jm + stock-market   3

Crash Course | The New Republic
Boeing's MCAS disaster as a parable of late-stage capitalism:
[Boeing] engineers devised a software fix called MCAS, which pushed the nose down in response to an obscure set of circumstances in conjunction with the “speed trim system,” which Boeing had devised in the 1980s to smooth takeoffs. Once the 737 MAX materialized as a real-life plane about four years later, however, test pilots discovered new realms in which the plane was more stall-prone than its predecessors. So Boeing modified MCAS to turn down the nose of the plane whenever an angle-of-attack (AOA) sensor detected a stall, regardless of the speed. That involved giving the system more power and removing a safeguard, but not, in any formal or genuine way, running its modifications by the FAA, which might have had reservations with two critical traits of the revamped system: Firstly, that there are two AOA sensors on a 737, but only one, fatefully, was programmed to trigger MCAS. The former Boeing engineer Ludtke and an anonymous whistle-blower interviewed by 60 Minutes Australia both have a simple explanation for this: Any program coded to take data from both sensors would have had to account for the possibility the sensors might disagree with each other and devise a contingency for reconciling the mixed signals. Whatever that contingency, it would have involved some kind of cockpit alert, which would in turn have required additional training—probably not level-D training, but no one wanted to risk that. So the system was programmed to turn the nose down at the feedback of a single (and somewhat flimsy) sensor. And, for still unknown and truly mysterious reasons, it was programmed to nosedive again five seconds later, and again five seconds after that, over and over ad literal nauseam.

And then, just for good measure, a Boeing technical pilot emailed the FAA and casually asked that the reference to the software be deleted from the pilot manual.

So no more than a handful of people in the world knew MCAS even existed before it became infamous. Here, a generation after Boeing’s initial lurch into financialization, was the entirely predictable outcome of the byzantine process by which investment capital becomes completely abstracted from basic protocols of production and oversight: a flight-correction system that was essentially jerry-built to crash a plane. “If you’re looking for an example of late stage capitalism or whatever you want to call it,” said longtime aerospace consultant Richard Aboulafia, “it’s a pretty good one.”

boeing  business  capitalism  engineering  management  fail  disasters  automation  cost-control  stock-market  fly-by-wire 
24 days ago by jm
SEC vs April Fool's Day
I think that materiality means what it says, and if people or algorithms do dumb things with trivial information that's their problem. But markets are a lot faster and more literal than they were when the materiality standard was created, and I wonder whether regulators or courts will one day decide that materiality is too reasonable a standard for modern markets. The materiality standard depends on the reasonable investor, and in many important contexts the reasonable investor has been replaced by a computer. 
algorithms  trading  stock  stock-market  sec  materiality  april-fools-day  tesla  investing  jokes 
april 2015 by jm
Lone Sale of $4.1 Billion in Contracts Led to ‘Flash Crash’ in May
'as the computers of the high-frequency traders traded contracts back and forth, a “hot potato” effect was created, the report said, as contracts changed hands 27,000 times in 14 seconds, but with eventually only 200 actually being bought or sold.' upshot: horrifically complex distributed feedback loops now directly impact our economies -- great :(
distributed-systems  distcomp  flash-crash  stock-market  trading  automation  via:nelson  sec  nyse  high-frequency-trading  from delicious
october 2010 by jm

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