Wall Street & Trading

I just finished Karen Ho’s “Liquidated:  An Ethnography of Wall Street”.  It tied together various experiences I had daytrading from 1998-2002 and 2006-2007 and the recruitment sessions that big banks and consulting companies would have for Georgetown Master’s students.

Some things the book helped to confirm:

1) Time differentials.  Wall Street works very often 100-120 hours a week.  This doubles the minimum hours worked by corporate America.  So that affects time scales; Wall Street is constantly trying to create profit through liquidity and exchange and deals.  Corporate America works on a much slower timeline, to create products or services.  It is a more human scale.  Wall Street works not for salary but for bonuses, which are created through quantity and size of deals.  It doesn’t get compensated for long-term corporate success.

2) A large number of students from Ivy League Plus schools chase the money into finance.  They get paid a fortune if they can cut it.  But the net loss is to society — these brilliant minds do not seem to be employing their money back into philanthropic pursuits, ambitious programs, or bettering the world.  The money is put into unsustainable, wasteful lifestyles which the east coast thrives off of. (read the Washington Post’s article about Rhodes Scholars herding into finance)

3) CEOs and executives care about “shareholder value” and the stock price, but these things are no longer linked to the internal health or long-term success of a firm.  It is corporate raiding.

4) Wall Street is transferring wealth away from those who create it, by facilitating “deals” which leak commissions to the banks.  How many deals have you seen executed by public companies lately which actually make any sense?  Remember AOL and Time Warner?  That was the pinnacle.

5) Wall Street wasn’t destroyed in 2007 — it did what it always does; quickly it reinvented itself, laid people off, and adapted.  No other sector is able to reconstitute itself so quickly. It does this by pursuing talent at any cost.  It recruits the best, unattached minds in the nation from the top universities, and promotes a cult of personality of “smartness” — you will be among the best people if you go to work on Wall Street.  I saw the degree to which Wall Street pursues talent; one of my classmates at Georgetown had a standing job offer even throughout the 2007-2008 financial crisis!

6) Downsizing is good to Wall Street. If a company lays off workers, this means the company is reducing its overhead.  Wall Street does not care about Main Street.  It pulls from the elite, and the job does not care about how Main Street is doing or whether workers are suffering.  Wall Street enjoys higher unemployment as long as productivity increases and costs are reduced — and as Professor Ho points out, this job insecurity mirrors what Wall Street is constantly under the threat of.

7) Even within Wall Street, there is segregation. Cost center people, like support staff, take different elevators within buildings than the people who make the profits for the banks.

8) Investing in the stock market is a sucker’s game.  Owning stock in a company is not worthwhile, because common stock is so diluted that it doesn’t constitute any sort of ownership in the firm (and Professor Ho points out it never did).  The stock market is its own entity and should be treated as a quick trading vehicle:  volatility and liquidity are the only things that matter.

9) Neo-liberal economic theory permeates Wall Street, but it is unsustainable for most people.  While Wall Street is made up of the best and brightest who easily transition from job to job, Main Street would not be able to withstand this “creative destruction”.

This is a sobering book, but also a fascinating move for anthropology:  I think most people associate anthropology with studying small, backwards, tribal groups.  But this studies incredibly modern, adaptive Wall Street tribes.

As a citizen I’m deeply concerned about how easily the finance sector controls what happens in this country, and even President Obama has succumbed to a lot of the banks’ demands.  What’s worst is that finance is intellectual magic to create new ideas and derivatives and “products” while the actual economic base of development in the US has taken a back seat.  How long can that last, with our greatest minds essentially creating nothing but instability, instead of new technologies, theories, and breakthroughs?

2008 Book Reading

I read 50 books in 2008 after setting a meager goal of 20 books.  I was assuming that I would be too slogged with schoolwork, which was for the most part true.  I read a ton of books over the summer, though.

This year, in 2009, I am setting a goal of 40 books.

Below is a list of what I read in 2008.  The list isn’t really a good reflection of the reading I’ve done.  Some of the things below aren’t proper “books”.  I’ve also read probably thousands of blog posts, hundreds of news articles, and many long documents for school.  Perhaps one cool app would be to calculate roughly how many words one reads a day.

The number before the book info is my rating from 1 to 10.  I tend to vote higher for what I consider to be original ideas or research…although sometimes I get really bored with some books and rate them lower as a result.

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Imprinting

I opened up a Shelfari account and populated it with most of the books I’ve read from 2005 on — I don’t have a list of what I read before then.

It’s quite an easy service to use. Search for your book and edition, then add it to your shelf. Then add in some other metadata about it easily. I have little interest in writing reviews for books because that would take too long — I never wrote reviews on Amazon.com either. I guess I don’t have enough particular experiences from a book (save for the passages I dog-ear that I wish I could digitally copy into my computer or something) to want to write about it.

Contrast this with Yelp, which I just started using to rate and review stores and restaurants in the US. My dining and shopping experiences are very particular and very keyed in to all my senses, whereas a book isn’t. So I’ve felt like writing quite a few reviews on Yelp.

But one thing I noticed at Shelfari was that they show your books from the front cover art. I thought this was dumb at first, since you can’t display as much data quickly as you could if you just had a list of text.

But then I realized that I identify a lot of books purely from the cover art. It irks me in fact to see older cover art, or modified cover art for re-issued books. The cover is as much a part of the book as what’s in it, in terms of identifying it.

When I go abroad to Europe, all the books have different cover art in the bookstores and it really throws me off. It’s like reading in a different language you’re not fluent in — I have to slow down and read each book title instead of glancing at the cover and knowing what it is.

Here’s a quick experiment. Take the paper cover off your hardback books and look at that ugly hard cover that it has underneath. The book’s meaning and feel change completely.

I thought about how this affects experiences in e-books and on the Kindle. Books sort of become faceless through digital readers because you don’t see the cover every time you open the book. It’s just another digital file. Is there some way to replicate the experience through good design?

I then thought about whether music albums have this same imprint. I have not bought an album in ages — I download a lot of my music. So I don’t even really know what the cover art looks like for the music I listen to.

But that doesn’t matter because the personalities I listen to have large media presences and style themselves in flamboyant and stereotypical ways. I know my music through photos and TV. I also know my music through the way a band sounds — you can identify music pretty quickly from the guitarist’s sound or the voice of the lead singer.

Maybe albums need to take a cue from the visual imprinting of a book’s cover art and develop a musical imprint to put on albums and songs and artists.

This is essentially creating a brand appropriate to the media it promotes. Can I brand my web site better? Can I brand “Ben Turner” better?

Quote of the Day: Feb. 28, 2006

From Neal Stephenson’s Snow Crash:

“Hiro, you are such a geek. She’s a woman, you’re a dude. You’re not SUPPOSED to understand her. That’s not what she’s after. She doesn’t want you to understand HER. She knows THAT’S impossible. She just wants you to understand YOURSELF. Everything else is negotiable.”

“You figure?”

“Yeah. Definitely.”

“What makes you think I don’t understand myself?”

“It’s just obvious. You’re a really smart hacker and the greatest sword fighter in the world — and you’re delivering pizza and promoting concerts that you don’t make any money off of.”

Quote of the Day: Feb. 27, 2006

From The Great Influenza:

“As Einstein once said, “One of the strongest motives that lead persons to art or science is a flight from the everyday life… With this negative motive goes a positive one. Man seeks to form for himself, in whatever manner is suitable for him, a simplified and lucid image of the world, and so to overcome the world of experience by striving to replace it to some extent by this image. This is what the painter does, and the poet, the speculative philosopher, the natural scientist, each in his own way. Into this image and its formation, he places the center of gravity of his emotional life, in order to attain the peace and serenity that he cannot find within the narrow confines of swirling personal experience.”