‘Flash Boys’ Resonates as Survey Finds High-Frequency Concerns (Bloomberg)
More than two-thirds of financial industry participants, 70 percent, say the U.S. equity markets aren’t fair for all, according to a survey conducted by ConvergEx Group LLC, which provides brokerage and trading-related services. Just over half, 51 percent, also said high-frequency trading is harmful or very harmful.
Facebook CFO Ebersman to Step Down Two Years After IPO (Digits)
Mr. Ebersman is leaving June 1 and being replaced by David Wehner, who joined Facebook in 2012 from Zynga to become the company’s vice president of corporate finance and business planning. Mr. Ebersman joined Facebook in 2009, leading the company into its initial public offering in May 2012. The former Genentech finance chief says he is returning back to the healthcare industry, without disclosing where.
Ratings Firms Ride Bond Resurgence (WSJ)
Six years after getting a failing grade for their role in the financial crisis, credit-rating firms are at the top of the class. Riding a global bond boom, the two biggest U.S. firms, Standard & Poor’s Ratings Services and Moody’s Investors Service, this month are expected to post record first-quarter profits. Fitch Ratings said in its annual filing this month that 2013 was “one of its best years ever.”
Investors Embrace ‘Catastrophe Bonds’ (WSJ)
With the U.S. hurricane season about a month away, insurers are issuing “catastrophe bonds” at the fastest clip since before the financial crisis. Insurers sell the bonds to help cover potential claims from hurricanes, tornadoes, earthquakes and other major insured risks. While losses on so-called cat bonds have been rare over the years, investors can forfeit both interest payments and their principal if disaster costs exceed designated levels, which gives insurers the right to tap the funds. The bonds have floating interest rates and are usually paid off upon maturity in three or four years. Cat-bond issuance in the first quarter more than doubled from the year-earlier period, to $1.2 billion, and second-quarter issuance is expected to hit an all-time high above $3.5 billion, according to Willis Capital Markets & Advisory. More than $2 billion of deals have closed or been announced this quarter, Willis said.
America’s First Cat Café is Popping Up in NYC This Week (Eater)
Pet food brand Purina ONE is opening a pop-up cat café at 168 Bowery this Thursday. For those unfamiliar, a cat café is a coffee shop populated with cats for customers to play with. It’s all the rage in Japan and Europe, and enterprising cat-lovers in San Francisco, Oakland, Portland, LA, Vancouver, and Toronto are racing to open cafés of their own. But with this pop-up, New York will become the very first North American city to actually get a cat café.
Can Herbalife cure a brain tumor? ABC investigates (CNBC)
Nearly 600 independent distributors of the diet and nutrition sales brand Herbalife were disciplined last year for making medical claims when selling the company’s weight-loss shakes and supplements, despite company policies to prevent such tactics, ABC News reported. The internal numbers were revealed by Herbalife after an ABC News undercover investigation found numerous examples of distributors boasting to potential customers that the company’s products helped treat maladies ranging from diabetes to heart disease. According to ABC News, a Staten Island, N.Y., Herbalife distributor told a potential customer — who was an ABC News reporter wearing a hidden camera — that a woman with a brain tumor became symptom free after starting on Herbalife products. Herbalife executives told ABC News that the company had taken pains to prohibit such tactics.
Buffett: Saying no to pay plans is like ‘belching’ (CNBC)
Warren Buffett said in his 55 years as a director he has never heard anyone say in a board meeting they were against a pay plan put forward by a company’s compensation committee. In a live interview on CNBC, Buffett admitted he had voted for compensation plans that he didn’t like. “Taking on a (compensation) committee is a little bit like belching at the dinner table… You can’t do it too often. If you do, you find you’re eating in the kitchen pretty soon.”
New York Financial Regulator Uses Dodd-Frank to Sue Auto Lender (Dealbook)
Dodd-Frank, which was put into place after the financial crisis, contains provisions that prohibit deceptive, abusive or unfair practices by financial companies. It also allows state regulators to enforce those provisions and grants them broader authority than they would have under state law. Mr. Lawsky’s complaint, filed in Federal District Court in Manhattan, contends that the Condor Capital Corporation, a subprime auto lender based on Long Island, siphoned millions of dollars away from the accounts of unwitting borrowers. To do this, the company would shut down borrowers’ access to online accounts after a loan had been repaid, leaving them unable to see whether an insurance payoff, overpayment or other transaction had left excess money behind, according to the suit.
The Dumb Way We Board Airplanes Remains Impervious to Good Data (BusinessWeek)
While airlines policies vary—there is no standard accepted way of loading passengers—any “eye test” indicates that having travelers line up at the gate, only to wait again inside the plane, isn’t efficient. Data back this up: Boeing’s (BA) research showed that boarding a plane was 50 percent slower in 1998 than in 1970. “Boeing believes that these trends will continue,” the study noted, “unless the root causes are understood and new tools and processes are developed to reverse the trend.” From a data-driven perspective, this is nothing short of maddening. There are many ways to board a plane, with “back-to-front”—the chosen boarding process of most U.S. carriers—the slowest. It is so ineffective that timed research shows that simple random boarding ends up being faster.
Now You Can Hire a Prostitute Like You Hire an Uber (Atlantic Cities)
If a German app launched this month succeeds, smartphones could well be the next big marketplace for prostitution. Not unlike Uber for sex workers, the Berlin-based Peppr app uses GPS to connect potential clients with prostitutes in their immediate area. Prostitution is legal in Germany, and the app’s declared intention is to save prostitutes from having to pound sidewalks for customers. It was created by Austrian developer Pia Poppenreiter…who came up with the idea after seeing sex workers out of doors on a cold night. “The story always sounds corny, but it’s true,” she told German start-up magazine Grunderszene. She continued: “On a late autumn day in Berlin, I was on my way with a friend to a bar on Oranienburger Straße. It was cold – I had a skirt on myself – and I saw a sex worker on the street. I thought, “It’s crazy that there’s an app for everything, but not for that. Why do they have to stand there in the winter all day?” That thought has never left me.”