SOW THE WHIRLWIND / REAP THE WHIRLWIND – ONE DAY ALL THE MONEY WILL JUST HAVE DISAPPEARED

During the 2008 Lehman Brothers crisis talks in Washington, Hank Paulson, then US State Secretary of the Treasury, left the room to seek prayer. Paulson must have thought that only a higher power can rescue the global financial system from abyss; the abyss of total meltdown caused by uncontrollable computers – he knew very well what was at stake as he was aware of Algorithmic Trading.

Also referred to as black​box trading; computers programmed to make large trades automatically, swiftly and ultra-fast (no human trader can possibly catch up; or interfere).

The instructions given to the computers are based on certain scenarios, written in algorithms. Proponents point to the advantages of removing emotions from trading decisions and, supposedly, making markets run more smoothly.

Reality shows a different scenario: unexpected trades causing frenzied, unintended, and out of human control swings in the market. One day we will witness technical mishap; a flash crash!

And the world will be bankrupt!