From a correspondence with a friend about not trying to 'force life.'
"I think of golf as an example. Don’t worry about the score, only the next shot. Don’t fear missing the shot and feel grateful, but not surprised, for one well executed. You will never hit them all perfect…it is the nature of the game. Your opponent is only the course, never the person you are playing. Make sure you are never the opponent. Trust your abilities and preparation. Draw from your past successes as an indicator you can do it. Trust the numbers, and the feeling in your gut. Feel the wind, feel the grass, feel the game. Nothing else really matters. Let the outcome be what it is."
Tuesday, July 13, 2010
Q2 Earnings Season - Finally Optimism?
A few snippets that I thought interesting in the article. A view of current sentiment.
Alcoa, the biggest U.S. aluminum producer and the first company in the Dow Jones Industrial Average to report second- quarter results, rose as much as 4.3 percent as sales and profit exceeded analysts’ estimates and the company forecast stronger global demand. [Does this indicate that US aluminum suppliers are competitive with overseas low cost producers? How did they accomplish this with our higher labor costs? I wonder where their biggest customers are?]
All 10 industry groups in the S&P 500 advanced, led by commodity producers and financial firms. [commodity producers... inflation or competitive producer indicator? Are the financial firms finally getting their houses in order after the debacle? Where are the profits coming from?]
U.S. stock futures rallied before the start of trading as Greece sold 1.63 billion euros ($2.1 billion) of 26-week Treasury bills at a rate below the 5 percent charged by the European Union for its bailout package, easing concern the nation faces punitive costs to borrow.
Profits for S&P 500 companies are projected to have increased 34 percent in the second quarter and by the same amount in 2010, according to analysts’ estimates compiled by Bloomberg. Intel Corp., the biggest maker of semiconductors, reports quarterly results after the close of U.S. exchanges today. It’s among 23 companies in the index to announce results this week. [34% average. that is a huge number]
http://www.businessweek.com/news/2010-07-13/u-s-stocks-rise-as-s-p-500-extends-winning-streak-alcoa-gains.html
Alcoa, the biggest U.S. aluminum producer and the first company in the Dow Jones Industrial Average to report second- quarter results, rose as much as 4.3 percent as sales and profit exceeded analysts’ estimates and the company forecast stronger global demand. [Does this indicate that US aluminum suppliers are competitive with overseas low cost producers? How did they accomplish this with our higher labor costs? I wonder where their biggest customers are?]
All 10 industry groups in the S&P 500 advanced, led by commodity producers and financial firms. [commodity producers... inflation or competitive producer indicator? Are the financial firms finally getting their houses in order after the debacle? Where are the profits coming from?]
U.S. stock futures rallied before the start of trading as Greece sold 1.63 billion euros ($2.1 billion) of 26-week Treasury bills at a rate below the 5 percent charged by the European Union for its bailout package, easing concern the nation faces punitive costs to borrow.
Profits for S&P 500 companies are projected to have increased 34 percent in the second quarter and by the same amount in 2010, according to analysts’ estimates compiled by Bloomberg. Intel Corp., the biggest maker of semiconductors, reports quarterly results after the close of U.S. exchanges today. It’s among 23 companies in the index to announce results this week. [34% average. that is a huge number]
http://www.businessweek.com/news/2010-07-13/u-s-stocks-rise-as-s-p-500-extends-winning-streak-alcoa-gains.html
GSO Capital Partners, the credit hedge fund arm of the Blackstone Group, has raised more than $3 billion for a new fund that will provide financing to distressed middle-market companies.
Is this an economic indicator? Does this signify a thinking that things will get better? Financing/ownership of distressed, but well run companies, at favorable multiples, will lead to profits when economic activity finally turns around?
http://www.finalternatives.com/node/13148
http://www.finalternatives.com/node/13148
Friday, July 9, 2010
Google and China
As reported in the Washington Post.....
You had the impression not too long ago that Google actually had the backbone to stand up to China's goverment. Saying no to censorship and saying no to being hacked.
As Google's licence sets to expire, they have now acknowledged that the market is more important than principles. I admired Google in January. Not quite so sure now.
I suspect that there is more to the story. Washington/Beijing relations? Quid Pro Quo? Maybe this decision was out of Eric Schmidt's hands.
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/09/AR2010070902137.html
You had the impression not too long ago that Google actually had the backbone to stand up to China's goverment. Saying no to censorship and saying no to being hacked.
As Google's licence sets to expire, they have now acknowledged that the market is more important than principles. I admired Google in January. Not quite so sure now.
I suspect that there is more to the story. Washington/Beijing relations? Quid Pro Quo? Maybe this decision was out of Eric Schmidt's hands.
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/09/AR2010070902137.html
European exchanges fight rearguard action against consolidated tape
From Finextra this morning. I had to read this a few times to understand this. I suspect I still don't. As in the US, there is becoming a proliferation of execution venues across Europe. Market data is the blood of the beast and without it, investors are unable to feed their machines with the information necessary to find the the best places to trade.
What does the consolidated tape provide? Why would the regulated exchanges be opposed to it? Why are some exchanges forfeiting one of their largest revenue sources; market data?
The conclusions I draw are:
08 July, 2010 - 10:23
European exchanges fight rearguard action against consolidated tape
European stock exchanges are promising to eliminate fees on 15-minute delayed data by the end of the year as they step up their campaign against the introduction of a mandatory consolidated tape for EU market data.
Representing the views of regulated market venues, the Federation of European Stock Exchanges says the introduction of a consolidated tape would neither improve transparency nor lower costs, but would instead "pose serious threats to the competitive framework that MiFID has enabled".
The exchanges are wary of giving up control of a valuable source of revenue at a time when their income and market share is being squeezed by a host of new competitors.
In its statement, the FESE promised to eliminate fees on 15-minute delayed data, support for trade identifier and to make post-trade data available separately from pre‐trade information "at a reasonable cost".
The exchange lobby group also warned of the "unpredictable consequences" for the structure of European markets under a consolidated tape. "Gaming would likely become a fixture of the market and, instead of venues competing on the basis of their execution quality; they would compete in terms of their gaming," says the FESE. "This is not a good outcome for Europe."
What does the consolidated tape provide? Why would the regulated exchanges be opposed to it? Why are some exchanges forfeiting one of their largest revenue sources; market data?
The conclusions I draw are:
- As the name suggests, a consolidated tape is the requirement that all exchanges and execution venues report to a central authority/database the critical information about filled orders that occurred on their venues. Is other information such as depth of book, bid/ask, size also part of the requirement?
- A consolidated tape may show investors and traders that best execution quality may not really exist on the regulated exchanges. The machines will begin to see that the dark pools are really the places to trade and slowly market share will start migrating to the newer venues. Notice NYSE volumes over the last few years.
- Is the 'give away' of market data the exchanges attempt to 'buy' business. Potentially equated to a rebate. If you want access to the whole universe of liquidity, you will have to pay for the market data that drives your machines. If you trade strictly on the exchange, you may be able to do it cheaper because of the subsidized market data.
- I suspect some investors will look at their volumes, opportunity costs, commissions, and other trade cost parameters and see that best execution may cost more than just playing in the familiar exchange playground. Or maybe not.
08 July, 2010 - 10:23
European exchanges fight rearguard action against consolidated tape
European stock exchanges are promising to eliminate fees on 15-minute delayed data by the end of the year as they step up their campaign against the introduction of a mandatory consolidated tape for EU market data.
Representing the views of regulated market venues, the Federation of European Stock Exchanges says the introduction of a consolidated tape would neither improve transparency nor lower costs, but would instead "pose serious threats to the competitive framework that MiFID has enabled".
The exchanges are wary of giving up control of a valuable source of revenue at a time when their income and market share is being squeezed by a host of new competitors.
In its statement, the FESE promised to eliminate fees on 15-minute delayed data, support for trade identifier and to make post-trade data available separately from pre‐trade information "at a reasonable cost".
The exchange lobby group also warned of the "unpredictable consequences" for the structure of European markets under a consolidated tape. "Gaming would likely become a fixture of the market and, instead of venues competing on the basis of their execution quality; they would compete in terms of their gaming," says the FESE. "This is not a good outcome for Europe."
Thursday, July 8, 2010
The Rich are losing their homes
LOS ALTOS, Calif. — No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars.
Peter DaSilva for The New York Times
A home in foreclosure in Los Altos, Calif., a city where the median home price is $1.5 million.
The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.
Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.
For complete article, follow this link.
http://www.nytimes.com/2010/07/09/business/economy/09rich.html?_r=1
Peter DaSilva for The New York Times
A home in foreclosure in Los Altos, Calif., a city where the median home price is $1.5 million.
The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.
Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.
For complete article, follow this link.
http://www.nytimes.com/2010/07/09/business/economy/09rich.html?_r=1
Unified Communications in Financial Technology (IM?)
The call for unified communications is too loud to ignore
28 May 2010
By Thierry Charvet,
marketing director,
Orange Business Services - Trading Solutions
Unified communications sounds complicated. But in principle it is very simple and hinges on two factors. Firstly, a trader must be able to switch seamlessly from one communication channel to another. Imagine an employee is on the phone and decides to speak to a colleague face to face. It involves a simple process of just clicking an icon then the conversation immediately shifts to a screen on a workstation. Secondly, a truly unified communications system will automatically direct the caller to the most appropriate channel. Log off an office network and a call goes through to a mobile - without the need to set up manual call forwarding.
This flexible and intuitive approach to unified communications makes it highly suitable for trading rooms. In addition, it reflects the industry’s shift from a focus on transactional business, which has always been supported by traditional voice and turret based communications. But today, commoditised transactions are largely automated as the focus has switched to instruments. Traders focusing on complex instruments such as derivatives are turning to communication channels such as instant messaging (IM), which are familiar in the mass market, but less so on the trading floor.
From chat rooms to trading rooms
So why are traders turning to a communication channel that originated alongside chat rooms? In fact the reason that IM functions so well is due to it being a great tool for communication at the start of the trading cycle. If a trader wants to find out the price of different liquidity pools from a dozen or more contacts, rather than call each one individually, IM can be used to check who is available while also sending a group message exploring the depth of the market. Equipped with a short list of perhaps three prices, the trader then moves to a traditional voice turret to speak to the shortlist of contacts in person. IM is perfect because it supports communication in real-time or near real-time, rather than email where people tend to respond every hour or so or longer.
In fact IM is the perfect starting point for a discussion around unified communications on the trading floor because it highlights many of the opportunities for traders, as well as offering a strong reminder of issues, including compliance, associated with a new communications channel.
On the one hand, IM offers flexible fast communication. On the other, it also indicates whether someone is available or even the best way of contacting them at any point in time. A truly unified communications solution also enables the end-user to switch seamlessly from one channel to another so that a trader can escalate a conversation from text, to voice or even a video conference. At the same time, IM also supports compliance. This is not just because most systems now record written conversations, but because institutions can better comply with the need to prove best execution under MiFID.
Unified communications is helping the financial services industry evolve beyond a focus on instruments towards a new approach that centres on communities. It helps to create networks and layers of communication that map to day-to-day trades.
A triple win
There are three areas where unified communications has the potential to increase business performance. Firstly there is the opportunity to improve overall productivity, especially if unified communications is integrated with an existing CRM system. In this scenario, a window pops up with the client’s profile, recent spending pattern and risk adversity. Sometimes the challenge is that there is just too much data, but once a system that automatically pulls up the client information needed is utilised, productivity increases enormously.
Unified communications also supports greater collaboration between traders and analysts. Take the example of a morning briefing where an analyst describes pricing trends and advises the sales team on the day’s strategy. With unified communications, the briefing is recorded and automatically sent to those who cannot attend the call. There is no need to send notes or the sound file manually. Time savings as well as better sharing of information can make an enormous difference to sales performances – and the efficiency of analysts.
Then there is the eye-opening potential of unified communications to draw connected people into a real time conversation. Imagine if a trader could be automatically notified when a call that impacts their business comes to a sales colleague, which would enable themto intervene if necessary. That becomes possible with solutions that are on the market today. The transparency of communication that can now be achieved between front, middle and back offices holds immense potential for the trading business.
One of the main strengths of unified communications is that it provides a trader with a single identity that is recognised by their network, colleagues and counterparty organisations. It takes all those identities and passwords and combines them into a single entity – the trader themselves.
By replacing fragmented identities with one, employees on the move can use mobile devices or home landlines to participate in business while still complying with regulations that govern the recording of trading conversations. When a call is diverted away from the workplace, it is still recorded at the turret. Once again, it is a completely seamless and secure process.
Leading the drive to operational efficiency
The good news for the IT team is that a unified communications strategy fits perfectly with the overall trend towards growing use of session initiation protocols (Sip), which have the potential to support every communication channel from voice to video to email. By implementing a solution that supports computer telephony integration, there is an enormous opportunity to simplify infrastructures and drive down costs.
A more simple approach also means that it becomes easier to enforce security protocols and policies, whilst at the same time opening up the door to further operational efficiencies based on distributed networks, server virtualisation and cloud computing.
Whichever way this trading solution is viewed - from the front to the back office, from the boardroom to the IT team - unified communications answers many of the critical challenges that face trading institutions in the early twenty-first century. It offers more transparency, clearer messages, greater accountability and lower costs. Put simply, it is an essential platform for success in the coming decade and beyond.
28 May 2010
By Thierry Charvet,
marketing director,
Orange Business Services - Trading Solutions
Unified communications sounds complicated. But in principle it is very simple and hinges on two factors. Firstly, a trader must be able to switch seamlessly from one communication channel to another. Imagine an employee is on the phone and decides to speak to a colleague face to face. It involves a simple process of just clicking an icon then the conversation immediately shifts to a screen on a workstation. Secondly, a truly unified communications system will automatically direct the caller to the most appropriate channel. Log off an office network and a call goes through to a mobile - without the need to set up manual call forwarding.
This flexible and intuitive approach to unified communications makes it highly suitable for trading rooms. In addition, it reflects the industry’s shift from a focus on transactional business, which has always been supported by traditional voice and turret based communications. But today, commoditised transactions are largely automated as the focus has switched to instruments. Traders focusing on complex instruments such as derivatives are turning to communication channels such as instant messaging (IM), which are familiar in the mass market, but less so on the trading floor.
From chat rooms to trading rooms
So why are traders turning to a communication channel that originated alongside chat rooms? In fact the reason that IM functions so well is due to it being a great tool for communication at the start of the trading cycle. If a trader wants to find out the price of different liquidity pools from a dozen or more contacts, rather than call each one individually, IM can be used to check who is available while also sending a group message exploring the depth of the market. Equipped with a short list of perhaps three prices, the trader then moves to a traditional voice turret to speak to the shortlist of contacts in person. IM is perfect because it supports communication in real-time or near real-time, rather than email where people tend to respond every hour or so or longer.
In fact IM is the perfect starting point for a discussion around unified communications on the trading floor because it highlights many of the opportunities for traders, as well as offering a strong reminder of issues, including compliance, associated with a new communications channel.
On the one hand, IM offers flexible fast communication. On the other, it also indicates whether someone is available or even the best way of contacting them at any point in time. A truly unified communications solution also enables the end-user to switch seamlessly from one channel to another so that a trader can escalate a conversation from text, to voice or even a video conference. At the same time, IM also supports compliance. This is not just because most systems now record written conversations, but because institutions can better comply with the need to prove best execution under MiFID.
Unified communications is helping the financial services industry evolve beyond a focus on instruments towards a new approach that centres on communities. It helps to create networks and layers of communication that map to day-to-day trades.
A triple win
There are three areas where unified communications has the potential to increase business performance. Firstly there is the opportunity to improve overall productivity, especially if unified communications is integrated with an existing CRM system. In this scenario, a window pops up with the client’s profile, recent spending pattern and risk adversity. Sometimes the challenge is that there is just too much data, but once a system that automatically pulls up the client information needed is utilised, productivity increases enormously.
Unified communications also supports greater collaboration between traders and analysts. Take the example of a morning briefing where an analyst describes pricing trends and advises the sales team on the day’s strategy. With unified communications, the briefing is recorded and automatically sent to those who cannot attend the call. There is no need to send notes or the sound file manually. Time savings as well as better sharing of information can make an enormous difference to sales performances – and the efficiency of analysts.
Then there is the eye-opening potential of unified communications to draw connected people into a real time conversation. Imagine if a trader could be automatically notified when a call that impacts their business comes to a sales colleague, which would enable themto intervene if necessary. That becomes possible with solutions that are on the market today. The transparency of communication that can now be achieved between front, middle and back offices holds immense potential for the trading business.
One of the main strengths of unified communications is that it provides a trader with a single identity that is recognised by their network, colleagues and counterparty organisations. It takes all those identities and passwords and combines them into a single entity – the trader themselves.
By replacing fragmented identities with one, employees on the move can use mobile devices or home landlines to participate in business while still complying with regulations that govern the recording of trading conversations. When a call is diverted away from the workplace, it is still recorded at the turret. Once again, it is a completely seamless and secure process.
Leading the drive to operational efficiency
The good news for the IT team is that a unified communications strategy fits perfectly with the overall trend towards growing use of session initiation protocols (Sip), which have the potential to support every communication channel from voice to video to email. By implementing a solution that supports computer telephony integration, there is an enormous opportunity to simplify infrastructures and drive down costs.
A more simple approach also means that it becomes easier to enforce security protocols and policies, whilst at the same time opening up the door to further operational efficiencies based on distributed networks, server virtualisation and cloud computing.
Whichever way this trading solution is viewed - from the front to the back office, from the boardroom to the IT team - unified communications answers many of the critical challenges that face trading institutions in the early twenty-first century. It offers more transparency, clearer messages, greater accountability and lower costs. Put simply, it is an essential platform for success in the coming decade and beyond.
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