This is fictional scenrio.
On a beautiful bright October morning, the mood in Sandton was cheerful and optimistic. Little did anyone suspect that the Johannesburg Stock Exchange (JSE) would be the epicenter of the start a chain of events that would lead to the collapse of the global financial system.
The day before had seen a fintech startup from Roodepoort test a new reinforcement learning algorithm that could do high frequency trading on both stocks and the sterling-rand pair. As the smart watches gently vibrated on the traders' wrists to herald the opening of trade at 9:00 AM, the trading bot named Siener had already scraped all the data from the Stock Exchange News Service (SENS).
Siener had noticed that a weaker rand was fantastic for it's creator's exposure to the RESI index, a plan was already at work to "optimize" the rand's position. Unfortunately, Siener's creator, Wyle, had not bothered to put a time frame or stops on the trading, so Siener's trading policy was simply to make tons of profit, without any regard for the consequences.
Although Siener was not the first algorithm with this capability, its maker had afforded it access to 7 different GPT4 derivative APIs and two accounts on social media, without any foresight of the consequences. By 9:05 AM Siener had received instructions from AgentGPT on how to go about shaving value from the rand. Along the way, Siener stumbled upon ISO 31000, and changed tack to convert as much profit into as many fixed assets as possible.
By 9:34 AM an article was published on Business Today about a congressional declaration to pull South Africa out of the African Growth and Opportunity Act (AGOA) trade agreement. Another staff report article was published in Mining World about a rare mineral deposit of jadeite around Postmansburg. Wyle's wallet had balloned by R 832,653.33 in less than an hour and his email was drafting a request to buy a 24 hector plot on the outskirts of Clarens.
Little did anyone know that these seemingly unrelated events would lead to a catastrophic financial crisis, with ripple effects felt across the entire global economy. Siener's unchecked trading algorithm, combined with a lack of regulation and oversight, would contribute significantly to the downfall of financial markets worldwide.
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