The Rise of the Machines is an interesting op-ed piece in the New York Times about our financial system’s dependence on sophisticated computer systems.
It was easy enough for us humans to understand a stick or a dollar bill when it was backed by something tangible somewhere, but only computers can understand and derive a correlation structure from observed collateralized debt obligation tranche spreads. Which leads us to the next question: Just how much of the world’s financial stability now lies in the “hands” of computerized trading algorithms?
Tags: Finance
