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By Quartz | Exploring the "new normal" in global finance

How to copy a hedge fund billionaire’s investment plan

I realized the pop culture phenomenon that is the activist investor had taken a new turn when a friend showed me an iPhone app at a party. iBillionaire lets you track the investments of “billionaire investors” whose names you know (Carl Icahn, David Loeb, David Tepper and David Einhorn among them) …

Investing

The financial crisis is taking its toll on the bankers called in to clean house

Bankers don’t usually get much sympathy after the financial crisis and subsequent series of scandals. But bankers are people too. And the human toll on financiers called in to clean up the mess is particularly acute.

The latest example of banker burnout is Hector Sants, head of compliance at …

Financial Crisis

Is your refrigerator running? Someday soon your bank may want to know

The Internet of Things—a world where most working objects are online in some fashion—promises to change everyday life and boost the economy. But who knew it could make it cheaper to buy a fridge?

That’s the conclusion of financial innovation consultants at Capco who developed a theory about how the …

Refrigerators

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Why you should care about something as boring as an accounting firm merger

PriceBoozHouse. PricewaterhouseBooz. BoozPrice. Pooz?

Those are just a few of the scintillating names that could come from combining two of the world’s biggest professional services firms, accounting behemoth PricewaterhouseCoopers, and management consulting house Booz & Company. The firms announced …

Accounting

How the “Navy SEALs” of trading are taking on Wall Street’s predatory robots

Editors’ note: This article was originally published on October 25, 2013. It explains how IEX—the firm profiled in Flash Boys, Michael Lewis’s book about high-frequency trading published today—works to neutralize the advantages high-frequency traders enjoy in the markets.

A plague of predators are …

Investing

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The Future

Dwolla’s plan to replace America’s creaky financial infrastructure now includes real-time payments

Dwolla’s mission to build better infrastructure for sending people money enters a new stage today with the first truly real-time internet payment system.

Most internet payment companies, like PayPal, Venmo, Square, and PopMoney, make money transmission more accessible to people, but remain dependent …

Payments

Dutch bankers know people hate their pay packages, so they’re giving up bonuses

There are few more emotive issues in the business world than bankers’ bonuses, defended vigorously by the financial industry and vilified outside of it.

The European Union will impose limits on bonuses for the highest earners from January, capping payouts to 100% of a banker’s base salary in most …

Rabobank

Morgan Stanley wows after a dismal US bank earnings season

The numbers: Better than expected. Morgan Stanley beat Wall Street’s expectations for both earnings and revenue in the third quarter. The bank saw revenue of $8.1 billion (excluding an accounting adjustment that’s typically ignored) and earnings per share of $0.50, up from $560 million in revenue …

Morgan Stanley

The volume of stocks traded in secret “dark pools” is soaring in Europe. What could go wrong?

The volume of shares traded outside of public exchanges is growing fast in Europe. Trades on so-called “dark pools” jumped 45% over the past six months, according to a new report (pdf) from Fidessa, a technology firm. These off-exchange venues processed €207 billion ($283 billion) in the six months …

Stocks

Goldman Sachs succumbs to “slow client activity”

The numbers: Goldman Sachs reported earnings of $2.88 per share, soundly beating Wall Street’s expectations of $2.44 per share. Although this itself renders Goldman’s earnings a “win,” it’s hard to ignore that this is also the investment bank’s worst quarter since Q2 2012. Revenue fell to $6.7 …

Goldman Sachs

JP Morgan is spending more on fines and lawyers than on employee salaries

JP Morgan devoted $9.3 billion to legal expenses last quarter, driving its net loss of $380 million. Its legal troubles took up 39% of its total revenue in the same period, by far the company’s largest single expense.

That’s right: The largest bank in the United States spends more money fighting and …

JP Morgan

Bank CEOs have a habit of turning into bank critics once they retire

Even for a straight-talking Dutchman, the recent remarks from outgoing ING chief executive Jan Hommen were remarkably frank. Hommen, who stepped down last week from the helm of the bailed-out bank, admitted to the Financial Times that the bank grew “too big to manage.”

The substance of his complaint …

Banking

Analyst notes are the latest front in the battle against insider trading

Citigroup this week agreed to pay $30 million to settle allegations that analyst Kevin Chang improperly revealed inside information about Apple’s supply chain to clients at at four different firms before his report was publicly available. It’s the latest installment of a war on “insider trading …

Insider Trading

Goldman Sachs has a problematic plan to keep its tech talent around

​(Github)

Believe it or not, Goldman Sachs is on Github. For all you non-programmers out there, Github is a platform that allows developers to write software online and, frequently, to share it with others. For banks—which have typically kept technology behind closed doors—that’s an alien concept. …

Programming

Private equity funds aren’t nearly as attractive as they think they are

Private equity firms are delusional. A record number—nearly 2,000 of them—are currently out on the road seeking more than $700 billion in fresh funds, according to new statistics from data provider Preqin (pdf).

Considering that PE firms haven’t raised anywhere near their targets since the financial …

Private Equity

Private equity just dropped $40 million on prime London real estate to shave milliseconds off trade times

Of little surprise that it looks like a fortress.(Glebe)

How do you speed up high-frequency trading (HFT) when you already have fibre-optic cables running from your firm’s servers to the data centers where all the magic happens? Private equity firms are betting that HFT firms will pay big bucks to …

Private Equity

The US Federal Reserve leaves holes through which its statements could leak out early

When journalists get early access to US Federal Reserve statements, the system has flaws that make it easy to see how the information could get out early. That’s what may have happened last week with the Fed’s surprise decision not to taper its bond-buying program. The news started to move markets …

Federal Reserve

Global wealth management: banks’ panacea or failing dream?

If there’s one kind of banking that’s been repeatedly touted since the financial crisis, it has to be wealth management. Banking, we’re told, needs to become more boring. And in wealth management, the incentives of money managers are more directly aligned with those of their customers.

But the …

Wealth Management

Once again the Winklevoss twins get beaten launching their big idea: a bitcoin trust

Mark Zuckerberg beat the twins Cameron and Tyler Winklevoss to the punch in launching Facebook. Now someone else seems to be stealing a march on their plan to launch an investment scheme for bitcoin.

SecondMarket, an American online marketplace, announced today that it’s launching a new bitcoin …

Bitcoin

Why a new rule allowing hedge funds to advertise could be the biggest change to US capital markets since the 1930s

Media outlets—ourselves included—have made fun of new rules that will allow private companies and hedge funds in the US to advertise that they’re raising money. Those rules, lifting a ban on “general solicitation,” are part of the JOBS Act passed last year, and go into effect today. But as funny as …

Investing

Wednesday’s Federal Reserve announcement was leaked, says a financial market analyst

On Sept. 18, gold futures surged nearly $20 in the 30 seconds after the US Federal Reserve released the news that it would not “taper” the monetary stimulus it’s feeding the economy. Someone made a lot of money off of that—potentially by dubious means.

According to research from Nanex LLC, a …

Federal Reserve

Here’s Jamie Dimon’s memo to JP Morgan staff. Help us annotate it

Jamie Dimon, the chief executive of JP Morgan Chase, sent the following memo to all of his employees today. In it, he vows to simplify the firm’s structure and avoid more screw-ups like those that have recently plagued the company. “Never before have we focused so much time, effort, brainpower, …

Jamie Dimon

The skeleton of Lehman walks on indefinitely

Five years after it filed for bankruptcy on September 15, 2008, Lehman Brothers still employs about 300 people, according to the company. Most of them toil on the 39th and 40th floors of the Time & Life Building in Manhattan, and their job is to wind down the failed bank’s remaining assets, …

Skeletons

The secret financial market only robots can see

What if someone told you the stock market crashed and spiked 18,000 times since 2006, and you had no idea?

That’s the contention of a group of scientists who study complex systems after analyzing market data, collected by Nanex, since the advent of high-speed trading. While the fallout of …

Trading

Bankers take the lion’s share at safer but less profitable banks

Financial crisis retrospectives have flourished over the past week, tied to the five-year anniversary of Lehman Brothers’ collapse. In this regard, the latest quarterly review of the global banking system by the Bank for International Settlements (BIS), published yesterday, is well-timed.

Of …

Banking

What if there were a REALLY different way for internet companies to IPO?

Twitter’s confidential regulatory filing yesterday for a public offering is just the latest effort by Silicon Valley to shift the rules for dealing with investors, the stock markets, and the whole IPO process. And even more radical attempts by internet firms and their investors to grab power from …

Twitter

Why a 26-year-old analyst has managed to rattle Wall Street

Kevin Kaiser, a 26-year-old analyst from Hedgeye Risk Management, is making waves.(Kevin Kaiser)

On Sept. 9, Reuters reported that Kevin Kaiser of Hedgeye Risk Management had sent shares of Kinder Morgan, North America’s third largest energy company, reeling 6%. Kaiser had emailed clients advising …

Wall Street