At seven minutes passed midnight on Friday, 7 October 2016 morning, unless you were partying hard, you were happily tucked up in bed, minding your own business, dreaming the dreams of a happy go lucky individual. Yet, by 00.07 and 46 seconds, without you waking up, you had lost at least a weeks wages without even knowing it. And all thanks to a newspaper article and a spooked global computerised marketplace. Here’s how.
As with all media outlets, the morning newspaper headlines are slapped onto their websites in no particular order around about midnight, when the new day is beginning. Last Friday was no exception. And, duty bound, the uploading process at the Financial Times ticked through its normal routine. As is the want in newspaper circles it did the splash/front page first and then gradually worked through the less supposedly newsworthy articles until at 12.07 and six seconds it published this wee cherub .
The article doesn’t on the face of it seem anything new or interesting. Yet it contains certain words, such as ‘tough’ and ‘hard Brexit’ and ‘crisis’ and ‘threat’ and ‘risk’ and ‘far right’ and ‘outcry’. And all this from the FT.
Now you or I wouldn’t really blink an eyelid, but if you are a computer algorithm programmed by High Frequency Traders, then this is a massive red flag that will trigger you to sell everything you have.
A High Frequency Trader is exactly what it says on the tin. Buy a share or a million. Buy a currency or a million. Move up or down a point or two and then sell to realise a small profit. Repeat a million times and you make a lot of cash.
Yet these greedy little munchkins these days has to rely on computers and their programmes to do the spotting or predicting of trends. And to do this they rely on newspapers and TV. And they rely more on tomes like the FT than the Express or Daily Star. There is just too much information for humans to take in – especially when everyone else is doing the same. And each company relies on a slightly different software with slightly different keywords.
So within a millisecond, one computer somewhere on the Asian stockmarket had picked up the FT piece, read it, seen the trigger words that had been programmed, realised the scary word were coming from a decent paper not a Dirty Desmond site, shat its pants about what it had read and sold every single pound it could lay its metaphorical hands on. It did this in the space of 30 seconds and ensured the pound against the US dollar dropped by 6% and made all the other computers and traders go gah gah and twitchy.
Within a few hours things had sort of settled. The pound was down a mere 2%, not 6. But the applecart had been flipped. Traders and ‘the markets’ (whatever or whoever they actually are) were frightened of losing massive sums of cash and the happy go lucky £v$ exchange rate was doomed to become a jittery bag of nerves until Article 50 negotiations are completed sometime in 2019.
What does this mean? Well, for a starter a 2% drop is equivalent to you losing a weeks worth of wages and, if you have any, savings, compared to anyone from another country. It means, from what every trader is telling every paper, that everything is going to get a spankload worse with the pound weakening to a banana republic currency rate. It also means, if you haven’t already bought US dollars then you will, like the rest of us jolly Brits, have to holiday in Folkestone, not Florida, for the foreseeable as you simply won’t be able to afford that abroad world where those awful immigrants live.
So Brexit caused this latest crash in UK personal wealth, but the Luddites of Brexit were also fairly astute without realising it in seeing and opposing the globalisation that can cause such hardship without a human being involved.
That is the truly terrifying bit. I hated Brexit and still do. But when a set of binary 1000111001 numbers affects how poor or rich 63million people are then something doesn’t sit well with me. As with the internet, social media and other digital stuff, it all feels like Cyberdine Technologies in the good ol Arnie Terminator films. Humans sleepwalking their way into a world where computers control destiny and not mankind. And here is a prime example – in 36 seconds you literally just slept your way into losing lots of money and yet you didn’t even realise what happened. Worse still, you didn’t even get angry when you were told what happened whilst you were tucked up in sleepytightland that cost you and your family huge amounts of cash.
Whilst we can still find Brexit a ghastly thing, this, in the end, shows that the other world can be just as bad as the one these backward looking naval gazers also see.