“The calamity of the information age is that the toxicity of data increases much faster than its benefits.” – Nassim Taleb, The Bed of Procustes
Regular readers of Zero Hedge (or its various contributors) are not likely to be surprised by today’s “glitch” in the trading of an estimated 140 or more stocks today, the apparent result of a “high-frequency” trading program gone awry. I won’t bother to belabor the details; those interested can follow-up with articles at ZH (such as this one) or at CNBC.
I will say this, however: The Free Market, such as it was, is dead, gone, buried, and has only been “resurrected”, after a fashion, in a manner not unlike a zombie creature, animated by the Federal Reserve, its member banks, and those equally able to access virtually free risk capital, technological trading tools, and insider information.
Why anyone would think that reasonable investments might be made at the NYSE or any other exchange is beyond me.
In the past, I’ve suggested that the last vestiges of “free market capitalism” is alive and well only at your local flea market, garage sale, and occasionally on Craigslist or eBay. I’ve seen nothing in quite a while to dispel that notion.
The officially sanctioned markets are best considered “Flee Markets” and, in my humble opinion, the mess is only going to escalate. Today’s events are merely the tip of the iceberg and should serve prudent observers as a prime example of the sort of systemic risk that folks like Nassim Taleb have written about at some depth.