Human bond traders barely show up to work as machines take control
Monitoring hyper-automatization
“While the humans are now taking four-day weekends, the robots do not rest and, as we showed earlier today, they have (in conjunction with the Fed) commandeered the entire Treasury market where liquidity has fallen to financial crisis lows according to Deutsche Bank. What this means (as Jamie Dimon will also tell you) is that events like last October’s Treasury flash crash are likely to occur more frequently going forward and when you combine the rise of the machines with shrinking dealer inventories and throw in the possibility that the dealers aren’t even coming to work anymore, you paint a rather disturbing (if hilarious in a surreal kind of way) picture of a market that’s been stripped of the human element and now runs on malfunctioning algos which are themselves slaves to Fed doublespeak and Tesla rumors.”
“Essentially, Matthew [Duch] is worried that no one is home at bond desks and thinks that may be a very bad thing when (not 'if') the machines decide one day that some random data point or unduly hawkish/dovish soundbite out of an FOMC voter is cause for all the algos to chase down the same rabbit hole sending ripples through a fixed income market devoid of any real liquidity.”
“So while it's 'pretty quiet out there' now save for the hum of the machines, expect it to get a lot louder on the Tuesday morning when the humans return to their desks and find out everything collapsed on Monday.”
Full article:
via:
http://failedevolution.blogspot.ca/2015/04/human-bond-traders-barely-show-up-to.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+TheUnbalancedEvolutionOfHomoSapiens+(the+unbalanced+evolution+of+homo+sapiens)