TLDR

“I couldn’t even read the whole application,” he said to guffaws from several hundred young Jewish professionals gathered sipping on spirits and kosher wine at event space Chelsea Pearl to hear his advice on how to make it in finance. “I did review part of the application, about 40 pages [out of 500], and the information we provided doesn’t make any sesne to me. How could it possibly make sense to the SEC? It’s a complete waste of time,” he added. “They don’t know what they’re looking for, the just asked for everything in every possible way…I don’t believe the Dodd-Frank law is a positive piece of legislation,” he said dryly, understating his distaste. “I ordered the bill; there are 2,000 pages. I couldn’t read the table of contents. I don’t know anyone who has read it. I think it has retarded the recovery…it’s complete gobbledygook.” [AR]

  • 03 Feb 2012 at 5:03 PM

Dealbreaker’s Senior Bookmaker Has A Few Things He’d Like To Get Off His Chest

Anonymous Sports Book Manager left academia to run a trading department at one of the world’s largest offshore bookmaking outfits. He now works onshore with his cellphone, pencil, rice paper, and a bucket of water. He’s trying to go legit as a consultant (please send job offers), but every time he gets out of the bookie business, they pull him back in.

I’m cranky. It’s probably because the Giants opened +3.5 in the Super Bowl and now it’s nearly +2.5 and I’ve taken in a lot of sharp money I don’t want. “3” is the biggest number in football. That’s a problem, and it’s put me on edge. So other stuff is getting my goat—especially stupid stuff. Like this: Read more »

Apparently lawyers at Davis Polk pulled an all-nighter reading and summarizing the Volcker Rule draft that was published yesterday. And they’re not the only people annoyed by the regulators’ refusal to get to the point:

As people drilled down into the details of the draft, many were concerned that it appeared to require very granular policing of individual traders at banks as part of the stringent, multilevel compliance regime described in the document.

“They have chosen the most burdensome way of doing it,” said Tim Ryan, chief executive of the Securities Industry and Financial Markets Association, a Wall Street trade association, in an interview.

While last night’s rule-summarizing festivities undoubtedly distracted some young lawyers from the Yankees game / general yearning for death, there may be other more consequential distractions. Read more »

  • 16 Sep 2011 at 2:59 PM
  • Banks

Let’s Just Go Ahead And Assume That Greek Letters = Evil

The fact that one lovable rogue in London misplaced UBS’s bonus pool for the year has people talking again about the Volcker rule, which would ban proprietary trading at banks. I still don’t really understand that, and I’m not alone. Here is a thing about the Volcker rule and “Delta desks” (what?):

Yet the definition of what constitutes proprietary trading can be fuzzy. Many on Wall Street consider proprietary trading, or prop trading, to involve only trades made by dedicated traders who are using the bank’s capital and do not have access to client information. The trading done on Delta desks, they contend, is done on behalf of clients.

Those boundaries, however, can blur. A bank may buy a derivative or security from a client in order to make a market, then decide it is worth hanging onto, turning it into a proprietary bet.

The Volcker rule of the Dodd-Frank act is named after Paul A. Volcker, the former Federal Reserve chairman who proposed it. It is intended to prevent American banks from taking on too much risk. The fine print, however, has yet to be worked out, and regulators are debating just how comprehensive to make the definition of proprietary.

This is sort of correct but nicely embodies the conceptual confusion that I suspect lies behind the Volcker rule. Let’s spend four hours talking about it, shall we?
Read more »

Zero Hedge points out this awesome chart in an otherwise kind of back-test-eriffic Stanford paper on credit-equity correlation trading:

The chart graphs 2003-2010 investment grade credit spreads (left axis) versus the S&P (bottom axis), with the size of the circles corresponding to the level of the VIX volatility index and the colors distinguishing the year of the observations.
Read more »