(PhysOrg.com) — In the United States, ultrafast trading in financial markets between 2006 and 2011 was the underlying factor for over 18,000 extreme price changes, according to a new study. Neil Johnson, a professor in the physics department of the University of Miami in Coral Gables, one of the authors of the study, thinks that a buildup of such “fractures” can destabilize the market. This study, “Financial Black Swans Driven by Ultrafast Machine Ecology” was submitted to arXiv earlier this month, suggesting the link between extreme-change fractures and market crashes.
More information: Financial black swans driven by ultrafast machine ecology, by Neil Johnson, Guannan Zhao, Eric Hunsader, Jing Meng, Amith Ravindar, Spencer Carran, Brian Tivnan, arXiv:1202.1448v1 [physics.soc-ph]
Phi Beta Iota: Computational mathematics is light years ahead of government oversight, never mind the control fraud inherent in that putative oversight. Who is representing the public interest here? Nobody. This would be an excellent focus for the first true multinational multiagency intelligence and counterintelligence centre….however, such a centre would be even better if it were “whole.”