could see that even though there were deterministic equations, was making this random looking set of patterns on the screen. and so we got completely fascinated by that. and we are, we created algorithms for finding identifying patterns in nature that are described by chaotic dynamics. i'm doin huh. devote himself to studying pappy's, the tell our predictions to be made. one of his areas of study is meteorology,
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pharma and his team in los alamos, are able to expand the time frame for precise hurricane predictions from 2 days to 5. this gives emergency services, valuable time to evacuate people in danger. with every time i will talk about this, somebody would say, well, have you apply the stock market? and so i kind of chart saying no b, while i heard about the efficient market hypothesis, which says the stock market, sorry, inherently unpredictable, was a very popular theory at the time i didn't believe. so normally i once again left, he left his job at university of illinois, and i left my job. it was alamos, and we gathered with some other younger scientists business guy and started
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a company to use computers to protect the stock market. this was in 1991 and called herself critical. mm. those are those above if any one? yeah. i think most 3, how do you so much? not a lisa. my like are they? yeah. they're homeless. he found his id not to have on the elephant is i think at home say taylor, that she wants to still continue to family. got, you know, like the 3rd tech counter in math, nor in. yup. feel real or to come feel young. he got a lab rosser very one hour to day buffy along on a bonner the long on about him done. the paris stock exchange is not the only empty shell. even wall street is little more than a movie set these days. this interaction data center is
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located in an anonymous building on the outskirts of vienna, austria. the company has 13 such co location centers throughout europe. more than $100.00 internet service providers. 5 internet exchanges and important cloud services have computer stationed here. as does vienna stock exchange, the exact location is kept secret, and there is no official confirmation of the presence of stock exchange computers. we secure the sky shift, my biggest infection behaved, is the state and sent on an an impact norton form from the internet line barton a gordon, so close to young on these are a few more community of interests reviewers in them and optimize. awesome. awesome . so that has to be of been funerals and standard on to me. man. meet
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a man that one off to morrow. eureka shift out because of time, he's of the essence as a gift. when his characters, we've any wish to get all the love in steph, this account nav arkenberg ticket millisecond on does history on the should we figure shapes more bailiff? fun gaming is him. so finance this less than countries of it. for this reason, the vienna stock exchange is most important server over which deals are made, isn't located in vienna at all. it is in frankfort in the race to buy or sell. it's important to be as close as possible to the main service of the main stock exchange. proximity is time and time is money. in the 1990 s u. s. trading is divided between the new york stock exchange on wall street with its traditional trading floor. and it's traditional companies such as ibm and general motors and the electronic stock exchange. nasdaq,
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european markets actually want electronic 1st many of us who are part of that transition from florida electronic markets. we kind of were groaned in the european markets 1st and then we came back to the states. matter of fact, your x is quite interesting to me looking back because it was the 1st exchange we're where i found, you know, basically a cheat to exploit. ah, i got a lot of credit and he got a big promotion for finding a cheat on the, on the or exchange to get prices faster than we should of. and i'm now years later when i hit the front page of the wall street journal for my whistle blowing against direct edge, i'm the former colleague from hall. i contacted me by email and said,
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hey, what you turned on a direct edges. very similar to what we were doing on your and i, i had been whistleblower for a year and had not really acknowledged that i was guilty of the same type of thing that i had turned in. you know, i just had an acquainted the to and it made me realize how difficult it is for people to really see what they're doing in our industry. when we founded critics young me, we didn't know anything about financial markets. our method was to look for patterns in the data and, and when we found those patterns, then we would design a training system that would make that's based on the patterns we learned some lessons from a let. one lesson was that you've got of that big the stock
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market also to make a good model if you don't have to pretty bring well, if you're right 55 percent of the time. if you make enough doubts, then you can make pretty good profit. and unlike roulette, where if you start, when they can just throw you out or threat to break your kneecaps, ah, the stock market, they don't kick you out for winning. so we actually took us about 5 years before we really found something that genuinely worked in a consistent way. once we did that, it worked very well. and so production company traded subsequently for about 25 years. we ended up selling it to you b us in 2000, 600000000. americans are increasingly saying authoritarianism might not be so bad. there were
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several steps along the way where the chain of command, if you like, tried to cover what's your take on why they've gotten this so wrong? that to me is political malpractice, the bottom line on us politics and policy, and the impact on the world. on al jazeera, 2 boxes from the street to chicago on different paths, with the same ambition. fighting their way to a better life for themselves and their families. in the volatile world of chicago, south side is no easy task. witness. ring sight on al jazeera with
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ah, hello, i'm barbara sarah london. these are the top stories on al jazeera. the u. s. says the leader of iso has been killed in a special forces operation in northwestern, syria. i believe but a heem, hollis, she me, i could i, she was one of at least 13 people including 6 children killed during the rate in the town of atlanta and rebel held. they'd leave the province. witnesses reported shelling and gunfire during a 2 hour battle. it was the largest u. s. rate in italy, province since an attack in 2019 they killed the previous leader of ice. this operation is testament to americas reach and capability to take out terrorist
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threats. no matter where they try to hide anywhere in the world. i'm determined to protect the american people from terrorist threats. and i'll take to sit decisive action to protect this country and will continue working with our close, our eyes and partners. the searing democratic forces directly security forces including the kurdish push murder, and more than 80 members of a global coalition to keep pressure on ices to protect our home. we remained vigilant. we remained prepared. last night operation took a major terrorist leader off the battlefield and sent a strong message to terrace round the world. we will come after you and find you in the latest, the fanatic effort, the ease fears of a russian invasion of ukraine. turkey's president has met the president volota, mused lensky. turkey has good relations with both countries and hopes to act as
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a mediator. this comes as the pentagon says, it is new information suggesting russia is planning a so called false flag attack to justify an invasion of ukraine without providing any evidence for senior aids to the u. k. prime minister have resigned within hours of each other as pressure mounts. and boris johnson over the party gate scandal, director of communications jack doyle stepped down shortly after the departure of policy had. when near mersa, they've been followed by chief of staff, dan rosen, field and senior civil servant. martin reynolds. the prime minister is facing increasing questions over his leadership, as investigations continued into parties held down the street during co vid, locked down. those are the top stores, i'm going to have more and all of them on the al jazeera news hour that's coming up in just under half an hour. but now money votes continues. of a new
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speed is not only essential when operating a stock exchange. investors and traders also have to react quickly. those who are 1st to recognize price differences between stock exchanges can use this advantage to make a lot of money. at the turn of the millennium, the large banks realized that they're falling behind the competition. in 1999, goldman sachs buys the whole trading company for half a $1000000000.00. hall was supposed to be become like the backbone of you've of goldman. i really didn't it in it really was a very, very different culture goldman than, than i haul him and many of my people i related to and didn't feel at home dissatisfied with the investment banks, business practices, a number of former whole trading company employees leave. goldman sachs in 2003 bodeo joins u. b. s, which is planning to open
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a new trading floor in stamford. he is tasked with creating the infrastructure from the ground up. i remember the 1st time i heard about advocacy traders. i. the was an elevator with a person who's very, very senior in the business now. and he was complaining about how they would interfere with, you know, the, the trading profits of the desk he was running, but that they didn't make that much money. and i was, that was the so interesting is that the strategy class made a huge amount of volume, but not much money at all. and we were like, why would people do that? you know, what, why would you do all that work? and nice makes such a small profit. ah, many was surprised by the rise of high frequency trading. to financial journalist jennifer niel kept a close eye on developments from the very beginning of
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yashira, and he thought my thought then crispin, nausea to le focus in the media. if su her, his best is lima, vienna gassett for the higher education market companion of kylie thought. her felicity qual, federal versus was he lost the hapless jen? hi lisa, i guess it got it from. i see that he got his get was them not he actually had molested left on off at dawn alpha. i look that more and on the mean, it's a mix up and get cookie and i the whole thing off yet. can you list of it more for me all been as she said, than alaska insect of laser dollar volatility. so mushy. asthma, mo, nadar pick the, well, it is all on there, there the money, or if minimize that i felt like is there anything else? while the explosion of high frequency trading in the early 2 thousands continues. i'm bo deck is developing new trading strategies for his employer,
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u. b. s. he calls it sighs game. his algorithm follows a simple logic. because large orders are given preferential treatment by the stock market. the money bought dynamically increases its order to remain at the forefront and push out competitors. however, there is a catch. he has to ensure that the artificially inflated order never actually takes place. if you put huge orders out there of that size and they all trade, you will go pretty much instantaneously. belly up. okay, i won't go into details, but it happened on it's a game of chicken in a way. we had to write algorithms that said, if you traded 30000 contracts, you don't want a trailer 30000 contracts. so try to dump them immediately on another exchange
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where some other market makers still quoting 30000 x. so he, we created all these, this algorithm in this kind of, or in terms of getting the largest, what we call participation rate. it turned into this horrible game of chicken and hot potato, where you quoted more than you want. and then you really should enter in any responsible manner. and then if you actually got hit, which happened, you needed to dump it on other people before i before they realised that the potato was coming, it was as stupid as you can get. it was, it was stupid. ah, so the algorithm that i designed was powerful enough that everybody else had to match it. and that actually brought down the market system, the market data system of the u. s. option market to the brink of like collapse
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basically. and so cool for me, i was like it just like, literally just love this i, i could see how many months it took for another firm to realize what i was doing and tried and true same algorithm. and it took 3 years for 7 firms to figure it out . i'm bo deck size game turns him into a financial rockstar. however, he knows that he can't play the game forever. it is time to strike out on his own. i walked out with the team. and i set up trading machines, reserves ah, 2007. it was sir. designed to be you know, a ferrari from an independent ferrari to me area for me or was really a dream as to be independent. but then realize it was going to turn into an odyssey
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boat ag leaves u b. s. at a time when the stock market in the usa and europe are changing dramatically. part of this is due to the high frequency traders. the large investment funds are angered by the fact that the small flexible high speed traders are constantly snapping at the heels. the banks begin to set up internal exchanges, which allow trades to take place in secrecy. more than 40 of the so called dark pools are established as alternatives to the 13 regular stock exchanges in the usa alone. the movement of investors into the dark pools forces the stock market to cater to the high frequency traders. and they soon make up the majority of traits. some estimates put the number as high as 70 percent before long. the banks themselves cannot resist the temptation of the high
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frequency money and open up the dark pools to high frequency trading. speed is all important. le ledger or sap hoshevely does delineate when you're chaudry ah, or v all demi was gone or should left desert eddie meal ah, we bought before the financial crisis. we launched beasley into it. we traded through it, we scaled out all of our algorithms and memberships, um major changes pretty much hit when i called full footprint. and we went to a half percent u. s. market share. pretty much overnight and i was we're going very well. and tom may 2009 when things mysteriously stopped stopped working. we built
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wood basically measure that the trades that we intended to do were in fact profitable. and that were the trades of the machine should be doing over the period of 2009. and i started seeing and changes ah, the stock trading that we did change quite a bit over that period of time. and what happened was some i, you know, kind of bought into them. what i think of now is a myth where people say, or that that exchanges toxic. and in, in the, you know, without, you know, that's just kind of a blanket term. greg, you know, i'm getting screwed on the exchange. that's what being toxic me. so what i, what was happening is i would keep redirecting, are trading towards of a changes that were less toxic. ah,
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and then there were none. so the last exchange to go toxic was, was direct edge. ah, i may of 2009. i was out of the, those when you're away from the office and i for week and i came back and there was this traumatic change that was so severe that it basically took the business from modestly profitable to flat. in order to confront the problem. pine bo deck immediately buys foster connections and price fate. he optimized his coat, but the problems increase. he watches power, leslie, let the blood drains out of his company. facing bankruptcy, hind bow deck encounters at direct age salesman. at a party. he just told me any outlined 3 major abuses he'd i got
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interested and i remember take out a napkin arrow where we found the pen or something but i, i wish i had this napkin. so i'm, you know, i'm like, what this is, do you mean it works like this? and he explained to me these very, very sophisticated abuses. and i am, he said to me that they built all the stuff to attract high frequency traders, but they hadn't done good enough job. so now they were going to make new high frequency traders. and i was invited in the club to become a new abuser. i it was 20 minutes of work to fix these problems, but i have been chasing for half a year. and this guy could have just told me half a year ago. and the, you know, if he had told me much earlier, i probably wouldn't have crossed my mind how wrong it was. but i was so
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angry, it was very clear to me that you either used the cheats or you were a victim. it was designed, there was no middle ground. you don't, you could not be innocent once, bo, deck discovers the reason for his company's failure. he embarks on a last ditch attempt to save it. however, he is too late. trading machines and his bankruptcy during the turbulence of 2010, and 2011. for the 1st time pine bo deck, he is forced to confront the realities of high frequency trading. do you think the high frequency trading industry wants to say? well, we're using a undocumented special order types and an obscure abs exemption and regulation and m and a mass to get to the top of the queue. no, they're going to tell you they're faster than you. and that was, you know, that's the false flag. let's say or don't know, the right term is better, you know,
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the red herring speed is ah airy a red herring for, for, for a lot of tricks that my industry has developed to get ahead of other people. the activities of the high frequency traders remain hidden from view for a long time in 2010, something happens that suddenly lifts the veil at 2 32 pm on the 6th of may, 2010. the u. s. financial planning company waddell and reed places a huge buying order for forward contracts valued at $4100000000.00 using an automated execution algorithm. it is a huge order and extremely promising for high frequency traders. the money bought immediately begin to buy and sell at lightning speeds and without letting up share prices immediately begin to collapse. approximately 3500000 shares are affected and
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more than 200 companies lose their entire share value in the matter of minutes. nobody knows what is happening. 13 minutes later, the chicago mercantile exchange is forced to stock trading. so much liquidity has been sucked out of the market. that it's in danger of total collapse. after a break in trading of 5 seconds, the market comes down again. the cause of the events of may 2010 is never fully resolved. the largest flash crash to date happens on the 5th of february, 2018. its impact is felt around the globe. isis, besides, chances are our escaped. i had asked and thought fish caught snuff, isn't flashed crushed quite often. i with the blower, the vodka made it won't dare, hadn't bank money from the thorny forgive off that because after what it was, money will yet empties and flesh crash of ice ocean
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doin farmers journey from the casinos to los alamos and on to wall street eventually takes him talk, said what he now study stability in complex systems like the financial markets. i think part of what happens in flash crashes though we haven't gotten the bottom flash crashes as well as we should. there are algorithms running and they're just reflexively doing something. and they go on right, right on doing it, even though it would be better to stop because that's what their program to do. and they don't have time to think about it any more than running a trading system that literally cares about microseconds. that means you have to write code that's extremely spare. your signal hits your machine, your machine can at most run a few lines of code and then it has to make
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a trade. you have to do everything super quick. you can think about it pretty much . when i say you, i mean the machine kept, think about it pretty much i do think we have to worry those markets go faster and faster. we're opening up the possibility for an instability. as a result of the collective interaction of high frequency traders with other parts of the market. and we're doing that for no, no useful purpose would be one thing if we were taking these risks because it came as something that was valuable. doesn't give us anything valuable, just makes a few people rich. and the rich in a crazy way. they get rich by, you know, co locating servers next to the stock exchange and writing algorithms that trade on that instantaneous glitches of the other orders hitting the market. critics of high frequency trading have spent years in brussels trying to achieve he,
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you wide regulation. the privatization of markets encouraged by the e used 2004 method. one directive results in stock exchanges having to look for new clients. a similar regulations did in the usa as a result, high frequency trading gains and increasing foothold in europe's market regulations pertaining to high frequency trading that were passed by the e u parliament or overturned at the last possible moment by the finance ministers in the counsellor at the european union, but we should finish weiner before they are equal, younger financed milk to vinegar out of we are tomatoes and fields where thousands even done in kafka and the shorter, well, i know like what you could gave him the guns with the keys of buying a title, hatamio domino, stock will discipline which to my 2000 to 12 and she's in sweaters and what's what else? and quite soon do you think will the on the finance not too. so lately with you on to i line or traditional resumes for that scene out because on the stuff that were
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awfully trans 100 and the one you divide as the yes them, if it come up would convert couldn't the e u. parliament agrees on a holding period of no point 5 seconds and a cancellation fee designed to restrict high speed trading this is done above the sex was considered doyle, issue kleckley shy, thought to the with beach are going to happen higher to wish gain, talk to him twice as big wasn't finance, but a lot of london looks on bush barrett know police regional unfortunately wasn't as in finance, police were doin and then what happens when i got to the bodies you want me to ask them if it comes in with some name? well, not really, how much do you for twitter, the sofa, the expense, hundreds to viet gate and he's legally able to just for the supply and see how does this mine of often implement the isn't i in front of them. so got and student guild
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and i meet the truck and vans is on the in places lobbyist who does not look runs hundreds, submitted financed marks legal and plan a plan on down with that we could spend on tracking that, click on the electric. now do you want me to spend also has i think a tool that is often socialism and like one process yet on does that are not to refute a candid deezen part of the old i'm if it's locked in 2012 the same year that the you start working on the method to directive. i'm bow deck becomes a whistleblower in the usa. he has met with powerful opposition and the bankruptcy of his company affects him deeply. to me it's not about you know,
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the possessions re and the status symbols to me. it 1st rejected them, but then i realized at some point that you literally get paid in that you get more opportunity. you get bigger bonuses if you want a boat right. be tune your compensation, what they expect your demands are. that's how this business works. it's a, it's very, very difficult to play the wall street game and be modest. you are not rewarded for modesty. and i will say after a long period in the business, it did start to corrupt me. and i, the whistle buying was, was an amazing experience. was an think i had been corrupted by the business. and i will tell you why the 1st time i realized that i was was when i had to mow my own won, i live in an air behead where people don't mow their own lives. so if you go it out
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while you're on line, it's noticed. and i'm, i will say that shedding, that was a liberating but it took a lot longer than i thought it's disturbing how much those symbols of status of wealth become im, essential to people feeling southworth mm hm. most of the retaliation was done through the industry are quietly i and and you know, it was the kind of a strange mix in that i am the people who were
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at least supportive where the were the victims. it was completely confusing. i thought that what i did was providing information that would balance things and kind of repair the industry, but the victims were basically embarrass what investment bank wants to admit. has been routing orders that have been abused for like 5 years by exchanges. high frequency traders. what pension fund wants to admit that? right, so i, i didn't get the love from, from that side of the fence, but was very strange. as i got a lot of attention from the high frequency traders, especially a high frequency training executives who kept trying to reach me back. i
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will say that that the process made me respect the bad guys way more than the rest of the industry. because they were actually right about the risks they were right about the regulatory response. they pushed things to a level where they could manage it and they didn't go beyond it. there was one, i'm a president of a large high frequency trading firm that had multiple percent market share 4 percent market share. and i, he told me says, even if you tell everybody what we're doing, the buy site is so lazy. they won't read anything. they won't understand anything, they just won't do the work. you could just put it all out in a map and nothing will change. and i sent over, so we'll see about that. so a year later, i'm at a conference where i debated him. and after the conference, i said, you're totally right by push. anyway,
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course over everyone's head. i was like, there there is i, i think over 500 pages in the federal registrar of changes and am documentation on features of exchange. it's. it's entire purpose was to level the playing field. and i think the only people who really read it rely, brings the traitors. no kidding, or trickle safety of more. a some boys do own place small. don't thought i machine in machine la casita got la machine, a book, computer net good on google prison. it could only limitation that the hagler kill she. so when i got into this business, i thought the whole point was to replace the old boys club to get rid of it. and i, what i learned after 20 years is what we ended up doing. so we automated the old
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boys club. it's alive. it's driving, it's in now goes ah, [000:00:00;00] with the latest news they live in extremely high school. and for 10 years they was the victims. and i just got to chatting with detailed coverings warnings that only bomb effective selling power, large part of precisely polygon gap here. from around the world, one of those people, years of living on the street, actually accelerates the aging,
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brought them from international politics to the global pandemic. and everything in between. doing me, if i take on the life dismantled misconceptions and to meet the contradictory mark lamarr hill, and it's hardly get up front and out there with there's been a lot of rain recently throughout australia and the still plenty in the tropics because he's some sort of organization to this little frontal system is pushing out of the right person, on the other hand, has been sitting in the sunshine and there it is. there's nothing but sunshine. so 40 degrees is on offer to you on friday. well above the average, yet of the 40 degree day adding to this record hot summer, but it cools down rapidly, says to then 23. by time you get to sunday with the wind changing direction. at the same time, we've already changed the wind direction for brisbin. no longer hot and humid here
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it's on the cooler side, but 27 hotly. cold. be honest, and there are a few showers here. the old line of rain stretches down towards new zealand wedding to see the right there for a couple of days lasting into the weekend, i think and eventually become brighter. temperature drops that rain comes in debt about 60 twenty's by your average. that's your real picture for sunday. then same story for eastern part of australia, the cooling trend for the west, west rain, possibly touching purse that the rainy seasons pet itself up a little bit in parts of southeast asia. so the coast of vietnam and southern philippines do look fairly wet, but asked was for lanka, towel neither to drive picture. ah, but in south korea, military service is compulsory. but some refused to take part one at 18
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weeks. those dodging the draft on al jazeera, a diverse range of stories from across the globe from the perspective of networks janice on al jazeera. ah, this is al jazeera ah, hello, i'm barbara sarah. this is the al jazeera news, our live from london. thank you for joining us. coming up in the next the 60 minutes. the u. s. says the leader of i saw, has died in a raid in syria. i bought abraham l a. shemale could i? she exploded a bomb. they killed himself and members of his family. turkey's president offers


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