And it seems no matter how hard I try, I’m always wrong
Wow. I’m kind of amazed that the NYSE has the balls to build a huge new datacenter (WSJ was nice enough to crack the story open). If you’re unfamiliar with how the stock exchange really works, you’d be surprised just how little human interaction occurs in what gets traded and what does not. How little human interaction, you ask? Well, 70% of all trading is done strictly by computers with complicated programs and algorithms that sift all the available public data about stocks, and then makes trades based on that information. Think about that for a second. 70% of our entire economy is controlled by a bank of computers. Now, the NYSE is building a brand new datacenter, they’re giving access to firms so the firms can locate their own servers within the datacenter. What does that mean? All of these same computers will be able to trade at a much higher frequency– orders of magnitude higher– and much more quickly; think in milliseconds. If this doesn’t concern you, then you’re probably not aware of the inherent fragility in computers, programs, and the good ol’ computer adage “garbage in, garbage out”. I could very easily see the entire exchange crashing
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