www.nettime.org
Nettime mailing list archives

<nettime> Interview with Adrian Lucas, financial software expert
geert lovink on Thu, 8 Jun 2000 00:51:59 +0200 (CEST)


[Date Prev] [Date Next] [Thread Prev] [Thread Next] [Date Index] [Thread Index]

<nettime> Interview with Adrian Lucas, financial software expert


Interview with Adrian Lucas (expert of financial market software)
(in preparation of the www.balie.nl/tulipomania conference)

By Geert Lovink

Adrian Lucas works for the Zuerich based company www.qtgroup.com
which recently changed its name into Actant AG (www.actant.com).
As the website indicates this name-change "concludes the successful
transformation from pioneer market-maker to premier front-end
software vendor." Actant has developed the AQTOR software package
which makes automation of electronic derivatives possible. Apart from
being an expert in software used by stock brokers, Adrian Lucas is also
well informed about new media arts and mailinglist cultures such as
nettime.

GL: Adrian, please present us your version of what happened during this
memorable April 2000. The newspaper The Australian is using the sensational
label "crash.com". Others reject those dramatic pictures and speak of a
"market correction".  Is the bubble-burst model correct? What do you think
of the title of the conference we are organizing in Amsterdam, "Tulipomania
Dotcom"? Or the more apocalyptic analyses of  "crisis" marxists such as
Robert Kurz who is speaking of "casino capitalism".

AL: Nothing happened in April 2000, except that technology continues to
configure itself as religion. Computer screens and information appliances
are our churches; when we pray to the interface, we hear voices and receive
messages and visions. Methods of coding (C++, Java, HTML, XML, WAP,
CORBA, DCOM, OpenSource) are now religious orders, Linus of Helsinki
is our Francis of Assisi, and the alchemist's dream continues as the quest
to convert silicon into intelligence. And like any religion before it, this
movement is being helped forward by apocalyptic commentaries, which
are a kind of invisible hand feeding the evangelical scholasticism that they
ostensibly oppose. Religion, technology and criticism are all one of a kind,
in the sense that they each take themselves too seriously as authors and
authorities of belief; like money, they demand credo with no irony or sense
of humour. My preferred terms for discussing what is happening would include
"cappucino commentary", "market correctum", "dotcom diarrhoea", "casual
crash", "St. Dotcom" and "calypso capitalism".

GL: In the aftermath of the 87 global stockmarket crash we have heard
stories about computers going down, thereby fueling selloffs even more. We
have not heard anything yet about the technological aspect. What has been
the role of computer networks, off hours day trading, and improved software
in the latest events? Can we blame computer network going wild? It seems
that macro-economic factors are playing a more important role, such as the
fear of rising inflation, high oil prices, tide labor market, combined with
a ever growing amount of stock owners, big and small, who got into a craze
of bedding on tech stocks.

AL: Trying to understand financial markets deterministically is pointless.
The way to talk about financial markets is through the mathematical language
of stochastics; this may be complicated for the layperson, in which case one
should just say that one doesn't know.

GL: Can you explain us what happened to the Quantum Fund of George
Soros? Like Warren Buffett, Soros has been wary of getting into tech stocks.
He eventually did - and lost. Do you see this as the beginning of the end
for
hedge funds altogether?

AL: Every big trader finally loses bigtime, and when they do, they all
comfort themselves with the view that the good days of trading are over.
Soros' good days are over, that's all, but hedge funds are still a growing
business.

GL: How much of a believer in the Networked Economy are you? The
prophets in this sector are giving conflicting signals over the influence of
the
inflated market valuations of the IT-Internet stocks. On the one hand,
venture capitals, IPOs and market value is determining the success of these
firms. On the hand, all players in the field categorically deny to be
effected by day-to-day fluctuations and the present volatility. Everyone
knows that technologic innovation cannot be pressed out of a bunch of
youngers in a medialab overnight. Still, venture capitalists are the first
to pull the pull if there are now immediate results. Are financial markets
really interested in technology and Internet development, or is it just the
topic of the day?

AL: Professional investors are interested in high profit margins and nothing
else. In the 80's and early 90's their attention was directed at consumer
brands and pharmaceuticals; but selling consumer brands into Eastern Europe,
Russia and China has not been profitable, and once it was determined that
parallel imports were legal, pharmaceutical prices fell worldwide. So the
investors had to look elsewhere, and what was so attractive to them about
Internet as a delivery platform was the low marginal cost, almost zero, of
serving an additional client; managing scalability has always been the
essence of what successful companies are about, and here was a world where
scalability was thrown in almost for free. Of course, the growth of an
Internet-based business is still constrained; just not by the number of
clients one can serve, but by the number of clients one can acquire. What is
scary for the investor is how this cost of client acquisition seems to get
higher and higher, especially for Business-to-Consumer services, hence the
recent movement towards Business-to-Business services. My own view is that
the Dotcom's are an open Darwinian 'survival of the fittest' research lab
for the telecoms; the telecoms are building so much bandwidth capacity, and
soon they will need to fill this bandwidth with content or applications of
some sort. And one way they might do this is by buying-in Dotcoms with
proven business models, using their highly-valued stock currency plus the
cash that they can free up through headcount reductions.

GL: How would you describe the ideology of the New Economy and how do you
see it at work in the global financial sector? Is it just an extention of
the eighties neo-liberalism?

AL: In the mid 70's or early 80's, if anyone had used the term New Economy
it would have been understood to mean an economy not based on fossil fuels.
That we can use this term today without blinking shows just how capably, and
culpably, we have embraced recycling, "fuel is consumed as ever, trash is
produced as never, but we know how to recycle symbols". But the New Economy
is more than just some hypocritical and cynical extension of globalising
neo-liberalism, and it's more than just some inter-generation conflict now
fought with economic means; for it is primarily a form of disciplining
entrants to the labour market. By allowing a few very young people to
quickly become paper multi-millionaires, the New Economy disciplines an
entire generation in the thinking of business, profit and hard work.

GL:  Can you say something about a possible spin-off on the cultural sector
of the current ups and down of the financial markets? Should people who do
not know stocks, who do not work in the IT-sector be impressed? Will it
effect them?

AL: New Economy workers have to work such long hours, therefore it must be
impossible for them to ever find the time and muses to become deeply
interested in culture. The large volatility of the markets only compounds
this difficulty; if one day you are a paper millionaire, but not the next
day, your knee-jerk reaction will be to work even harder to secure that
million once and for all. The New Economy doesn't have to control culture
through censorship, instead it disciplines what should be an audience to
work instead, thereby forcing cultural institutions to trivialise their
programmes to acquire clients.

(conducted on May 8, 2000).

#  distributed via <nettime>: no commercial use without permission
#  <nettime> is a moderated mailing list for net criticism,
#  collaborative text filtering and cultural politics of the nets
#  more info: majordomo {AT} bbs.thing.net and "info nettime-l" in the msg body
#  archive: http://www.nettime.org contact: nettime {AT} bbs.thing.net