MSR Social Computing: Kevin Slavin

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Hello Tokyo

New York as a canvas and who gets to paint it
stories, not facts [!]
cities and arbitrage
- how cities listen, and what they listen for
- Netherlands, 1920 - preparing for air attacks
-- these ear-horn air attack amplifiers was a real artifact!
-- the speed of information had stakes -- high ones
- Baghdad, 1990 - b/c the technology of radar was made obsolete by the F1-17 -- the "stealth bomber"
-- replaced by the F22
- how stealth works: you make a big object look like a lot of little objects -- and in order to detect all those little objects, you have to increase the granularity of radar so that the sky becomes effectively illegible through overwhelming amounts of information
- but stealth only confuses radar -- it doesn't hide electrical signals: "to make something visible, learn how to look"
- financial services: 20% of GDP created by [financial] services and 35% of all wages in NYC
black box trading -- algorithmic "algo" trading and high-frequency trading
- moving mack trucks through the market while not letting anyone know you're doing it, like "financial camouflage"
-- so you take a huge thing and break it up into a million little things and move them through the market
-- so using an algorithm to break them up and move them fast -- and another set of algorithms is trying to find them, an engage in arbitrage around the identified trades
-- so trading has nothing to do with humans anymore -- algorithms battling algorithms to make and detect massive trades
--- 70% of all trades on the market are algorithmic
- speed is the competitive advantage of the information, amplified by the size of the market [this is the geography of server placement and Stephen Graham]
-- ie, this is how the Rothschild family made their fortune, in part -- through a private network of carrier pigeons
-- submarine telecommunications cables -- this is what speed looks like now -- and 60 Hudson St., the carrier hotel -- this building represents the computational center of the marketplace, where all the telcos meet without going out onto the internet (used to be the Western Union building). It's on Hudson St, because that's where the people are, so the infrastructure is there. And the information used to be a product of human exchange.
-- the NYSE used to be in a coffeehouse near where the ships were docking and newspapers were circulating
-- jewelry merchants <-- --> financial services
-- inventing the idea of commercial paper
--> city as platform
- the financial services "delaminate" over time: the city exists to produce paper, and the paper gets more and more diffuse over time
- once upon a time, that market was still about humans near each other, trying to figure out what was going on -- even if trading in paper
- now, the marketplace is a whirr of algorithms talking to each other "duking it out"
- so server distance to computational centers is now New York's advantage in the marketplace, and its measured in milliseconds
- hence weird spikes in commercial real estate
- this is the image of the city: network topology -- more meaningful in financial terms than whatever the people who live there happen to think
- as far as HFT traders are concerned, the city is a motherboard, and they're looking for the most efficient circuitry to transmit info to the bus (ie, the carrier hotel) -- and if you're not participating, you're just "loitering on the motherboard"
- "that is the use of the city at this moment."

but maybe there's good news!
- example of the scam in The Sting -- that time and speed are weapons
- what if the traders just built their own network? they could just lift up into the air and leave behind all their ties to the "viscera and the garbage...they could pass right through us, like a gas, like we're not even affected by them." "we will reach the singularity through financial instruments. they will leave the earth and leave us be."
"using time as a tool and not a weapon"

[ooh. the ethnographic of financial trade algorithm makers would be awesome]
[the fetishization of access to past through representations of archaic artifacts and archaic modes of representation -- what does Molly think?]

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This page contains a single entry by Liz published on January 11, 2010 10:59 AM.

MSR Social Computing: Blaise Aguera y Arcas was the previous entry in this blog.

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