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

[Evie]

👍 I second.
Evie

On Tue, Nov 9, 2021 at 11:14 AM Steve Isenberg <smisenberg at gmail.com> wrote:

> 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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