– Thomas Skou Grindsted –
Since the global financial crises (2007-2009), we have experienced one big crash with a temporality of years and months, weeks and days. We have also experienced around ten crises in minutes, hundreds of crises in seconds, and thousands of crises in microseconds. For this reason, we experience turbulent financial worlds with crises and sub-crises in the interface between different spatio-temporalities.
This paper explores new financial technologies that have fundamentally reconfigured the spatiality and temporality of global stock exchanges. Stock markets have accelerated to a rate to which shares change hands in microseconds, and algorithms execute around half of all trades at US stock exchanges. One algorithm can carry thousands of orders in a split second. In essence, high frequency trading is non-human trading in sequences. Sequences in which algorithms take economic decision on timing, price and execution of orders, at a speed where no human traders can possibly follow.
This techno-financial acceleration, drives towards the highest possible acceleration of capitalism (the speed of light), connecting global financial centers closer than ever before. The paper examines the ways in which high frequency trading do not only reconfigure the dynamics of finance and change the global financial system in different spatio-temporal ways producing spatio-temporal information inequalities as a result and distribute crises faster around the globe, but also examine interlinkages between financial crisis and environmental crises.
The analytical heart of the chapter is located within the anthropocene debate and relational economic geography combined. Little research within financial geography interrogates with the socio-natural nexus, and even less examines new financial algorithms and environmental disasters combined. Yet, relations between the accelerating financial system and the Earth system are constituted in a number of ways by which carbonization of the atmosphere seems most intriguing. Thus, I examine the nexus between financialization, technological change and environmental disasters by addressing the way in which algorithms (HFT) respond to climate change. Accordingly, this study explains the nature of high frequency trading (HFT) strategies and market responses to natural disasters. Thus, I scrutinize convergence and divergence between global environmental change (whether anthropogenic or not) and natural disasters such as tsunamis, typhoons, draught or wild fires and algorithmic strategies at the global financial markets.
Finally, I discuss how algorithmic strategies perform peculiar forms of adaption to climate change; by managing risk in ever-smaller time fractions. Acceleration of financialization in scale and time, (outwards as well as inwards) reconfigure the dynamics under which a resource is considered to be profitable or not, hence the dynamism of which material practices are valued to be profitable in a given time-scale ratio. Therefore, the techno-finical acceleration of portfolio management both adapt to climate change by minimizing risks, while deepening and widening the social and natural disasters caused by climate change, the research concludes.