There’s always some trader who’ll find a way to lose a couple billion dollars, no matter what kind of risk management software Wall Street installs on its servers. Tape the phone calls, monitor the emails, and somehow they still get around the safeguards.
Well, a columnist for American Banker has been giving the problem some thought, and he’s decided the solution is Google Glasses.
Guess the guys on Wall Street were feeling a little left out: Earlier this week, the S.E.C. signed off on official company announcements via social media (as long as shareholders are warned in advance where to look). And now, Bloomberg L.P. has announced that it will integrate tweets into the stream of information pulsing through the terminals that grace desks all over the financial industry.
Like everything else on the Bloomberg terminals, the tweets look butt-ugly.
Sex Drugs and Code
Provigil, the Adderall-like drug used to combat sleepiness, is experiencing a resurrgence fit for our maximum-efficiency lifestyle. Back in 2008, TechCrunch cofounder Michael Arrington penned a post about how Silicon Valley entrepreneurs were increasingly using the prescription pill to stay awake for long periods at a time and focus better. Now, New York Magazine reports Provigil is making a comeback among traders and entrepreneurs, some of whom affectionately refer to it as “Viagra for the Brain.”
Silicon Wall Street
“That’s not Jamie Dimon,” joked Adam Sodowick, founder and CEO of True Office, as an avatar in his game walked onto the screen. However, Mr. Dimon’s employer, J.P. Morgan, was one of the 12 banks that mentored the FinTech Innovation Lab participants who demoed their products to potential investors and senior executives in the financial industry Wednesday morning at Credit Suisse. (Duh, “FinTech” stands for Financial Tech–get in the game!)
True Office was one of six companies who participated in the three-month long mentoring process, during which these FinTech entrepreneurs presented their products to and received guidance from key executives in the banking industry. True Office is a mobile game that allows companies to conduct more interesting and engaging compliance training.
“This is a very large and deeply unsexy market,” Mr. Sodowick said about compliance training. “It is akin to getting a flu shot.” But TrueOffice makes the training a game, arguably incentivizing users to pay attention and learn from the process. People may even end up reading the company’s policies, where they would inevitably learn that it is, in fact, unethical to lie about your Computer Science degree.
Following the Money
“The End of Wall Street as They Knew It,” proclaims the headline on the cover story of New York magazine this week, an epic account of the woes of post-crash bankers. The masters of the universe have had their bonuses slashed, the story says, due to the suffering economy and the provisions of the Dodd-Frank financial reform legislation. The industry also cut 200,000 jobs. Where’s a young, mathematically inclined valedictorian to turn?
“If you’re a smart Ph.D from MIT, you’d never go to Wall Street now,” one hedge fund executive told the magazine. “You’d go to Silicon Valley. There’s at least a propsect for a huge gain. You’d have the potential to be the next Mark Zuckerberg. It looks like he has a lot more fun.”
One of the reason that Bernie Madoff was able to stay undetected for so long was that he could alternately charm and intimidate the young SEC staffers sent to investigate his firm. In the wake of that scandal, reports The Wall Street Journal, the SEC has developed a computer system that analyzes performance from thousands of hedge funds and looks for unusually good performance year-over-year that, like Mr. Madoff, seems too good to be true.
Dear Startup Abbey
As Betabeat has been pointing out, Occupy Wall Street presents sort of a gray area for Startupland. Sure, both parties waive their anti-corporate banner proudly and the rhetoric of disruption can be used interchangeably. But bootstrapped, self-interested Ayn Rand-o-philes and Zuccotti Park’s concern with economic inequality don’t necessarily see eye-to-eye.
Thankfully higher authorities have decided to weigh in on one problematic area. In fact, the entire Ethicist column in this weekend’s New York Times magazine is devoted to it.
Amazon.com’s quarterly results are out, and OMFG THEY POSTED A PROFIT DECREASE! Why? Because they priced that fancy new Kindle Fire thing on the cheap, is why. People are freaking out, an analyst gave them a “sell” rating, and their shares are dropping. Are people overreacting?
Tech Bubble Watch
If you followed the downward trend of tech stocks like LinkedIn, Pandora, and Zillow in the media yesterday, chances are, at some point, you had to avert your eyes. USA Today uses no less than four foreboding verbs to describe how all three newly-public tech companies performed Monday after the S&P demoted America’s credit rating down to AA+:
“Shares of professional social network LinkedIn plunged 17%, to $75.47. Internet radio company Pandora tumbled 8% to $12.49. Real estate website Zillow crumbled 7% to $26.09. That came as the Dow skidded 635 points.”
Based on just that day of trading, Geoff Yang, a partner a Redpoint Ventures, told the paper, “The sound you just heard was the IPO window slamming shut.”
Made In China
Investment in information technology (read: data centers and developer salaries) fell hard in 2008 and 2009 but is trending back up in a big way, according to a new forecast by London-based global market research agency Ovum. ”Spending on IT by the financial markets industry will hit almost $90 billion by 2015, driven by strong growth in Asia-Pacific and a bounce-back in the hedge funds sector,” according to a press release.