Robots blamed for wiping 10 per cent off the value of sterling Algorithms have been blamed for a flash crash that wiped nearly 10 per cent off the value of sterling on Friday morning. The pound slumped to $1.18 as Asian markets opened from $1.26 the day before, falling briefly to $1.14 – a fresh, threedecade low. The fall came after French president Francois Hollande demanded a tough …
WTO defaults in place
Only if the UK is a member of the WTO. Once it leaves the EU it will have to apply to join the WTO…
The Tory party conference has given the currency markets plenty to worry about: the government is no longer aiming to reduce debt; access to the single market does not seem to be a priority; the Bank of England may have to choose between propping up assets and defending the currency.
@boltar - par for the course around here of late, I'm afraid. Even including a link to information backing your argument doesn't always do much good. Most of the knee-jerk, fact-averse downvoting seems to happen early on after an article is posted, and then later on, more considered Reg readers (presumably those with worthwhile jobs, who can't spend all day troll-modding on forums) generally come along and balance the scales a bit, if you're lucky.
Now, while I don't believe everything I read in the Economist any more than I do all that I read in the Register, quoting the relevant paragraph from:
http://www.economist.com/news/leaders/21708257-britains-prime-minister-must-resist-her-partys-dangerous-instincts-road-brexit
"Amid the world’s most complex divorce, Britain’s diplomats also have another vital task. Through its membership of the EU, Britain is a member of the World Trade Organisation (WTO) and party to free-trade deals with 53 other countries. When it leaves, it will lose all that. So Britain must urgently prepare to rejoin the WTO as an individual country—which, again, requires the consent of every other member."
The UK has a partial membership of the WTO with much of its common agreements dependent on membership of the EU.
This gives a good overview from some legal experts in the field of the challenge the UK faces in re establishing full membership of the WTO if we do leave the EU/EEA/EFTA
https://www.monckton.com/brexit-mean-uk-wto/
> that is seems we will need to reapply to join the WTO and any member could potentially veto us.
Not true. They've explicitly said we can't 'cut & paste' EU agreements since we lack the infrastructure which manage them - so the process of creating new (statutory) UK trade bodies and agreements will effectively begin from scratch - and take many years in some cases. Nonetheless our continued and full/discrete membership is already agreed.
"Britain is a member of the WTO and will continue to be a member of the WTO. But it will be a member with no country-specific commitments. We have had no other situation like that" (Azevêdo - WTO Head speaking in June)
The brexit posse had zero understanding of this - for large companies the solution is simply to maintain (or build) an EU presence - for others EU shells and partner agreements will probably be the answer short-term. UK Gov currently has no idea what it will do - they're still at scoping stage and not sufficiently skilled or staffed.
With both France and Germany signaling that the UK will not be allowed free access to the single market, this idea that the UK can somehow negotiate a one sided Brexit that allows them to preserve the advantages of the EU while dispensing with stuff they don't want has to be considered DOA.
I think May will chicken out due to EU countries' quite reasonable refusal to pre-negotiate terms of Brexit before notice is given. Who wants to go down in history as the PM that put the UK on an irrevocable path to national irrelevance on the world stage?
Fortunately these asinine automated trading crashes tend to get corrected pretty quickly, so the exchange rate's currently back at around 1.24. How we've let real world assets like currencies, stocks and shares be used as nothing more than casino chips in a massive gambling operation is somewhat mystifying.
Except in this case it's more like a dead cat bounce.
Sterling, on average, is going to continue to fall.
The FTSE 100 is mostly international megacorps, so now that it's clearer what May will do, it is logically rising, nothing much to do with export of UK services and manufactured products.
There is a short window for people to buy Sterling priced products and then there will be inflation on price of UK exports or web retail sales.
I read it in the beeb in the morning, and it kind of scared me, that in a human-designed, and supposedly human-controlled (?) system, nobody has a f... clue WHY some serious fluctuation happened. So is there ANY human who's in control, or at least, can PRECISELY establish the reasons? Hello, anyone there?
I'm awaiting the day when the gov decisions get outsourced to software, cause, you know, the machines can think so much faster... Hopefully they can think faster than the machines in Russia or China, when it comes to pressing the buttons to launch our (faster?) missiles... That'll give me an edge, extra 2 seconds to reflect...
The point in Automated Trading is to *NOT* have human intervention !!!
Humans are slow, make mistakes and let emotion get in the way !!!
The ultimate aim is to develop an algorithm (or set of) that is faster than anyone else and less likely to make mistakes than anyone else.
These 'Micro crashes' are just teething problems on the way to 'Trading Nirvarna' :) :(
As long as it does not get in the way of earning your bonuses, no-one in the industry cares.
The people that make the real money are slightly inconvenienced and the 'Mug Punters' pay for it.
It is of little note that the knock on effect is felt by the whole country and wider.
If things get too bad you can always take your 'Trading expertise' to some other foreign climes !!!!
>The fall came after French president Francois Hollande demanded a tough stance be taken by the EU during Brexit negotiations amid fears that the UK might actually leave the EU after all – a so-called “hard Brexit”.
FFS, the first time I support one of his demands, seriously, I live in the country presided by this Camembert cheese excuse for human being.
I guess, he was listening to Renaud Miss Maggie, I prefer Vega: You will never be my Maggy May.
As for the citizens of Britain, good luck, it pans out as I predicted and you are entering one kind of a shit-hole and that for the next 20 years ... take a deep breath now, you'll need it soon ;-)
Brexiters: Rira bien qui rira le dernier! Großbritannien ? Griff ranschweißen und wegschmeißen!
High frequency trading: what true value does it bring as opposed to paper-only gains?
An impossibility I'm sure, but I'm sure that slowing down trading stocks/shares rather than speeding them up might bring the useful pressure to "know what the hell you are buying/selling".
Buy from X and sell to Y in the nanoseconds before Y realises what you paid for it and you get your 1/1000% profit. Which means in order to make it worthwhile getting out of bed for, you have to sell gazillions to make a few measly million..
I'm all for people buying and selling stuff to each other but if there was ever a case for the Tobin Tax High frequency trading is it. Can I suggest as a possible twist the rate of tax is inversely proportional to the length of time you hold the assets. so the longer you hold'em the less tax you pay.
Blame who or whatever you will, but it is surely cold comfort whenever it is neither a mistake nor accident in a greater master plan with remote controlled command operations .... with unfolding series of Immaculately Machined and Advanced IntelAIgently Designed proactions ......... http://www.ur2die4.com/161007-2/
And Perfect AI Stealth is delivered in it being generally and widely believed and perceived as practically impossible.
"The Tory party conference has given the currency markets plenty to worry about: "
Exactly that, and currencies are only worth what the market confidence in them is. It didn't matter that the new Roman coins had more silver in them around 440AD than previous issues. People took one look at them, then at the old ones and within 18 months roman currency was valueless as no-one would accept it.
Flash crashes happen because people game algorithms to try and gain an advantage (the algorithms are in turn setup by people who might be good at statistical analysis, but they don't know all the inputs, and the people using the algorithms know just enough about them to clock-n'drool), OR because something is genuinely overvalued and once the bubble starts to burst the automated activity rapidly drives the trade values back down to "actual" levels.
After WW2, "British made" became a codeword for "shonky designs-by-committee using the cheapest possible supplies regardless of quality and put together by badly treated workforces using century old production tools" (literally that old in many cases) - the epitome of this being British Leyland. That's why people of the "empire" stopped 'buying british' unless forced to by their governments. Even though the quality has changed, memories are very long - as GM found when it tried to resurrect the Vauxhall brand in Australia/New Zealand.
The only thing that's been keeping the value of the pound high over the last 4 decades is the financial services industry. When that industry lost confidence in its home base - it has, and all the orgs are already moving their bases out of the UK - the pound lost a vital support base. Its remaining value comes from exports by its manufacturers - who mostly happen to be the car industry and also spooked into moving out. Commissar May could stand up tomorrow and say that Brexit is cancelled but it's already too late.
But never mind. At least we got that £350million to spend on the NHS, didn't we?
I understand why, for practical reasons, we have to pay attention to the value of sterling. I understand that certain people will be attracted to all that money that is available through currency speculation. What I don't understand is why we should take these pathetic little brain-dead gamblers as an indicator of anything at all about the state of the world beyond their own self-entitled fantasy bubble.
>What I don't understand is why we should take these pathetic little brain-dead gamblers as an indicator of anything
Is the UK self-sufficient ?
Import prices go up when pound tanks ... and it has not finished tanking, believe me! Soon, when you will want to buy, say, a MilyWay, it will be a tenner ... your salary will not increase, of course ... you will then think "Ohhhh, lets produce and export goods then, we are competitive" ... and somebody smart will ask: "Where are your factories?" and you will answer, "Oh, we trashed them in the 70's and 80's, but it's OK, because we compensate with the financial sector!" to which the smart guy will reply "Which financial sector? We just annihilated that one with Brexit!".
DISCLAIMER: I do not care either way (in terms of Brexit), I just think it is hilarious how you guyz have STILL not realized that you are in deep shit ... I live abroad and all this does not affect me, I DON'T CARE!
I stockpiled some value peanuts from Tesco earlier in the month.
Now my choices are to eat them as a high protein snack or to keep hold of them against the day that London property that I want becomes available.
Or the apes rise up. Damn these difficult decisions.
*munches peanuts to alleviate stress*
*goes to Tesco to buy more peanuts*
Well, it does affect ME. And I could no vote (bloody foreigner that mantains NEDs, politicians and private monopolies).
I cannot describe properly how pissed I am at the situation, BREXIT has cost me more than 30.000£ to date, and counting. On top of that, I have to endure xenphobia. At least I am white, blonde and green eyed..
>Or do you mean £30,000? In which case you might want to lean how to write to write numbers in English.
Ever heard of "locales" ?
You are, what is commonly known as, a TOTAL CUNT! See that window, there, Yes, that one, open it and jump, please, thanks, you are now a hero ... while you are falling!
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