NASDAQ, the Latest Victim of Digital Dependency
Credit of a different breed -- that of credibility -- is the issue at hand for markets at large.
-- Johnny, Airplane!
This morning, I shared the following Random Thought: "Robot errors should increase in frequency as HFT manifests."
A few hours later, the NASDAQ halted trading, producing the flat-liner in the chart below.
As the global digital dependency continues -- and robotic algorithms take the place of human capital -- these glitches will become increasingly commonplace.
The question, of course, is how it manifests through the lens of investor faith and confidence; indeed, we've seen this movie before.
Of all the stock market metrics -- fundamentals, structural, technical, and psychological -- the collective perception is the single most important influence; you can never cage free will.
As we wrote long ago, credit of a different breed -- that of credibility -- remains the issue at hand for markets at large.
Given the Waning Integrity of US Financial Markets and The Devolution of Social Mood, today's NASDAQ crash is just another straw on the camel’s back.
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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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