An automated trading operation takes too much trading and operational capital not to mention extremely low clearing rates, which are extremely hard to negotiate to easily bootstrap on your own. Not that its impossible, but its definitely much less resource-intensive to attempt to make money from building web or mobile apps.
via Codus Operandi.
Andrew Lo of MIT on the confluence of technology & finance, and what is has wrought, for good and … much less good. And, yes, John Thain is in this too.
The term Cobra effect stems from an anecdote set at the time of British rule of colonial India. The British government was concerned about the number of venomous cobra snakes. The Government therefore offered a reward for every dead snake. Initially this was a successful strategy as large numbers of snakes were killed for the reward. Eventually however the Indians began to breed cobras for the income.When this was realized the reward was canceled, but the cobra breeders set the snakes free and the wild cobras consequently multiplied. The apparent solution for the problem made the situation even worse.[2][3]
Combined with central government debt and other liabilities such as bad bank loans, analysts estimate China’s overall explicit debt load is about 70 per cent of gross domestic product.
But some analysts believe the contingent liabilities of the government are much higher, once debts on the books of state-owned enterprises and other entities implicitly backed by the state are included.
“If you take a very broad view of the Chinese government’s contingent liabilities rather than explicit debt on the books then the number comes to well over 150 per cent of China’s GDP in 2010,” according to Victor Shih, a political economist at Northwestern University in the US. The US has a debt-to-GDP ratio of 93 per cent, while Japan’s ratio is over 225 per cent.
Wall Street is being dragged into the Silicon Valley talent war as the demand for data analysts increases on both coasts of the US.
Fixnetix’s chip, called iX-eCute, is just the latest evidence that a slowdown of high-frequency trading volume hasn’t weighed on Wall Street’s rush to build ever speedier trading. If anything, the push has accelerated.
via Wall Streets Need For Trading Speed: The Nanosecond Age – MarketBeat – WSJ.
Former Goldman Sachs Group Inc. (GS) banker Hideki Furusho and a University of Tokyo professor have teamed up to create a hedge fund that invests in Nikkei 225 futures based on a computer model that analyzes Japanese blogs.
The Pluga AI Fund, which uses a web-mining model developed by Yutaka Matsuo, an associate professor at University of Tokyo, is aiming to raise 5 billion yen ($61 million) after starting with 30 million yen in August, said Furusho, the founder of Pluga Capital Co., which runs the fund. Pluga plans to target overseas investors starting from June, he said.
via Ex-Goldman Sachs Banker Starts Hedge Fund Analyzing Japanese Blog Traffic – Bloomberg.
In fact, speedy news analysis has been gaining a following among asset managers, according to Rob Passarella, vice president of financial markets for Dow Jones.
The president was told that there was no danger of doing too much fiscal stimulus, and that we should do as much as we could from an economic point of view. It was entirely clear in the meeting where this was discussed that a larger fiscal program would have larger multiplier effects. The constraints were political, and indeed the seriousness of those constraints is demonstrated by the fact that the ultimate bill that passed was between 70 and 80 percent as large as what the president sought.
via Larry Summers, Un-king of Kumbaya – NYTimes.com.
Fiscal Stimulus.