The London Time Ball

timeball[Image: The London “time ball” at Greenwich, courtesy Royal Museums Greenwich].

Thanks to the effects of jet lag getting worse as I get older, I was basically awake for five days in London last week—but, on the bright side, it meant I got to read a ton of books.

Amongst them was an interesting new look at the history of weather science and atmospheric forecasting—sky futures!—by Peter Moore called The Weather Experiment. There were at least two things in it worth commenting on, one of which I’ll save for the next post.

This will doubtless already be common knowledge for many people, of course, but I was thrilled to learn about something called the London “time ball.” Installed at the Greenwich Royal Observatory in 1833 by John Pond, England’s Royal Astronomer, the time ball was a kind of secular church bell, an acoustic spacetime signal for ships.

It was “a large metal ball,” Moore writes, “attached to a pole at the Royal Observatory. At 1 p.m. each day it dropped to earth with an echoing thud so that ships in the Thames could calibrate their chronometers.” As such, it soon “became a familiar part of the Greenwich soundscape,” an Enlightenment variation on the Bow Bells. Born within sound of the time signal…

timeball1[Image: Historic shot of the time ball, via the South London Branch of the British Horological Institute].

There are many things I love about this, but one is the sheer fact that time was synchronized by something as unapologetically blunt as a sound reverberating over the waters. It would have passed through all manner of atmospheric conditions—through fog and smoke, through rain and wind—as well as through a labyrinth of physical obstructions, amidst overlapping ships and buildings, as if shattering the present moment into an echo chamber.

Calculating against these distortions would have presented a fascinating sort of acoustic relativity, as captains and their crew members would have needed to determine exactly how much time had been lost between the percussive thudding of the signal and their inevitably delayed hearing of it.

In fact, this suggests an interesting future design project: time-signal reflection landscapes for the Thames, or time-reflection surfaces and other acoustic follies for maritime London, helping mitigate against adverse atmospheric effects on antique devices of synchronization.

In any case, the other thing I love here is the abstract idea that, at this zero point for geography—that is, the prime meridian of the modern world—a perfect Platonic solid would knock out a moment of synchrony, and that Moore’s “echoing thud” at this precise dividing line between East and West would thus be encoded into the navigational plans of captains sailing out around the curvature of the earth, their expeditions grounded in time by this mark of sonic punctuation.

Islands at the Speed of Light

A recent paper published in the Physical Review has some astonishing suggestions for the geographic future of financial markets. Its authors, Alexander Wissner-Gross and Cameron Freer, discuss the spatial implications of speed-of-light trading.

Trades now occur so rapidly, they explain, and in such fantastic quantity, that the speed of light itself presents limits to the efficiency of global computerized trading networks.

These limits are described as “light propagation delays.”

[Image: Global map of “optimal intermediate locations between trading centers,” based on the earth’s geometry and the speed of light, by Alexander Wissner-Gross and Cameron Freer].

It is thus in traders’ direct financial interest, they suggest, to install themselves at specific points on the Earth’s surface—a kind of light-speed financial acupuncture—to take advantage both of the planet’s geometry and of the networks along which trades are ordered and filled. They conclude that “the construction of relativistic statistical arbitrage trading nodes across the Earth’s surface” is thus economically justified, if not required.

Amazingly, their analysis—seen in the map, above—suggests that many of these financially strategic points are actually out in the middle of nowhere: hundreds of miles offshore in the Indian Ocean, for instance, on the shores of Antarctica, and scattered throughout the South Pacific (though, of course, most of Europe, Japan, and the U.S. Bos-Wash corridor also make the cut).

These nodes exist in what the authors refer to as “the past light cones” of distant trading centers—thus the paper’s multiple references to relativity. Astonishingly, this thus seems to elide financial trading networks with the laws of physics, implying the eventual emergence of what we might call quantum financial products. Quantum derivatives! (This also seems to push us ever closer to the artificially intelligent financial instruments described in Charles Stross’s novel Accelerando). Erwin Schrödinger meets the Dow.

It’s financial science fiction: when the dollar value of a given product depends on its position in a planet’s light-cone.

[Image: Diagrammatic explanation of a “light cone,” courtesy of Wikipedia].

These points scattered along the earth’s surface are described as “optimal intermediate locations between trading centers,” each site “maximiz[ing] profit potential in a locally auditable manner.”

Wissner-Gross and Freer then suggest that trading centers themselves could be moved to these nodal points: “we show that if such intermediate coordination nodes are themselves promoted to trading centers that can utilize local information, a novel econophysical effect arises wherein the propagation of security pricing information through a chain of such nodes is effectively slowed or stopped.” An econophysical effect.

In the end, then, they more or less explicitly argue for the economic viability of building artificial islands and inhabitable seasteads—i.e. the “construction of relativistic statistical arbitrage trading nodes”—out in the middle of the ocean somewhere as a way to profit from speed-of-light trades. Imagine, for a moment, the New York Stock Exchange moving out into the mid-Atlantic, somewhere near the Azores, onto a series of New Babylon-like platforms, run not by human traders but by Watson-esque artificially intelligent supercomputers housed in waterproof tombs, all calculating money at the speed of light.

[Image: An otherwise unrelated image from NOAA featuring a geodetic satellite triangulation network].

“In summary,” the authors write, “we have demonstrated that light propagation delays present new opportunities for statistical arbitrage at the planetary scale, and have calculated a representative map of locations from which to coordinate such relativistic statistical arbitrage among the world’s major securities exchanges. We furthermore have shown that for chains of trading centers along geodesics, the propagation of tradable information is effectively slowed or stopped by such arbitrage.”

Historically, technologies for transportation and communication have resulted in the consolidation of financial markets. For example, in the nineteenth century, more than 200 stock exchanges were formed in the United States, but most were eliminated as the telegraph spread. The growth of electronic markets has led to further consolidation in recent years. Although there are advantages to centralization for many types of transactions, we have described a type of arbitrage that is just beginning to become relevant, and for which the trend is, surprisingly, in the direction of decentralization. In fact, our calculations suggest that this type of arbitrage may already be technologically feasible for the most distant pairs of exchanges, and may soon be feasible at the fastest relevant time scales for closer pairs.

Our results are both scientifically relevant because they identify an econo-physical mechanism by which the propagation of tradable information can be slowed or stopped, and technologically significant, because they motivate the construction of relativistic statistical arbitrage trading nodes across the Earth’s surface.

For more, read the original paper: PDF.

(Thanks to Nicola Twilley for the tip!)