A Commonplace Book

Significantly, Johnson's paper on the subject was published in the journal Nature ("Financial systems: Ecology and economics" Neil Johnson & Thomas Lux, Nature 469, 302-303 (20 January 2011) doi:10.1038/469302a) and describes the stock market in terms of "an abrupt system-wide transition from a mixed human-machine phase to a new all-machine phase characterised by frequent black swan [ie highly unusual] events with ultrafast durations". A scenario complicated, according to the science historian George Dyson, by the fact that some companies are now allowing the algos to learn - "just letting the black box try different things, with small amounts of money, and if it works, reinforce those rules. We know that's been done. Then you actually have rules where nobody knows what the rules are: the algorithms create their own rules - you let them evolve the same way nature evolves organisms."