Financial Bloat
The big scale, systemic inflation of the 21st century: global capital chasing mirages: Long-Term Capital, Enron, Madoff, the Great Collapse -- all marked by overconfidence in growth models. All models have limits, but financial ones distantly related to reality pump up self-deceptive bubbles.
From the Asian and Russian currency crises from 1997 onward, many financial gurus described the sudden bubble pops as caused by too much money chasing too few solid opportunities. 

A great deal of financial decision making is now done by computer models, from personal credit scores to trading of investment instruments, like CDOs, credit default swaps, etc. 

The newest financial trading models are poised to rev up transaction speed even higher.  High frequency trading (HFT)is already reported to be at intervals of 1/1000th of a second. When a new computerized trading center opens it will take HFT to a new level, and dueling trading models already account for about 90% of all trades. It may soon rise to say, 99% -- or all trading will be by computers.

The churn speed of these transactions may change the nature of markets. They can spiral too quickly for human intervention, so controlling computers will have to intervene on human's behalf. 

See Financial Froth.


CONTEXT(Help)
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Compression Thinking »Compression Thinking
Compression vs. Expansion Thinking »Compression vs. Expansion Thinking
Expansion Economics »Expansion Economics
History - how did we get this way? »History - how did we get this way?
Service Industries »Service Industries
Bloat »Bloat
Financial Bloat
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