It seems that as prosecutors and the Securities and Exchange Commission were circling, someone drawn to the “veritable magnet for market cheaters” was hot for some edge, black or otherwise, about Apple iPhone sales. Read more »
Ken Griffin Strikes Fear Into The Hearts Of Citadel Employees With Long Pauses, Strange Coffee RitualBy Bess Levin
Do people who are naturally intimidating become hedge fund managers or does becoming a hedge fund manager make one intimidating? Psychologists have long looked for an answer and while the data has so far been inconclusive, years of research have given us some insight into the varying intimidation tactics– innate or by design– used at firms across the nation. You’ve got your hedge fund manager who intimidates the good old-fashioned way: by screaming at his employees and calling them idiots. The one who uses “indirect methods to get his message across” to subordinates like “retreating to his office and placing and opposing trade” or using an intermediary to hold discussions with colleagues who are sitting two feet away. And, of course, the ones who publish employee handbooks with lines like “Ask yourself whether you have earned the right to have an opinion.” And then there are the ones who can do it with just one look, a pregnant pause, and unnerving negotiation of milk froth. Read more »
The Dow Jones Industrial Average is a very stupid measure of the stock market for at least two reasons, which are (1) it is an average of only 30 big stocks and (2) it is weighted by share price, an entirely arbitrary number, rather than market cap or equal weighting or anything at all sensible. Was Mr. Dow an idiot? Probably not? He was just a guy inventing indices in 1896, when computers couldn’t fit in your pocket and were pulled by horses.1 Back then, to get a stock market average, some schmuck had to actually go look at a ticker tape for each stock price and then do the averaging on a … I’m gonna say an abacus? (Slide rule? HP 12C?) So “add up 30 stock prices and divide by 30″ seemed like a good plan; “take the float-adjusted market-cap-weighted average of 500 stock prices” did not. You can’t really fault Mr. Dow for the choices he made at the time he made them.
It is now 117 years later and nobody really uses the Dow anymore except, like, everybody, but people do use the S&P 500 index, which has the advantage that it’s a reasonable enough index of the thing it is an index of. But as with the Dow, a certain sense of “ooh the clerk is working so hard to calculate all these averages” still clings to the S&P, even though that’s obviously false. The clerk is a computer and it’s so bored calculating stock indices that it’s mining bitcoins on the side just to feel something.
I think that has something to do with this CBOE vs. International Securities Exchange dispute over S&P 500 (and DJIA!) index options. The CBOE lists such options; the ISE doesn’t but wants to. So the CME and McGraw-Hill, which together own the S&P 500 index, and the CBOE, which licenses it for options trading, sued in Illinois courts and got an injunction saying nobody else could use the index to list options. And today the CBOE finally totally won its case when the Supreme Court refused to hear it, leaving the Illinois court’s injunction in place, and thus leaving CBOE with a monopoly over derivatives on the S&P 500.2 Here’s CBOE’s gloating.
There’s no opinion from the Supreme Court and there’s a lot of goofball copyright preemption law involved; the Illinois court decided the case not on (federal) copyright law, but on … I dunno, this: Read more »
Risk is what you make of it. Read more »