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tv   Money Bots  Al Jazeera  February 5, 2022 4:00am-5:01am AST

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while the water, which we listen, design is making serious effort in order to stop the term, we need to use making store i am fully back to the window with the headlines on al jazeera, the opening ceremony of the beijing winter olympics has been held under strict corona vice controls 10 nations or staging. a diplomatic boy con because of china's human rights record. a 20 world leaders are attending, including russia's president. vladimir putin met china's leader and find a joint statement describing an unprecedented strategic partnership. katrina, you had more that inclusion and she didn't pig standing shoulder to shoulder showing what they describe as an unshakable bond. the leaders of russia and china
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met ahead of the opening of the winter olympics in beijing. it's the 1st time president she has met a foreign counterpart in person since the beginning of the pandemic. and the sure those that are in the spirit of friendship and the strategic partnership. her reach an unprecedented level show on there. so she went olympics 80 years ago, we promised to meet again. we have kept that promise. the leaders signed a joint statement, presenting a united front on a range of foreign policy issues. they called the nato to end it expansion and for the military alliance to abandon it's so cold, cold war approach. they also denounced the orca security alliance between the united states, britain and australia, and the formation of further blocks in the asia pacific. the visit comes as tensions escalate over the presence of more than $100000.00 russian soldiers on its
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border with ukraine. washington is threatening to impose tough sanctions on moscow . should its forces invade. the leaders are expected to sign 15 agreements on issues ranging from trade to technology during putin's visit. russia will increase gas applies to china and has announced a 30 year contract for a new pipeline between the 2 nations. economic support from china could undermine any western method to punish any possible russian incursion. crane that analysts say an even bigger concern, is it possible deepening a military corporation between moscow and they do? she didn't being has often spoken of his deep friendship with vladimir putin who was the 1st major leader to confirm his attendance at the beijing winter olympics. the u. s. u. k, canada and australia have not sent officials to the vet in protest against china's human rights record. katrina, you al jazeera, they ging in other news,
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more than half the un security council has condemned north korea for launching a medium range ballistic missile. 8 countries issued a joint statement, they include the u. s. france, japan, and the u. k. describing sundays launch as a significant escalation. but china has urged the u. s. 3 engaging dialogue with north korea and accommodate is concerns. the us is waiving some sanctions, only one civilian nuclear program has talked to revive the 2015 nuclear deal. enter a critical state. a waiver was ended by former us president donald trump in 2020. the european union has imposed sanctions on 5 members of molly's transitional government, including the prime minister, blah condemned a decision to delay elections. molly's military 1st took over in 2020 and had promised promised a vote this year, aid groups or setting up emergency shelters in madagascar as a tropical cyclone approaches. it comes less than 2 weeks after another storm killed at least $58.00 people. psycho and bad sir,
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i is expected to make landfall on saturday. france has offered military support to the united arab emirates following missile and drawn attacks by who the rebels in yemen. french armed forces will deploy a refiled jet to help reinforce the mit defenses. them, the lee has been targeted by 3 who the attacks over the past few weeks. and a 5th aid to u. k prime minister boys johnson has resigned. a policy adviser is the latest to leave after 4 senior staff members wait on thursday. johnson is under growing pressure over lockdown parties. the u. s. republican national committee has voted to censure leads cheney and adam kensington. the 2 politicians are accused of defying party leadership by participating an investigation into the january, 6 storming of the capital. next money boys on arches here ah.
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ready ah, the 5th of february, 2018 at 3 pm local time. the dow jones plummets as of 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, a 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. ah,
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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, gerhard 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 while if man be us to live, was in music, couldn't antarctica 100. hm. doesn't he go for the other trotted up to a 1000. once he runs, it was only the unit vine. he didn't deter about a 1000 as official privately. essentially high frequency trading significantly reduces the time that a stock is held before being sold. sometimes it's just milliseconds or even
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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, a high frequency trading system detected and immediately places its own orders for
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the same chairs with all the other exchanges faster than the pension fund kat, 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, his own $6000.00 within a few milliseconds, and with no attached risk. ah, i frequency trade as do not have to be active in the markets permanently. their advantage is most effective when crises, disasters, or political decisions cost strong price fluctuations. essentially high frequency traders benefit from crises and are constantly waiting for the next one to occur. in the beginning,
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the intention was to use greater predictability and faster 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 behalf. ah hm. i had a book. you know, trading 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 a couple hours i try and to
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validate that the engine itself was, i'm demobilized. ah, it turned out my engine was actually live. i had actually designed a 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 trade in a 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 a software developer in stanford, connecticut. i'm bodeo played an important role in the development of automated
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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 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 black jack and to make predictions doin farmer takes a different approach. in the 1970s, the physicist makes roulette his field of expertise. bob, farmer and his team begin to play, or 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. now this was lighting 76 when we got
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started. so you have to realize at that point, there were no personal computers. rifka in pennsylvania is a lag 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 feeble, our own toilet data center ever. it up for me to allow he just kinda had you. one moment that had you already load law firm as your e. could the don the senior had yuki solve? were you just getting no, couture. c, horseshoe law is separated the maneuver and energy sac. yeah. or can't hide smoky face. it don't say repetitious. killer. pushing to or if with absolutely more afy to little lashanda who i've run show. so the gather snell pauper dupree chicago
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risk of new jersey. she or meals just wanted. i met her so i was one to fail. or counsellor at mont issue 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. look, don't that he will stand to look a sasha, a car. they are leaky mom. had use you into an algorithm is a rule for answering questions. algorithms provide the foundation for farmers bed, said the casino. oh lou computer is required to process algorithms quickly. the time, however, these are large, expensive, and slower. this begins to change in the mid 19 seventy's and the 6502 microprocessor had just come out same microprocessor that the guys
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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 a batteries under the other armpit 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 spends 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 render it 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 based predictions. farmer and his team eventually decide that the 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 desk, and they are counting bill harley to find out what's happening. i lost only one word to describe was happening in that is the johnson's astro averages. are almost 200 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 when, 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, farmer holl trading companies, found a black hole had originally put his mathematical skills to the test in las vegas where he counted cards of 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 bodeo joins holstein in september of 1997. quantitative analysts are also in high demand in europe, the best emerged from the universities in paris, mathematician so welcome additions to the market. as our physicists like steph antique allie parker sherwood's peter? totally mowbray on bush edition is, shall he don't. jason medea measure of the felon meshida officer. it had been p.
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allie parker shade, elmore on bush. it, if he can, i don't. he's really windy shows. q g, a piece of the collector, secure. li, metty, metal penal shayla. vive don't you know of a d? is this mr. dot? if he is the catch you lucky shortest if he i make he shook and is occupied, the can cooler. he said damper he did the clearly any type of it, not yet, but the question lego. so unique want is 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 too much of it. premier though salmon sitina is hidden, that if he's here of her food whiskey they keep on out of harry t me t. she's a mom, jennifer. she po proposal. he are a multi days activity. the project media,
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the of new bell. while we were doing the roulette project, our friend rob shaw came over and said, i just found out about this amazing thing of chaos. we went up to lab and we looked at the simulation on the i la computer and we were just amazed cuz you could see that even though there were deterministic equations with making this random looking set of patterns on the screen. and so we got completely fascinated by that and we, um, we created algorithms for finding identifying patterns in nature that are described by chaotic dynamics. i'm doin ca devotes himself to studying pappy's. the tell our predictions to be made. one of his areas of study is meteorology, pharma and his team in los alamos,
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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 a company to use computers to protect the stock market. this was in 1991 and called
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herself critical. mm. those are those are the only one. yeah. i think most 3 how the reason i'm not for a lease on my like all of a year to hope i see by this. i'll do not to have on the fund is i think i say taylor that she wants to still continue to if i move got, you know, like the 3rd tech counter in math. not in yet feel real or to come feel young to go to the lab. rosser very on the hour today, but the alarm clock on a boner the longer abaz's gun. 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 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 restructure the ski shift my vendors, intakes and bit saved is the station sent on an an impact norton form from the internet. it's 9 button a. gordon, so plug to young. these are a few more community of interests reviewers in the men optimize. awesome. awesome. so that has to be of have been with yellows and found that on to me, man, meet the man that one off the morrow, yoga keshay of the articles of time. he's of the essence as
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a gift, when his characters, we've any wish to get all the luck the instead this he comp now barking big to him millisecond on does his fear on the should we figure shaped more bailiff off on gaming? is him so financed is less than guns v. as 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 went electronic 1st and the many of us who were 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 letter credit and you 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, hey, what you turned on a direct edges. very similar to what we were doing on your fax and i,
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i've 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 found a 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 when lesson was that you've got that big. the stock
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market also to make a good model. you don't have to pretty pretty well if you're right 55 percent of the time. if you make enough doubts, then you can make a pretty good profit. and unlike roulette, where if you start, when they can just throw you out or threaten to break any caps, ah, a 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 the us in about $2600000000.00 in south korea military service is compulsory but some
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refused to take pa 18th weeks. those dodging the drop on al jazeera ah ah ah. stories of life and inspiration as series of short documentaries from around the world that celebrate the human spirit. against the odds with
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al jazeera, select change makers. lou login on fully battle with the headlines on al jazeera, the opening ceremony of the bay jing winter olympics has been held under strict corona virus controls. 10 nations or staging a diplomatic voice cart because of china's human rights record. but 20 world leaders are attending head of the ceremony rushes, president med china's leader. they signed an agreement or statement rather describing an unprecedented strategic partnership. it includes calls for nato to ended expansion and lilith's u. s. involvement in the asia pacific, which it took
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a certain us, you lose the router machine, you're doing you. as for arbor lateral relation, they are developing with the spirit of friendship and strategic partnership and reach an unprecedented level. they are an example of upstanding relations which are both sides to develop and support each other. at the same time. more than half the un security council has condemned north korea for launching a medium range ballistic missile. 8 countries issued a joint statement. they include the us, france, japan, and the u. k. were described sundays launch as a significant escalation. but china has urged us to engage in dialogue with north korea and accommodate its concerns. the u. s. is waving some sanctions on iraq and civilian nuclear program as talks to revive the 2015 nuclear deal enter a critical stage. the waiver was ended by former us president donald trump in 2020 . the european union has imposed sanctions on 5 members of molly's transitional government, including the prime minister. the block condemned
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a decision to delay elections. molly's military 1st took over in 2020 and had promised to vote this year aid groups or setting up emergency shelters in madagascar as a tropical cyclone approaches. it comes less than 2 weeks after another storm kill at least $58.00 people cycling. but sir, i is expected to make landfall on saturday. france has offered military support to the united arab emirates falling miss ireland drawn attacks by who the rebels in yemen. french armed forces will deploy refiled jets to help reinforce the immorality defense system. the u. e. has been targeted by 3 who the attacks over the past few weeks. a 5th h t u k prime minister boys johnson has resigned a policy advisors the latest to leave after 4 senior staff members quit on thursday . the news continues on. angie's here, after money boss, new speed is not only essential
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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 spies, 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 i frequency 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, i was so interesting as 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 de financial journalist jennifer niel kept a close eye on developments from the very beginning of
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yashira. and he thought you might often crispy nausea to le focus in the media if su has his best for him. a viagra. so for the higher ed took a market companion of kylie thought her does it a quorum federal basis was he lost the hapless jenny? highly? yes. we got it from. i see that he got his get was them nice. yeah. and molested also live on our thought alpha. i look that more and on the mean. yes. as he mixed up and get cookie and try the whole thing off yet, can you? he still has more for me all been as she said aloud, i scarce insect of lazar dollar, allegedly, jay sali, mushy asthma, mo nadar pick the well it is on day after the manila if minute the myself with his best there for you, not if else while the explosion of high frequency trading in the early 2 thousands continues. heim 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. ok, i won't go into details, but it happens. 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 to trade those 30000 contracts. so try to dump them immediately on another exchange where some other market makers still quoting 30000
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x. so we, we created all these, this algorithm in this kind of, we're 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 wanted. 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 a 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. oh 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 train machines, reserves. ah, 2007. i was sir. designed to be, you know, a ferrari from an independent for ari to me or 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 all shaft horse she'd lead because the linear when you're georgie, ah, or v all the me cause going or should legit as early 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 membership, some major changes pretty much hit when i call full footprint. and we went to a half percent us marketer pretty much overnight. and i was, we're going very well. and tom may 2009 when things mysteriously stopped stopped working.
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we built a 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, in toxic me. so what i, what was happening is i would keep redirecting our trading towards of a exchanges that were bless pox and ah,
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and then there were none. so the last exchange took a toxic which was direct edge. ah, i may of 2009. i was out of the, it was 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 optimize his 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 edge 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 pan 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 um, 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. i was invited in the club to become a new abuser. i it was 20 minutes of work to fix these problems, but i had 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 use the cheats or you are a victim. it was design, there was no middle ground. 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 201-2011. for the 1st time, pine bo dank, he's 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, you know, undocumented special order types and an obscure abs exemption and regulation and m and a mass to get to the top of the q. no, they're gonna tell you they're faster than you. and that was, you know, that's the false flag. let's say or another it term is better. yeah,
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the red herring speed is ah airy a red herring for, for um, for a lot of 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 price is immediately begin to collapse. approximately 3500000 shares are affected
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and 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 and isis besides, mackenzie ha ha escaped. i am for ashton thought, fish courts nasties and flash crash. so i told lathan i with the blower of off camella ones. day i had invited money from the thorny fork of off that because afterward with money full yet only and flesh crash of ice ocean
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doin farmers journey from the casinos to los alamos. the non to wall street eventually takes him talks it where he now studies stability in complex systems like the financial markets. i think part of what happens in flash crashes though we haven't got 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. it's 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't think about it pretty much. when i say you, i mean the machine can't think about it pretty much i do think we have to worry that as 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. it'd 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, their trade on the 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 that 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 . yeah, we are tomatoes and fields where thousands even done in kafka tweet and the shorter well i know like when you could gable be done with a keys of buying a title hatamio coming us back. we'll decide huffman wish, my 2000 to 12 and she's in sweaters and what's, what else invites him? do you think will the on the finance knocked her so lately with you on to i lauren or traditional resumes for that scene out because on the stuff that murder,
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awfully crunch. 100 analogous. you divide as 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 the wish came in twice as big wasn't finance, puts a lot of london looks on bush boot. the police regional unfortunately wasn't as in finance. police were doin then. 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 conflict fence, hundreds viet being diesel equal you just for the supply and see how does this mine
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of often implement these and i in front of them. so got him sitting little golden dummy transition on the enticing lobbyist move the soft look runs hundreds submitted financed marks legal and plan a plan on down with that we could spend on platen quality now. did you want we can spend also has i think it's all that is often socialism and like one process yet on does that are not to refute a candid deezen part like will 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, the possessions,
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ray and the sad assembles to me at 1st i 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 because i think i have 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 online, 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 and wealth become im, essential to people feeling southworth mm hm. most of the retaliation was done through the industry. quietly, i and, and, you know, it was kind of a strange mix in that i am the people who were
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at least supportive were 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 white investment bank once we had met 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 marketer. and i, he told me, says, even if you tell everybody what we're doing, the buy side 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, and after the conference i said, you're totally right by push. anyway,
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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 exchanges. its entire purpose was to level the playing field. and i think the only people who really read it rely frequency traitors. no kidding or trickle safety of more. a somebody do own place small. don't thought i machine in mushroom la casita. go la machine, a book, computer. net could m confusion. it could oma la machine 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 thriving, it's a now goes ah, where the arctic meets the tropics, and that's the case with these 2 masses in the us southern states, the moment get dramatic with always he gets man, you know about this significant which still rain where it's will my and between the 2 freezing rain and of course is enough energy difference here to spin up some pretty stove, a rare tornado cited with this damage and soil in alabama. tases tonight because
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the snaps trees. and in texas snows, no, dallas not caught in houston, but it certainly cold that far south. now eventually the sun will do its work even in february and things will might a bit. so data cease temperatures rise steadily to about 8 degrees, but normally it should be 17 light times by 5, you're seeing nighttime temperatures by day as a best guess. badgering sunday they'll be significant rain again in florida, potential flooding here, but really the system gone off shore was back on the ground, different matter. still disruptive, more snow to come for parts of ontario. otherwise, sunshine is predominant to the size where that cold air leaks it. hans the shower big chassis, likely mexico, and probably guatemala as a result of attempts difference. and it's still raining in espanol not much. it was but hasn't entirely dried up south of that. still a potential for a bit of flooding in kito and parts of printer quite a
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a while to warm it. we listen, design is are making serious efforts in order to stop with we meet with global use maintenance. talk about the stormy st on americans are increasingly saying authoritarianism might not be so bad. there were several steps along the way where the chain of command it seemed 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 policies and the impact on the world on al jazeera, the latest news, they've been extremely hot. on for 10 years they was the victims of not just, most people got to chatting with detail coverage warning that only problem inspection. so in power, large part of providing polygon back here from around the world on house
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people, years of living on the street actually accelerates the agent brought them. ah, the beijing winter olympics kick off overshadowed by covet 19 and a diplomatic voice caught over china's human. i reckon, oh, play you're watching al jazeera live from bill. how with me fully back, people also coming up, russia and china present a united front. their leaders commit to a stronger strategic relationship in the face of pressure from the west.


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