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Strategies & Market Trends : The New Economy and its Winners

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To: 16yearcycle who wrote (57419)9/14/2016 1:27:51 PM
From: Bill Harmond  Read Replies (1) of 57684
 
Stocks are priced vs bond yields, but what worries me are these automated pricing algorithms that Wall Street as adopted over the last 10 years or so. These models have bond-yield inputs like Wall Street has used forever, but now they're black boxes written my MIT types and I don't understand how they work and what connections they have to the same firms' automated trading.

Seems to me that the network effects of these models reacting to unexpected changes could cause craziness, ala the Taper Tantrum and the Flash Crash of recent years.
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