Yet the world of modern finance is increasingly dependent on automated trading, with sophisticated computer algorithms finding and exploiting pricing irregularities that are invisible to ordinary traders.
Meanwhile, Forbes—one of financial journalism’s most venerable institutions—now employs a company called Narrative Science to automatically generate online articles about what to expect from upcoming corporate earnings statements. Just feed it some statistics and, within seconds, the clever software produces highly readable stories. Or, as Forbes puts it, “Narrative Science, through its proprietary artificial intelligence platform, transforms data into stories and insights.”
Don’t miss the irony here: Automated platforms are now “writing” news reports about companies that make their money from automated trading. These reports are eventually fed back into the financial system, helping the algorithms to spot even more lucrative deals. Essentially, this is journalism done by robots and for robots. The only upside here is that humans get to keep all the cash.
Morozov suggests, reasonably, that this technology could lead to individually and instantaneously tailored news, and shows why that would be problematic.
Gawker puts one staffer on the “traffic sex work” rotation each day, and lets the rest do deeper work. So Phelps looked at a week’s numbers to see what the experiment did for traffic:
On their assigned pageview-duty days, Gawker writers produced a cumulative 72 posts — about 14 posts per writer per day. On their off-duty days — and remember, each had four off days for every “on” day — the same writers cumulatively produced 34, or about 1.3 posts per writer per day…
Those 72 pageview-duty posts produced a combined 3,956,977 pageviews (as of the days I captured data, Friday 3/9 and Monday 3/12), a mean of 54,958 pageviews per post.
The 34 off-duty posts produced 2,037,263 pageviews, a mean of 59,920 pageviews per post.
It’s only one week’s data, of course, but the deeper posts only got about 10 percent more pageviews than the bottom-feeding ones. But Phelps makes a smart argument for why the numbers aren’t the only thing that matters:
A Gawker that was only weird Chinese goats would likely, over time, bore its readers. The more substantive stories serve as tentpoles for the entire site; once in a while, they’ll blow up huge, and they’re probably more appealing to the kind of brand advertisers Gawker seeks.
Masters and others have noted that speculation can exaggerate price swings otherwise dictated by fundamental supply-and-demand dynamics, and can also force prices to move contrary to supply-and-demand predictions. During 2008, when oil prices soared to their highest level on record, they did so during a period in which global demand was low and global supply was high — what should have been a recipe for lower prices.
The most recent Fed study concludes that economic fundamentals are still the primary determinant, saying only that speculation can “exacerbate” price swings.