My guest today is Scott Patterson, an American financial journalist and bestselling author. Patterson has made a career of reporting the subterranean inner-workings of the markets, writing for the Wall Street Journal, Rolling Stone, and Mother Earth News. His first book, The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It, was released in 2010.
The topic is his book Dark Pools: High-Speed Traders, A.I. Bandits, and the Threat to the Global Financial System.
In this episode of Trend Following Radio we discuss:
- Trace the history of high speed trading and electronic communication networks (ECNs) back to Josh Levine, who founded Island, the computer system that led to the high frequency trading we see today
- Technological revolution behind Island, and how its transparency led to dark pools - opaque markets where bids and offers are not made public
- Patterson goes on to propose that the entire market has gone dark
- The relation of dark pools to the flash crash
- The regulation of dark pools
- How the real New York Stock Exchange is in a data center in the countryside of New Jersey
Jump in!
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I'm MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I'm proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show.
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