The Dark Knight Capital Rises

Knight Capital lost $10m a minute. Bane could learn a thing or two.

Spoilers for The Dark Knight Rises follow.

While the obvious cinematic comparison with an automatic trading system going rogue for inexplicable reasons and losing its owners $440m in just 45 minute may be the Skynet system of the Terminator series, we can't help but be a little reminded of a key scene in the apex of Christopher Nolan's Batman trilogy.

Bane, the goatse-mouthed villain who sounds like an evil Father Christmas, breaks into the Gotham Stock Exchange, kills some guy, and then proceeds to use all manner of mild technowizardry to make huge amounts of bad trades under Bruce Wayne's name, bankrupting him and forcing him to relinquish his place on the board of Wayne industries.

Now, even in the film as it stands, it's not entirely clear why actually does that, as his next action involving the board is to storm in and force them to hand over a fusion reactor at gunpoint, something which he could have done with Wayne present. Nor is it really explained why Gotham Stock Exchange didn't just roll back any transactions made in the period when a gun-toting madman was holding the exchange hostage and executing obviously illegitimate trades, as the New York Stock Exchange did after Knight Capital's algos went a bit crazy on Wednesday. 

But really, we now know that Bane didn't have to do anything at gunpoint at all. If he had just got hold of Wayne's computer-aided trading wing – and come on, Bruce built a computer which could spy on an entire city using intercepted mobile phone transmissions, don't try to tell us that he didn't do computer-aided trading – he could have lost him almost $200,000 a second in untraceable, unrollbackable, instant transactions which would have left his corporate reputation in tatters. Silly Bane.

Knight Capital itself certainly isn't doing much better than Wayne Enterprises. That $440m it's lost, from selling all the stocks it accidentally bought during its computer glitch, easily surpasses the company's entire quarterly revenue for last quarter. Its own shares were down 75 per cent on their Wednesday morning peak, and are likely to fall further today. It has made itself the target of hostile takeover rumors, and probably irretrievably damaged its reputation for being a safe pair of hands. For a company which once handled 11 per cent of all American stocks, it's an ignominious fall from grace.

Bane: Surprisingly inept at losing large amounts of other people's money.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Who will win in Stoke-on-Trent?

Labour are the favourites, but they could fall victim to a shock in the Midlands constituency.  

The resignation of Tristram Hunt as MP for Stoke-on-Central has triggered a by-election in the safe Labour seat of Stoke on Trent Central. That had Westminster speculating about the possibility of a victory for Ukip, which only intensified once Paul Nuttall, the party’s leader, was installed as the candidate.

If Nuttall’s message that the Labour Party has lost touch with its small-town and post-industrial heartlands is going to pay dividends at the ballot box, there can hardly be a better set of circumstances than this: the sitting MP has quit to take up a well-paid job in London, and although  the overwhelming majority of Labour MPs voted to block Brexit, the well-advertised divisions in that party over the vote should help Ukip.

But Labour started with a solid lead – it is always more useful to talk about percentages, not raw vote totals – of 16 points in 2015, with the two parties of the right effectively tied in second and third place. Just 33 votes separated Ukip in second from the third-placed Conservatives.

There was a possible – but narrow – path to victory for Ukip that involved swallowing up the Conservative vote, while Labour shed votes in three directions: to the Liberal Democrats, to Ukip, and to abstention.

But as I wrote at the start of the contest, Ukip were, in my view, overwritten in their chances of winning the seat. We talk a lot about Labour’s problem appealing to “aspirational” voters in Westminster, but less covered, and equally important, is Ukip’s aspiration problem.

For some people, a vote for Ukip is effectively a declaration that you live in a dump. You can have an interesting debate about whether it was particularly sympathetic of Ken Clarke to brand that party’s voters as “elderly male people who have had disappointing lives”, but that view is not just confined to pro-European Conservatives. A great number of people, in Stoke and elsewhere, who are sympathetic to Ukip’s positions on immigration, international development and the European Union also think that voting Ukip is for losers.

That always made making inroads into the Conservative vote harder than it looks. At the risk of looking very, very foolish in six days time, I found it difficult to imagine why Tory voters in Hanley would take the risk of voting Ukip. As I wrote when Nuttall announced his candidacy, the Conservatives were, in my view, a bigger threat to Labour than Ukip.

Under Theresa May, almost every move the party has made has been designed around making inroads into the Ukip vote and that part of the Labour vote that is sympathetic to Ukip. If the polls are to be believed, she’s succeeding nationally, though even on current polling, the Conservatives wouldn’t have enough to take Stoke on Trent Central.

Now Theresa May has made a visit to the constituency. Well, seeing as the government has a comfortable majority in the House of Commons, it’s not as if the Prime Minister needs to find time to visit the seat, particularly when there is another, easier battle down the road in the shape of the West Midlands mayoral election.

But one thing is certain: the Conservatives wouldn’t be sending May down if they thought that they were going to do worse than they did in 2015.

Parties can be wrong of course. The Conservatives knew that they had found a vulnerable spot in the last election as far as a Labour deal with the SNP was concerned. They thought that vulnerable spot was worth 15 to 20 seats. They gained 27 from the Liberal Democrats and a further eight from Labour.  Labour knew they would underperform public expectations and thought they’d end up with around 260 to 280 seats. They ended up with 232.

Nevertheless, Theresa May wouldn’t be coming down to Stoke if CCHQ thought that four days later, her party was going to finish fourth. And if the Conservatives don’t collapse, anyone betting on Ukip is liable to lose their shirt. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.