Some call it innovation
ResearchPuzzler recently attended the Chartered Financial Analyst (CFA) Society’s annual conference.
A Midwestern critique of low latency markets
The conference began with a presentation from NYSE Euronext, titled “Has Innovation Helped or Hurt the Integrity of Markets?” and was mostly
a defense of the status quo — other than warning about the growing share of dark pools… The changes in the industry have led to much lower transaction costs, at least in equities. That’s the one shining benefit that gets pointed to as evidence of progress. But at what cost in other ways?
Much of what we call financial services innovation is dealer bookmaking. The foundation of the business relies on prop trading. Certainly, the game of cat-and-mouse with the regulators will continue, but sometimes it seems like the regulators are the mice.
As always, those with the most power to change market structure for the better are on the buy-side. What of high frequency trading?
Without HFT, there is no market. High frequency trading firms are natural counterparties…trying to take the other side of your trade.
Not so positive
HFT firms are not liquidity providers, but liquidity takers [and quote spammers too]
Is HFT bona fide innovation?
No, I don’t think it is. Much of what we call financial services innovation is dealer bookmaking
True innovation involves a rethinking that adds value over time, not just speeding things up to clip basis points for today — and in a business where we are stewards of the capital of others, it should lead to benefits for the many rather than for the few.
ResearchPuzzler’s website has no advertising. He is a C.F.A., not a C.P.A., but he’s rarely off the mark.
Huge repositories of data collected by Internet companies are not accessible to scientists, leading some to complain that studies based on these data can’t be peer-reviewed.
I’ve worked with data throughout my career (possibly for my sins).
I’m not a data scientist, but even before BuzzData, barely a day went by where an Excel spreadsheet or CSV file didn’t end up in my inbox. Sales forecasts, cost-benefit analyses, market research, product test results, benchmarks…
Is this intended as a universal ETL? I’m not sure. It would be nice though. We could certainly use something like that.
Facebook used a clumsy smear campaign directed at Google
And was apprehended.
Let’s start with coverage from 6 May 2011 by USA Today. This was prior to any knowledge of a tie-in with Facebook:
Burson [an advertising agency] last week stepped up a whisper campaign to get top-tier media outlets, including USA TODAY, to run news stories and editorials about how an obscure Google Gmail feature, Social Circle, ostensibly tramples the privacy of millions of Americans and violates federal fair trade rules…
Google Social Circle has existed since 2009, by the way.
Pushed by two high-profile media figures, CNBC news anchor Jim Goldman and former political columnist John Mercurio, both of whom recently joined Burson… They pitched the Social Circle issue as a huge privacy breach to Google users and an important story for consumers. Burson’s efforts [were] on behalf of an unnamed client… In a May 3 e-mail to former FTC researcher and blogger Christopher Soghoian, Burson’s Mercurio offered to ghost write an op-ed column to that effect for Soghoian. Mercurio even offered in a widely circulated e-mail to help Soghoian get it published in The Washington Post, Politico, The Hill and The Huffington Post.
However, Soghoian derailed Burson’s efforts by posting the full e-mail text of Mercurio’s pitch along with his rejection on the Internet. After Goldman’s pitch proved largely untrue, he subsequently declined USA TODAY’s requests for comment.
Then have a look at the evidence visible to all on Pastebin, from the afore-mentioned full e-mail text posted by Soghoian.
Finally, The Daily Beast pulled it all together quite nicely this morning, revealing the unnamed client referenced initially by USA Today.
*All emphasis is mine
1. If you share your aspirations with people, but you lack the resources or time to make it happen you will disappoint them. Chances are you care about them, so make sure you actually have what you need.
2. Only say you will do what you know you can do. If you are not sure, let them know you can only try your best. People hire you with the hope of you delivering [what they need done] on time. You should focus only on meeting their needs, not the needs of every other guy in that industry, or the bigger picture, or what you thought would be cool—just get it done.
3. Combining pet projects with work will ruin you. Take on as few projects as you can and finish them as quickly as you can. You might want to help people, but if you distribute your efforts too thin you are not going to help anyone… Stay focused.”
Raymond writes here sometimes: Three lessons learned the hard way