I went to You Tube and ran the search, “robot trading.” I was looking for a journalistic take on the dangers of this kind of trading. I didn’t get it. There are innumerable sales pitches for just such trading mechanisms. I watched one and they are “exuberant.” They appear absolutely convinced that these things will make you rich. Apparently this is similar in the trading world to the “second coming.”

I found an actual news story by getting a link from a blog. I just couldn’t get one off You Tube. I have virtually never had difficulty finding an appropriate video for an economic comment. The sales pitches simply dominate the results of the search. I haven’t seen that before.

The CBS news program, Sixty Minutes, has a report on the subject. It is a daunting report on the implications of robot trading. It can be very dangerous to whole system. If one robot goes in one direction. It is possible that they will all go in that direction. You should hope that they are all buying because selling could be painful. I recommend you watch the program.

I warn you, there are commercials. However, the report is elegantly done and will maintain your interest.

Let me ask a question –

Is it ethical to use super computers to get a fraction of a second (sometimes, hundreds of a second or less) advantage over your competition?

I want you to understand that only a very few people can afford a “super” computer. Generally speaking, that is probably not you. If you, as a human, attempt to compete with one of these machines (and you’re not, you’re competing with dozens or hundreds of them), are you on a level playing field.

As a society, we might find the costs of this trading to be higher than the benefits, if one is willing to think of the interests of the nation as a whole, something currently not in fashion.

But it should be.

James Pilant