Complex Financial Instruments and Testosterone-Driven Trading: Algorithm of Market Chaos

The combination of increasingly complex high-risk financial instruments (unknown, under-acknowledged, under-estimated and/or misunderstood by public and private policy sector workers at all levels of governance) and a thriving culture of testosterone-driven traders

with their hands firmly on the throttle of oil-dependent muscle vehicles, flooring-it on shared virtual highways with silently condoned (albeit) unwritten permission and even enthusiastic encouragement to exceed safe speed limits, the exponential growth in wealth of the upper quintile of the upper quintile accompanied by the exponential increase in poverty of the lower quintile of the lower quintile, the global expansion and implementation of the belief-system based on unfettered, self-regulated market political economies (loosely called market liberalism although best-served by political conservatism) promulgated around the planet through mass media content packaged to sell imagery of the invisible hand of the market as the right hand of the new secular god surrounded by soldiers of the user-pay, private-is-better, blame-the-poor, monetize-everything, blame-the-ill, social-justice-vs-economic-efficiency, base-minumum-wage-on-pin-money-workers, minimum-government, trickle-down-affect, legal-but-not-ethical, group-think-culture led by the Triad of Mises-Friedman-Hayek has led to market chaos that is not theoretical but Really Real.

According to this article (2008-04-19) by Dan Mitchell in the New York Times, “Movements in financial markets are correlated to the levels of hormones in the bodies of male traders, according to a study by two researchers from the University of Cambridge.”

This is twisted curve in the winding road of ancient arguments that prohibited participation of hormone-driven women (emotional versus logical, intuitive versus deductive, feelings versus reason) in pivotal positions of decision-making.

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Does this mean the invisible hand of the market should be wearing a glove? Should the use of Viagra be monitored on the trading floor?

Webliography and Bibliography

Coates, J. M. and J. Herbert. 2008. “Endogenous steroids and financial risk taking on a London trading floor.” Proceedings of the National Academy of Sciences. http://snurl.com/250a7

Emarketer. 2008-03-18. “Online Advertisers To Spend Through Turbulence.” http://snurl.com/250e6

Flynn-Burhoe, Maureen. 2008-04-19. “Complex Financial Instruments and Testosterone-Driven Trading: Algorithm of Market Chaos.” http://snurl.com/250a6

Mitchell, Dan. 2008-04-19. “Trading on Testosterone.” New York Times. http://tinyurl.com/5tvolz permalink

Palmer, Jason. 2008-04-14. “Traders’ raging hormones cause stock market swings.” NewScientist.com. http://snurl.com/2508n

Rubel, Steve. 2008-04-17. “Study: A Billion Dollars in Internet Advertising is Wasted.” Micro Persuasion. http://snurl.com/250au

Rubel, Steve. 2008-04-19. Twitter.

Notes:

1. Algorithm: a “problem-solving procedure: a logical step-by-step procedure for solving a mathematical problem in a finite number of steps, often involving repetition of the same basic operation” or a “problem-solving computer program: a logical sequence of steps for solving a problem, often written out as a flow chart, that can be translated into a computer program,” a term used in the late 17th century. It is an alteration, “after Greek arithmos “number,” of algorism, via Old French and medieval Latin based on the Arabic al-Ḵwārizmī , the name of the 9th century mathematician who introduced algorithms to the West.” See MSC (1998-2005) Encarta.

The combination of increasingly complex high-risk financial instruments (unknown, under-acknowledged, under-estimated and/or misunderstood by public and private policy sector workers at all levels of governance) and a thriving culture of testosterone-driven traders with their hands firmly on the throttle of oil-dependent muscle vehicles, flooring-it on shared virtual highways with silently condoned (albeit) unwritten permission and even enthusiastic encouragement to exceed safe speed limits has led to market chaos that is not theoretical but Really Real.