The Null Device
Posts matching tags 'finance'
One of the dividends of the melting of Arctic ice is on its way; this summer, three flotillas of icebreakers and cable-laying ships will begin laying submarine cables crossing the Arctic, from London to Tokyo. The cables, which will go through Canada's Arctic Archipelago and skirt the Russian north coast, will cost between $600m and $1.5 billion each and will reduce the latency between London and Tokyo (a link which now goes either through the Indian Ocean or the long way around, through North America) by 30%, shaving 60 milliseconds off; which translates to up to $25 million per millisecond saved.
As important as network links are in today's hyperconnected world, the fact that some three or so billion dollars (a sum which could buy a lot of other things, from providing millions of people with clean water to patching up bridges and power plants) was easily found for a 60-millisecond speed increase is mostly to do with being massively useful for high-frequency algorithmic trading. Objectively, it makes no difference whether a transaction between London and Tokyo takes 170 or 230 milliseconds to take place—though whether the transaction gets in before or after the rest of the market is the difference between profit and loss. Already, a significant part of the global financial system resembles a game of Core Wars played with real money; large amounts of wealth are conjured into being in finance houses by wartrading bots created from GPUs and FPGAs by extremely well-renumerated geeks, and many of the brightest minds of our age are eschewing the vows of poverty which go with the academic life or the modest salaries promised by pure science and medical research and instead going into creating the bots that will outcompete the current generation of bots. As such, there's all the money in the world for faster network links between global financial centres, and the Arctic link should tide the traders of London and Tokyo over until someone opens a finance house on Novaya Zemlya or in the Canadian arctic and beats both sides to the punch. After all, 299,792,458 metres per second is not just a good idea; it is about as iron-clad a law as there is.
The article suggests that, while algorithmic trading will benefit from the link, it will also be open to general traffic. Though, since the reduced latency is a competitive advantage worth countless millions, I wonder whether civilian access to the cable will be specially configured to slow packets down by a few milliseconds.
The Grauniad has a piece about capitalist-realist artist Damien Hirst, whose exhibition at the Tate Modern could be the peak of his imperial phase, and the idea of art-as-a-financial-instrument which he (well, he and Koons) has become the embodiment of:
This isn't just art that exists in the market, or is "about" the market. This is art that is the market – a series of gestures that are made wholly or primarily to capture and embody financial value, and only secondarily have any other function or virtue. Hirst has gone way beyond Warhol's explorations of repetition and banality. Sooner or later, his advisers will surely find a way for him to dispense with the actual objects altogether and he will package concepts in tranches, like mortgage securities, some good stuff with some trash, to be traded on the bourse in Miami-Basel.
The byproduct of his activities is the most starkly authoritarian corpus of art of recent times. All those hard, glittering surfaces, those rotting animals. The body, for Hirst, is trash, which exists to be anatomised, displayed, described in cribbed Latin names. The only way to cheat death is to slough off your rotting flesh and take on the qualities of capital. It's the 21st-century version of ars longa, vita brevis. Don't just make money, be money: weightless, ubiquitous, infinitely circulating, immortal.The article describes the mechanics of the art market and how public museums, for all their image of being above the fray of crass commerce, have become tools of art investors' Ponzi-like schemes:
This is how it works. A few major collectors make the market. Where they lead, the horde of hedgies follows. Many of the new breed of art investors ... have jettisoned even the pretence of connoisseurship. Some of these guys care about the bragging rights that come with a blue-chip work hanging in the loft. Others are all about the numbers, and employ the same tools and decision-making processes to play the art market that they use at work. A few have also discovered that many of the regulatory mechanisms that apply in other markets – preventing insider trading, price-fixing by cartels and sundry other abuses – simply don't exist in the art world. It is possible to game the system in many ways, and the careers of certain artists look not unlike a classical Ponzi scheme, where money from new investors is used to pay returns to those further upstream.
The corruption of art museums by investors is perhaps most apparent in the case of New York's New Museum. In 2009 it devoted its entire three-floor space to an exhibition of the collection of Dakis Joannou, a Greek Cypriot industrialist who sits on the museum's board. Other recent New Museum shows, devoted to Urs Fischer and Elizabeth Peyton, also relied heavily on Joannou's collection, and his wider web of patronage. The impression has been given of a museum that is no longer able to make independent determinations of value. This has become an open scandal in New York, satirised in a much-reproduced drawing by William Powhida titled How the New Museum Committed Suicide With Banality, or "how to use a non-profit museum to elevate your social status and raise market values". Likewise, Hirst's major collectors will see an effective windfall from the inclusion of their works in a Tate retrospective, and other Hirst stakeholders will benefit too. That may not be why the show is happening, but it is not without significance.
The 19th-century idea of criminal anthropometry may be dead, but its spirit keeps reemerging. A study, on a peer-to-peer lending site, suggests that one can predict a person's creditworthiness from a photograph of their face:
The team recruited 25 Mechanical Turk workers and asked them to assess pictures of potential borrowers that had been posted on Prosper.com. In particular, they were asked to rate, on a scale of one to five, how trustworthy these people looked, and to estimate the percentage probability that each individual would repay a $100 loan. They were also asked to make several other assessments, such as the individual’s sex, race, age, attractiveness and obesity. The 25 results for each photograph were then averaged and analysed.
The researchers looked at 6,821 loan applications, 733 of which were successful. Their first finding was that the assessments of trustworthiness, and of likelihood to repay a loan, that were made by Mechanical Turk workers did indeed correlate with potential borrowers’ credit ratings based on their credit history. That continued to be so when the other variables, from beauty to race to obesity, were controlled for statistically. Shifty physiognomy, it seems, is independent of these things.
That shiftiness was also recognised by those whose money was actually at stake. People flagged as untrustworthy by the Mechanical Turks were less likely than others to be offered a loan at all. To have the same chance of getting one as those deemed most trustworthy they were required to pay an interest rate that was, on average, 1.82 percentage points higher, even when the effects of historical creditworthiness were statistically eliminated.While the exact attributes that make someone look "shifty" have not been isolated, it could be only a matter of time until someone devises an algorithm for deriving a credit score from a face and implements it, either behind a CCTV camera or in a back office, fed by the numerous images of an individual which can be harvested from the intercloud.
Of course, it may not be the case that some sets of facial features correlate to financial unreliability. Another explanation could be that there are some sets of features which are seen as correlating to financial unreliability. Whether or not these features have any causal connection to the temperament, psychology or moral fibre of their bearer could be irrelevant; if people consistently think you look shifty, they'll treat you as if you were, even if you weren't originally.
(via Boing Boing)