The Arbitrage of the Future at Present
Financial algorithms create a space of presence whose transaction speed transcends human perception. At this very moment, the notion of the present as the time of assembly, decision-making and common action capsizes and is engulfed by an automated sea of minute futures.
Under the regime of informational capitalism, a paradoxical situation accrues from proprietary transaction spaces. The future as the horizon of time to come is superseded by a technologically captured future whose horizon converges into the very present moment. Extended and at the same time withdrawn by a new mode of enclosure enforced by the black box regime of algorithmic trading, the present veers from contingent potential to the past of its own becoming. New breeds of cybernetic predication machines colonise biopolitical power regimes with the algorithmic logistics of myriads of derivative evaluations. What does this signify for the forensics of a future forum when the latter is on the verge of becoming liquidated in favor of microsecond gains derived from putatively risk-free arbitrage?
The question of a forensics concerning finance is as intriguing as it is submerged under layers of abstraction, probability calculus, access limitation, and peer networks, amongst others. The impression of mystery around the realms of microsecond transactions is heightened by the black box proprietary regime constantly defended with the apologia of free market ideology and quantitative perfection. How and why financial markets relate to the project of forensic architecture is a pressing question, as the complex interactions of networked data architecture, cybernetic logistics, aesthetics of code, and legal enclosures of property complicate if not prohibit forensic analysis brought before the public forum. This not only constrains knowledge production, as sociologists of finance lament, but has also repercussions on politics and the public forum on a much broader extent.
The exploration starts with the recount of a rare example of forensic archeology, in which a small data analysis provider – who challenged an official report by the authorised US-government agencies – created the technological-algorithmic resolution devices to unearth the actual transaction architecture of the so-called Flash Crash, the first sweeping expression of a war raging on the level of microseconds whose complexity constitutes a new frontier of biopower beyond comprehension and perceptibility.
Further research addresses the role played by (historic) data in derivative finance and the mathematical codes applied, arguing that the notion of forensic science is upended to render a quasi-evidentiary material archive of the future at hand. Its fundamental premise is the financial invention of a logistics that turns risk from insurance to productive force. The materiality of an immanent future is thus anticipated, evaluated, exploited and appropriated, or externalised respectively, by a pseudo-forensics applied on events that haven’t yet come into existence.
The future forum
The project aims at elucidating how another field is put under pressure with these reversals of time and evidence: the field of the political. The intension of this exploration is thus to show the current framework of the market and its technowledge as an incessant series of moments of rupture that are less due to contingent emergences but are rather situated on a cybernetic level of arbitrage. Contrary to uncertainty, which we cannot master per se, risk has been turned from threat to a technowledge of potentiality that renders the future by way of incorporating everything into the incessant pricing of options and their correlates. In other words, pseudo-forensics subverts the idea of the political forum and of law: Financial markets take liberty of speech and decision-making for all who cannot speak – simply because their expressions, words, actions, materializations, and commonalities cannot develop out of a presence that is derived from microsecond futures.
In the light of a practice and a terminology – both conceptual nodes of the biopolitics of financial power – in which “the market is the technology of the future” and “[t]he future is nothing but the evolution of the derivatives market” (Elie Ayache, The Blank Swan, The End of Probability, Chichester: Wiley, 2010, p. 83), the future forum will have to be a counter-future forum in order to recuperate the contingent moments of the present from the capitalist enclosure of the nearest future, among other things by making use of (instead of being used by) algorithmic processes.