Derivatives - Making of Black Shoals
Lise Autogena and Joshua Portway’s work Black Shoals, Stock Market Planetarium is a graphically explanatory installation. It can be viewed on a plasma screen at the head of a large conference table, reminiscent of a profit presentation at a shareholding company.
In the original piece, Autogena and Portway situated the financial universe of stock markets in the mysterious context of a planetarium. The work was exhibited at the Tate Modern Gallery in London, in 2001. This installation consisted of a room in complete darkness with a semi-spherical cupola, 2 metres in diameter, on which a planetarium could be seen operating in real-time. The stars were illuminated by five projectors connected to the trading information of 10,000 trading companies across the world, in real-time. To achieve a connection with the necessary bandwidth, the museum had to install a special satellite link on the roof of the building.
Black Shoals introduces the visitor to a new stellar space, the financial planetarium. A galaxy made of thousands of tiny, bright points of light, which flicker attractively. Beautiful stars float in darkness, each of them representing a real company. Some of the lights dim, and other glimmer ever more brightly. This effect is provoked by the trading rate of each company, which is conveyed to the installation in real-time. The constellations and galaxies formed by these stars, with their corresponding fields of gravity, represent the economical affinity of the shares.
The association of stars and stock markets highlights the need to navigate through capital markets. In the not too distant past, stars helped guide nomads on their journeys, and were used by lost travellers to gain their bearings. With regard to the Stock Market Planetarium, the piece may be seen as a kind of map for financiers who wander through the present-day world, a world of information.
.Black Shoals also makes an ironic allusion to the Black-Scholes mathematical formula. Fisher Black, Myron Scholes and Robert Merton developed this formula in 1973. The model permitted, for the first time ever, to quantify precisely the value of stock options. This discovery changed the history of stock markets, placing a tool of exceptional power in the hands of financiers with mathematical expertise. In this manner, it contributed decisively to the development of the Chicago options market and the so-called “ quantitative revolution” in finance. The work of these young economists led to Scholes and Merton being awarded the Nobel Prize for Economics in 1997 (Black had died in 1995).
However, the Black-Scholes formula also led to one of the most notorious disasters in the history of stock markets. In 1998, the investment fund managed by Scholes and Merton, Long Term Capital, went bankrupt with losses of nearly three billion dollars threatening worldwide financial stability. Paradoxically, these losses were attributed to the limitations of the models used by the academics. The phonetic similarity of Black Shoals and Black-Scholes underlines the abstruseness and lack of transparency of new quantitative finances. By transposing Sholes by Shoals (sand bank, shallow waters), the title makes reference to the danger that rocky coasts constitute for boats. Darkness, storms and shipwreck are the images that come to mind, and clearly point to Long Term Capital.
Black Shoals is by Lise Autogena and Joshua Portway, Danish and English media artists who live in London. The artists have worked on ambitious projects, such as Sound Mirrors, consisting of enormous acoustic mirrors installed in the coast of England and France, which can broadcast and receive the sound of the voice over long distances. Black Shoals was exhibited as part of the exhibition Art and Money Online curated by Julian Stallabrass. In 2004, it was exhibited again at the Nikolaj Centre of Contemporary Art of Copenhagen. On this occasion, the installation was assembled in an old church. The data link with market information was made by using a thick orange cable, which connected the chapel with the Copenhagen stock exchange, in the manner of an umbilical cord.
