Securities investigator Joe Kormak knew that he had to crack the case, the Attorney General was waiting. But how? He couldn’t understand the thing, let alone solve it. And having such young assistants didn’t help either
He went through it again with the two young people. “You say that guy Sheridan entered a ten billion dollar hedging trade – and forgot he did it?”
“That’s right,” said Annie brightly.
“And his machine’s forgotten too,” said Luke. “No record of the order, firm-wide.”
The two youngsters – bespectacled, pale from long hours at computer screens, and uncannily keyed in to each other’s thoughts – seemed like aliens to Joe. Was it just a generational thing?
“Look again,” he growled. “There must be a deletion log. The order couldn’t have come from nowhere.”
Joe trudged back to his office. This wasn’t just another flash crash. There was public outcry, and with an election coming the AG wanted blood. But who to prosecute? It was a perpetrator-less crime.
“I can’t keep up with today’s markets,” Joe confessed to his wife Mabel when he returned home. “Everything’s so fast now.”
“That’s what you’ve got those young people for,” Mabel said. “Your Annie has sharp eyes.”
“It’s way beyond eyes,” Joe insisted. “In fact it’s beyond physics. Do you know that electrons…? Anyway, trading’s so fast nowadays that it’s all down to cable length.”
“A longer cable is further to go,” Mabel retorted. “Electrons have to work, just like everyone else.”
She had one last word before bed. “If it’s physics you’re worried about, I thought that Luke was a physicist. Why don’t you ask him?”
Joe set out for the office meaning to ask Luke. But when he saw the pale expressionless face, he baulked at learning from his own assistant. So he browbeat Annie instead. Had she found the deletion log?
Anne hadn’t. And she had feelings about the case as well. She couldn’t believe Sheridan had done the trade because he was so upset.
“Something that size is completely outside his limits,” Annie insisted. “It would never have got through the risk gateway.”
“So where did the trade come from?” Joe demanded.
“I don’t think it was a human trade.”
“We know that!” Joe said, exasperatedly. “Nothing’s human in the markets nowadays, it’s all algo.” Didn’t his assistant know that!?
“Algos begin with human design,” Annie said. “It’s like gaming – you know it’s a machine you’re playing against, but it still feels human. This doesn’t feel like that.”
“For God’s sake, what does it feel like?” Joe was beginning to crack. “Aliens, or what?”
After a fruitless morning, Joe recalled Mabel’s advice. Reluctantly, he went to find Luke.
The young man was chewing gum, and on seeing Joe hastily scooped it into his cheek. Joe started to speak – but how could he ask advice from someone chewing gum? So he kept back the question he had been intending to ask.
Instead, he got Luke to take him through his charts of the day’s trading. The market was normal until 15:59, just before the close. Then at 15:59:21 there was a spike in order flow.
“That’s some spike!” Joe whistled. “Can you blow it up?”
Luke had a second chart showing the individual orders as vertical lines. The middle of the chart was a forest of black.
“The biggie?” Joe asked.
“Yep.” Luke shifted the gum to the other side of his mouth. “This just shows when the orders hit the exchange server. Actually, with so many orders, the message bus would have backed them up. So we don’t know when they were sent.”
“There’s no time stamp?”
Luke shook his head. The server’s clock recorded only to the millisecond. You couldn’t establish absolute time.
He pointed at the chart again. “Look at this.”
Joe peered. Some of the lines looked strange. Luke resolved the bunched area. When the enlarged image flashed up, Joe saw what he meant. At the centre of the burst, not all the lines were vertical. One curved to the right; another spiralled away off screen.
But what help was that? They were no nearer finding the culprit. Joe told Luke to put the charts away.
It was after midnight when Joe got home. No, he said to Mabel as they went to bed, they still hadn’t found who initiated the gigantic trade.
“It’s embarrassing,” he said. “Ten billion doesn’t just come out of nowhere. What can I tell the AG? He wants to string up Sheridan, but there’s no evidence.”
“Maybe the computers did it themselves,” Mabel said sleepily. “They’re clever enough.”
Joe lay awake for a while. And thought.
Finally, he rang Luke, who would still be up. “You’re a physicist, right?” A grunt came down the line. “Particles?” Another grunt.
Joe swallowed his pride. “Do you think that somehow we’re in a kind of laboratory here – atom-smashers at Cern, that sort of thing?”
His assistant’s voice came back excitedly, “Like, I’ve been trying to tell you, man! – I mean, Joe, sir…”
Joe and Luke were in the AG’s office to present the findings of the investigation. The great man sat at his desk. He did not invite them to sit down.
Feeling as if he had already been fired, Joe began.
“You have to understand, sir, that in our markets today, we have created conditions under which vast numbers of transactions collide in tiny fractions of a second, literally at the speed of light. And these conditions form a laboratory, in which entirely new phenomena can be seen.”
The AG looked grim. “This had better be good, Kormak.”
“Let me draw an analogy, sir,” Joe continued. “You may recall that in another kind of laboratory, deep underground, scientists smashed particles together at extremely high energies and were able to observe–”
“The God particle,” Luke broke in.
The AG looked confused. “This trade was an Act of God?”
“No, sir,” said Joe.
“What was it, then?”
Joe recalled Luke’s words, and repeated them carefully. “‘An emergent phenomenon generated by the extreme forces of modern markets.’”
The AG thought this over. Finally, he said, “You mean, no one is responsible?”
“Christ! That’s what I tell the public?”
Joe raised his hand. “Your honour–”
“History has been made, sir – the advance of science. A public announcement should be made, world media invited…”
The AG smiled. “Now you’re talking!”
Matthew Harrison lives in Hong Kong, and whether because of that or some other reason entirely his writing has veered from non-fiction to literary and he is currently reliving a boyhood passion for science fiction. He has published numerous SF short stories and is building up to longer pieces as he learns more about the universe. Matthew is married with two children but no pets as there is no space for these in Hong Kong.