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Dumb Artificial Intelligence Flash Crashes Markets

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A computer algorithm (dumb artificial intelligence, or AI) crashed British Sterling during the night of Oct. 6, dropping it by about 10% before recovering 80% of the loss. While the media is focused on which person or group of persons could be behind the flash crash, there remains a failure to comprehend the bigger picture of what this and other flash crashes represent: computer algorithms, or AI, with the ability to bring markets to their knees and literally within minutes.

Dumb AIs now exceed the impact of human intelligence in market trading. My pet theory is that many — if not most — financial trading platforms have purchased the same goddamn algorithms. As Dana Carvey’s church lady would say, “Isn’t that special.”

My sweet wild-ass guess (SWAG) is that artificial intelligence (AI) algos have set the cross-market correlations too high and use too much leverage at the casino. I don’t wish to get too arcane because, frankly, I am not on the inside; but in general, it is about race-to-the-bottom currency relationships. Ultimately, this trading off of dollar-euro and dollar-yen correlations especially will be a false positive. False positives are a result that indicates that a given condition or presumption is present when it is not. A false positive, or negative, is the “oops, something’s wrong” moment for the computer programs.

I am not sure if the election is the event to trigger the false positive. It could be, because it seems to be one giant psyops and reverse psyops. I have made it known that I believe Trump is a faux candidate and nationalist fraud. Clinton is a world-class super criminal tied into the global Crime Syndicate. But I don’t surf in psyops Crime Syndicate elections. Still, either of these candidates will ultimately destroy what’s left of the U.S. and the U.S. dollar.

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The actionable event may come later with the Italian constitutional election (aka “reform”) on Dec. 4. The AI machines are likely set up to trash the euro, if PM Renzi losses and quits. This could trigger the exit of Italy from the EU, and a default. This is a huge debtor with grossly overpriced sovereign bonds. Many financial institutions are on the wrong side of this trade and only the criminal cabal has the memos on the winners. It will have the appearance of a tar pit.

downloadSo game theorizing this through, the ideal set up for SWAGing this false-positive AI event might be the “market” back to overpricing for a FOMC rate hike on Dec. 14 as we head into the Italian election on Dec.4. Right now, this is put at 69.5%, so perhaps this goes a bit higher. This creates more smoke-and-mirrors dollar strength against the euro.

If the Italian election goes to the good guys — who are portrayed in the cabal media as “bad” — then a phony AI-algo dollar rally might ensue and cause an overshoot. Then, the Yellen wolfers would back down on the hike yet again at the Dec. 14 FOMC. The resulting whipsaws and confusao might cause Sigma 6 work overs of the correlations of the type that fries the algos. That would be THE tsunami.

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