[Lex Computer & Tech Group/LCTG] Topic Research -- Programmed Trading and Internet Fast Lanes

[Steve Isenberg]

Bob,
You've done a good job researching the topic.  I would be interested in a
presentation on this.
(Especially if it had sure-thing stock tips -- haha)
-steve

On Fri, Nov 5, 2021 at 10:46 AM Robert Primak <bobprimak at yahoo.com> wrote:

> Programmed Trading and Internet Fast Lanes
>
> How a "black box" full of coiled wires could upset major financial markets
> in the US.
>
> I can get a wealth of information and in-depth analysis, including photos
> of boxes and maps of distances between Internet nodes, all relating to how
> technology made High Frequency Trading possible, and how HFT affected
> brokerages in NYC in the period of 2007-2014.
>
> Much of this material is based on NY Times investigations, leading to the
> book "Flash Boys" by Michael Lewis, then a NY Times reporter. His article
> "The Wolf Hunters of Wall Street" appeared in the NY Times agazine on March
> 31, 2014. (Subscriber-only content) A PBS NOVA program (Not available for
> free now) and a CBS 60 Minutes investigative report followed. (Available
> for free on You Tube now)
>
> While it is now subscriber-only content (I have a subscription) the NY
> Times Magazine article contains all the story and technical information
> needed to make a good, possibly 60 minute presentation on this topic.
> Depending on how technical we want to get, we could bring a lot of
> technology and computer networking details to bear on the problem. (I have
> no engineering or electrical engineering expertise, but maybe someone in
> our group has this knowledge.)
>
> While the scandal and the SEC reaction to it are in the past (2014) we are
> seeing other types of fast-lane issues (net neutrality, Internet streaming,
> and still some HFT market concerns) playing out to this day.
>
> The role of HFT in the 2010 financial meltdown is still controversial, but
> it may have been a contributing factor according to some analysts. See
> Michael Lewis's previous book, “The Big Short”.
>
> This topic does not cover the Social Media manipulation of Game Stop's
> stock. That might be another topic, but it doesn't involved nuts-and-bolts
> technology (and wires -- LOTS of wires, MILES of wires!) the way the "Flash
> Boys" scandal did.
>
> Videos:
> CBS 60 Minutes: Rigged (15 mins.) I would lead with this video, then go
> into technical and market details from the articles I've found. So this
> would be mostly a slide show presentation with a lead video (which probably
> should not be recorded). Not being a finance person, I would need help with
> the market details, if they get too specific.
>
> CBS 60 Minutes: Inside the Collapse (25 mins.)
> Both are part of the 60 Minutes Archives on You Tube and are free to show.
>
> The first one is the landmark expose about the "Flash Boys" scandal.
>
> The second one is about the May 6, 2010 financial collapse, led by the
> loss of liquidity in the sub-prime mortgage markets. (This was the
> so-called "flash-crash".)
>
> That 2010 scandal was not about technology overtaking market regulations.
>
> The 2014 book is much more on-point about how technology overtook
> regulations and caused market manipulations, and disadvantaged some
> brokerages while favoring others.
>
> -- Bob Primak
>
>
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