One major danger is that the computer algorithms have no commonsense about how to deal with a crash; they'll just sell, sell, sell. The other major problem is that those formula, the software are designed for a particular kind of economic environment - when that environment's rules change, the computers will make things worse. Without humans to monitor this, those companies will discover huge unexpected losses, and markets can crash far worse. It's a big part of why the 1997 Asian Crisis got so bad.
Post a Comment