Tag: finance

HFT

These systems are so fast they can outsmart or outrun other investors, humans and computers alike.

why is the nyt so hopelessly naive? it is quite embarrassing.

“There’s this whole world below 650 milliseconds. It’s like landing on another planet. It’s an enormous part of the market which is out of human reach. We have a glimpse of the kind of ecology that’s going on down there.”

shades of the mundane singularity. the goal of these clowns is to create arbitrage opportunities by spamming the system with requests.

A single mysterious computer program that placed orders — and then subsequently canceled them — made up 4% of all quote traffic in the US stock market last week.

the reason HFT compete on latency is because they can’t compete on price: the minimal price increment is $0.01 and it is illegal to go lower. thus we waste a lot of people on reducing latencies. we should remove the minimal price increment instead.
2013-06-04: Why is there all this bs with “business days” when you do any bank transactions? Are the computers only working 9-5? Why is it 2013 and we still acquiesce to ridiculous notions like bank transactions that take days instead of seconds? The banksters know how to do it for their HFT buddies but not for the real economy?

Finance is error-riddled

The review identified “valuation concerns” where “appraisal documentation is missing or incomplete,” or where property-assessment methods were “insufficient/lacking.” Other missing information included employment confirmations, phone numbers, credit reports and rent verification. The review also found “income calculation errors.” Another fine example of 6 sigma in banking. Imagine if Dow and Dupont ran their chemical plants like this. Holy crap. Or Boeing built planes this way. Yikes. But then again, in those industries lives are at stake. Banking. Just money. Ok a few billion 100 billion. But still, it’s not like anyone died. Sheesh.

the banking sector needs an engineering DNA, not a frat boy DNA. how incompetent do you have to be to consider error rates of 10% normal?

Against cash

This would allow the setting of negative nominal interest rates. about time some country does this.
2015-12-27: Some stats

Bills and coins now represent just 2% of Sweden’s economy, compared with 7.7% in the United States and 10% in the euro area. This year, only 20% of all consumer payments in Sweden have been made in cash, compared with 75% in the rest of the world

2017-12-28: NYT, always the luddite, calls it “jarring”. I welcome this trend.

Cashless businesses were once an isolated phenomenon, but now, similarly jarring experiences can be had across the street at Sweetgreen, or 2 blocks up at 2 Forks, or next door to 2 Forks at Dos Toros, or over on 41st Street at Bluestone Lane coffee. In Midtown and some other neighborhoods across New York City, cashless is fast on its way to becoming normal.

2016-08-20: The death of cash will make a lot of petty crime unviable: good, but it needs to come with radically lower fees.

apart from facilitating crime and tax evasion, cash hampers central banks from setting negative interest rates. In the absence of cash, everyone must keep their money in the form of digital bank deposits. During recessions central banks could then use the banking system to deliberately corrode people’s deposits via negative charges, ‘inspiring’ them to spend rather than hoard.

The emergent consensus among economic and political elites is that this is the direction to go in, but to manufacture consent for this requires a drip-drip erosion of public resistance. Hearts and minds must be shown that the change represents inevitable and desirable progress.

2023-04-21: The decline isn’t fast enough but continues despite stupid posturing like the “payment choice” act. These estimates also only cover POS, not black markets.

The Quiet Coup

The crash has laid bare many unpleasant truths about the United States. 1 of the most alarming is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the US, it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

after 3rd world infrastructure, the us takes the next step: 3rd world oligarchies.

we’re watching the most pitched, highest-stakes, most determined battle between politics and finance which has been staged. I am expecting finance to win.

Banksters

Maybe we should let banks fail. Clearly they are not any good at this money thing either.

But one man found success by tweaking the formula, prosecutors say: Rather than trying to dupe an account holder into giving up information, he duped the bank. And instead of swindling a person, he tried to rob a country of $27m. The man worked with others to create official-looking documents that instructed Citibank to wire the money in 24 transactions to accounts that he controlled around the world. The money came from a Citibank account in New York held by the National Bank of Ethiopia, that country’s central bank. The conspirators, contacted by Citibank to verify the transactions, posed as Ethiopian bank officials and approved the transfers.

2009-06-29: Banksters take all

If the world’s biggest pop star only made $25m a year in total, something’s very, very wrong. That’s the big problem behind the zombieconomy. We don’t reward people for creating, growing, nurturing, or even remixing assets. We just reward them for allocating the same old assets.

2010-11-23: Worthless Banksters

Why on earth should finance be the biggest and most highly paid industry when it’s just a utility, like sewage or gas?

2014-05-30: Banksters

2015-06-07: Better Bankers, Better Banks

That banking involves constant reminders of money also may weaken “the pull of morality,” perhaps making some bankers more inclined to be unethical. Banker identity itself encourages dishonesty. In an experiment involving employees of a large international bank, the experimenters found evidence that when “their professional identities as bank employees [was] rendered salient to them” (they were asked questions about their professional background in the banking industry), more of them [became] dishonest, cheating in reporting the results of coin tosses so as to increase their monetary payoffs than was the case with people from various other professions — making those other professional identities salient did not increase dishonesty. The experimenters also found that bankers whose banker identity had been made salient to them — and bankers most likely to have cheated — were more apt to agree that social status was “primarily determined by financial success.”

2015-08-15: 4 ka Banksters
Not sure whether I should feel ecstatic how much we knew 4 ka ago, or depressed that we haven’t moved past: banksters are still a thing.

“But during one 30-year period — between 1890 and 1860 BC — for one community in the town of Kanesh, we know a great deal. Through a series of incredibly unlikely events, archaeologists have uncovered the comprehensive written archive of a few 100 traders who left their hometown Assur, in what is now Iraq, to set up importing businesses in Kanesh, which sat at the center of present-day Turkey and functioned as the hub of a massive global trading system that stretched from Central Asia to Europe. Kanesh’s traders sent letters back and forth with their business partners, carefully written on clay tablets and stored at home in special vaults. 10Ks of these records remain. One economist would love to have as much candid information about businesses today as we have about the dealings — and in particular, about the trading practices — of this 4000-year-old community.

“The picture that emerged of economic life is staggeringly advanced. The traders of Kanesh used financial tools that were remarkably similar to checks, bonds and joint-stock companies. They had something like venture-capital firms that created diversified portfolios of risky trades. And they even had structured financial products: People would buy outstanding debt, sell it to others and use it as collateral to finance new businesses. The 30 years for which we have records appear to have been a time of remarkable financial innovation.

“It’s impossible not to see parallels with our own recent past. Over the 30 years covered by the archive, we see an economy built on trade in actual goods — silver, tin, textiles — transform into an economy built on financial speculation, fueling a bubble that then pops. After the financial collapse, there is a period of incessant lawsuits, as a central government in Assur desperately tries to come up with new regulations and ways of holding wrongdoers accountable (though there never seems to be agreement on who the wrongdoers are, exactly). The entire trading system enters a deep recession lasting more than 10 years. The traders eventually adopt simpler, more stringent rules, and trade grows again.”

2017-02-12: Bankster gets robbed

It took Navinder Singh Sarao a long time to accept that he might have been scammed out of $50M. Stuck in London’s Wandsworth prison, wracked with anxiety and unable to sleep, the realization dawned on the man dubbed the “Flash Crash Trader” as slowly as spring turned to summer outside the barred window of his jail cell.

The trauma of the past few weeks had been difficult to process. On April 20, 2015, the slight, doe-eyed 36-year-old had dozed off peacefully in the same suburban bedroom he’d slept in since he was a boy. The next day he was arrested and taken to a police station, where he was charged with 22 counts of fraud and market manipulation carrying a maximum sentence of 380 years.