What we’re reading (1/20)
“Meet the Investors Trying Quantitative Trading At Home” (Wall Street Journal). “For years, ordinary people could only watch—or pay quant funds’ hefty management fees. Now, they are getting in the game. Home computers are more powerful than ever. Websites offer tutorials. Hobbyists share tips on social media. A host of books, YouTube videos and online-trading platforms such as Composer, Alpaca.markets and QuantConnect.com have sprung up to make it easier for amateurs to trade like the pros.”
“Bank Credit Is Shrinking For The First Time Since The Great Recession - And That’s A Red Flag For The Economy” (Business Insider). “A key gauge of economic health in the US has sunk into negative territory, adding credence to some of Wall Street's more pessimistic growth predictions. Bank credit levels have now fallen for three quarters in a row, according to the Board of Governors of the Federal Reserve System – the first sustained contraction since 2010. This is only the second such decline in more than half a century. The last one was during the Great Recession, brought about by the global financial crisis of 2008-2009.”
“Why The Davos Smart Set Sounds Dumb” (Politico). “It is not that the observations and arguments are notably dumb, though it is rare to hear something arrestingly smart. The signature of most conversations about current events is how emphatically commonplace they are. Business leaders, scientists, public intellectuals, cabinet ministers and the roster of operatives who accompany them all to Davos tend to be very high news consumers. Many of these people are themselves frequently in the news or have regular access to principals of government and industry. Outsiders, however, should liberate themselves from the illusion that these insiders really know the score. Their views are no more banal than the average person who also follows the news, but they are typically no less so.”
“The Phone-Transcript Mystery In The Morgan Stanley Block Trading Settlement” (Axios). “Morgan Stanley has agreed to pay $250 million after it emerged that the head of its block trading desk, Pawan Passi, had tipped off hedge funds to large upcoming sales — after explicitly promising his clients that he wouldn't do so….[t]he case sheds a tiny bit of light on how far the government will go when it's investigating a bank….[t]he statement of facts in the case includes multiple transcribed phone calls between Passi and hedge funds. But they weren't obtained easily. The wording is intriguing: ‘These calls were not recorded by Morgan Stanley, nor did they take place on a regularly-recorded line, unless otherwise noted. Rather, the Government obtained the calls described below, as well as other calls in which Morgan Stanley employees discussed block trades, in the course of its investigation.’”
“Spot Bitcoin ETFs Are Taking Wall Street By Storm. Experts Say Options Are Next” (CNBC). “Cboe Global Markets’ Catherine Clay believes options are a natural progression for bitcoin ETFs. ‘We believe that the utility of the options, what they provide to the end investor in terms of downside hedging, risk-defined exposures into bitcoin, really would help the end investor and the ecosystem,’ the firm’s global head of derivatives told CNBC’s ‘ETF Edge’ this week.”
