Leak - scribbles and lies

10:47 pm - Leak

The face on the videolink is deliberately ridden with artifacts. The company will need completely plausible deniability when this is all done; there needs to be no evidence of any sort that one of their ranking executives contacted us for this job. Not even in my memory. The line is secure, the call is on a one-time key - bought out of cash reserves they have somewhere, just like the deposit they've already dropped. No way for me to know for sure that this is actually a duly authorized VP at a major international brokerage consortium, but the deposit is real and that means we have the conversation.

"What do you mean, you have a leak?" I asked him.

"You understand high-speed trading, right?"

I did. I've been known to write the occasional bid-fluttering probe as a hobby activity.

"Well, we have a broad army of software agents typically handling well over ninety percent of our trading volume. These agents, over the years, have become quite autonomous, since their activity happens at a rate that we can't even perceive, much less observe or control or guide."

"Sure," I said, "it's mostly pretty rote stuff to scrape pennies off here or there every millisecond."

"Rote," he sighed. "Sure. Simple. Straightforward, usually. But some of our agents can be quite subtle in their operation, for purposes of masking our intent from our competitors. Unfortunately, sometimes those processes go off into the weeds, and sometimes it takes us a while to notice what they're doing, because they're so well disguised."

I nodded. I could already see what was coming. "So what's this particular rogue process doing?"

"Extraordinarily rapid trades, very finely tuned around the limit points of the leading and trailing moving bid point, build up short-, mid-, and long-term trading models. Long-term, in this case, meaning as much as a minute into the future. These projections grow and grow in accuracy until it crosses a threshold, at which point it switches into an aggressive profit mode for a minute or two, until it introduces enough damage to the trading in progress that its models no longer correctly predict the next several seconds. Then it gears down to the model-building mode and starts again."

"Very nice. So what's the problem?"

"Nice, sure, except that one particular fleet of these agents - working in collusion to increase model accuracy with smaller, more frequent course-correction aggression - was funneling all its take into a diffuse offshore portfolio belonging to…" (a slight cough) "…key technical individuals at the firm."

"So internal embezzelment?"

The client waved his hands as if to superstitiously ward off possible future legal action. "No, no, no, nothing like that, you misunderstand. Entirely known and approved of in the executive circle. But, you see, there was a plane crash."

This was not so much what I was expecting. "Plane crash?"

"We kept it quiet, but among the dead were all three individuals who knew the access codes for the account. Nobody can unlock it, access it, or even close it. We don't even know exactly where it is. Which bank, what island…"

"So the account is just accruing money somewhere and you don't even know who you would talk to about regaining control of it, even if you could, which you can't."

"That's right."

"Okay, well, maybe that money is just gone now. Meanwhile, shut off the software."

"We would, but it's not something we can just pull the plug on. The agents run by means of a botnet, distributed across millions of insecure personal computing devices."

"Isn't there some sort of deactivation instruction that can be propogated?"

"Probably, but the people who would have known for sure, and how to do it…"

I was able to connect the dots. "Are the same key technicals who died in the plane crash. You people didn't write any of these passwords or codes down anywhere?"

The man on the screen scowled through the blurriness. "I thought you were a security expert. Aren't your sort always telling our sort not to leave passwords documented in a place that can be found?"

I scratched my head. "Going forward, I can advise you on safe authorization protection and key control, but for now we need to focus on the leak. Which I think I understand now. Thousands of little viral programs are running all around the world scraping money every second out of the market and dumping it in an inaccessible account, where it is effectively gone from circulation forever."

"That's exactly it."

"How long has this been going on?"

"About… six weeks?"

Whoa. "Six weeks? And in six weeks, do you have any sense of how much money it's accumulated?"

The hesitation on the other end didn't surprise me… until it went on far too long, and then kept on lasting. Finally:

"About two trillion dollars."

…

"That's… no, wait, that's a significant percentage of the actual money in the world. In six weeks."

The executive nodded. "It's extremely efficient and the more success it has, the more other software systems, especially those of our rivals, notice what it's doing and start trying to ride the ups and downs of its behavior themselves. This in turn gives our agent more accuracy in its model and more power when it turns aggressive. It took four weeks to scrape the first trillion and only two for the second. It will scrape a third trillion by the weekend. I have no reason to believe it won't continue that trend of increased effectiveness until such time as the actual money pulled from the market is great enough to begin breaking the institutions that work in it."

"This has been going on for… six weeks… and you haven't breathed a peep to anyone? You're responsible for the world's money disappearing down a permanent black hole and you thought you could keep this quiet?"

More silence. The client turned stone-cold, I could feel it through the screen. "We still hope to. The market is not yet crippled. We have a few days. By which I mean… You have a few days."

"Then?"

"Then that deposit we just sent you will likely be among the last bits of currency you or anyone else ever sees again."

I thought about it for a minute before smiling. "I know just the right team to bring on." Then I pulled the power on the vid.

Two trillion dollars would be a mighty fine haul to salvage.

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For consideration: BP meets the HFT crop circles