Pacific Standard July-August 2013 Cover

Big Data, Big Money

April 25, 2013 • By • Leave a Comment
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Now that we know a single hacked Twitter account can erase $136 billion from the American stock market in seconds, maybe it’s time to re-evaluate this whole “let the machines do the trading” strategy. Or not. A remarkable study, published this week in Nature Scientific Reports, details how a simple Google Trends algorithm makes a better day trader than most of the suits on Wall Street. Tobias Preis, of the University of Warwick, led a trio of researchers in designing the trading strategy. It started with a simple idea: Investors—whether skittish or bullish—make financial ... Read More

More like this: Business & Economics
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Hunting for Bear (Stearns) With the Martin Act

October 2, 2012 • By • Leave a Comment

Today’s announcement by the elegantly named Residential Mortgage-Backed Securities Working Group that it was suing over fraud allegedly perpetrated by the late, if unlamented, Bear Stearns notes that the group’s weapon of choice is the Martin Act. Faithful readers may recall that the act is not a federal law but a New York state law enacted in 1921 to crack down on “blue-sky” stock manipulators, i.e. pump-and-dumpsters whose equities were backed by nothing more than the open air. (Geez, at least today’s abusers of collateralized debt obligations had a horrible, but genuine, credit ... Read More

More like this: Business & Economics, The 101
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The Wall Street Crackdown America’s Been Waiting for?

August 17, 2012 • By • Leave a Comment

A bunch of outlets reported yesterday that New York Attorney General Eric Schneiderman subpoenaed seven of the world’s largest banks over the London Inter-Bank Offered Rate (LIBOR) imbroglio this past month. The Financial Times’ version of the story, by Shahien Nasiripour and Tracy Alloway, is the only one I saw that hinted at the true significance of Schneiderman’s subpoenas: The state investigation comes on the heels of separate probes from prosecutors and regulators in countries including the UK, Canada, Japan and the US who are examining possible collusion by large financial ... Read More

More like this: The 101
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Unleashing a Wall Street Watchdog

April 23, 2012 • By • Leave a Comment
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No one doubts that the Great Recession has been the worst economic crisis in this country since the Great Depression. By whatever yardstick — the near collapse of the banking system, the 8.8 million jobs lost between 2008 and 2010 — no downturn in the intervening 80 years comes close. The crisis has forced a fundamental rethinking of the financial system, a conversation that is now centered on the 2010 reforms known as the Dodd-Frank Act. But the 2,319 pages of legislation do not hold all of the answers. If the regulators who are responsible for enforcing the hundreds of new rules are not ... Read More

More like this: Business & Economics, May-June 2012
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OWS, Egypt Expose Limits of Town Square Test

January 4, 2012 • By • Leave a Comment

Many of last year’s most dramatic photographs showed people packing public places to sound off. We saw memorable images of crowds gathering at Tahrir Square to lambast one government then castigate its successor, protesters at Zuccotti Park to voice outrage at Wall Street, and public outcry on the grounds of the Mazu Temple in the South China village of Wukan in December to denounce government land grabs. We saw gatherings in Syria, in Tunisia, in Greece, even in North Korea. If, as TIME magazine declares, 2011’s Person of the Year was “The Protester,” then 2011’s Place of the ... Read More

More like this: Politics
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Gambling on Gary

October 22, 2008 • By • Leave a Comment

As I write these words, the U.S. House of Representatives has just rejected a $700 billion plan to rescue the nation's financial system from a Wall Street-devised, government-encouraged, multitrillion-dollar pyramid scheme concocted of low-grade mortgages wrapped into flimsy securities insured by obscure derivatives, known as credit default swaps, that can be reasonably described as radioactive waste in paper form. At this point, it's unclear what type of rescue bill might pass Congress. But I'm hoping one does, even though it will likely give undeserving American financiers a lot of money, ... Read More

More like this: Business & Economics, Not the Editor's Letter, November-December 2008
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Scary Cinema Verité

October 16, 2008 • By • Leave a Comment

The average American has no clue how large the national debt is — or even that the national debt is worth thinking about as anything other than a vague problem for the far-off future. He lives his life, pays his taxes and enjoys his local pork-barrel projects, blissfully unaware that the people in charge of the federal government are, financially speaking, running it into the ground. If you or someone you know is as fiscally uninformed as most of the country (and unless you’re an economics professor married to a think tank researcher, you probably are), please, for the sake of your ... Read More

More like this: Business & Economics, November-December 2008, Views Reviews and Interviews
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A Free and Fair Market

September 16, 2008 • By • 1 Comment

Even President Bush now admits our economy is in trouble, but so far his administration’s response has been one hurried bailout after another in an attempt to keep our economy from crashing. Because history is a pendulum where one policy creates a problem that is “solved” by policies intended to correct the initial policy, it is important to understand why our current economic problems occurred so we can craft solutions that don’t push the pendulum too far and create new problems. Let me first admit my bias: A free market is the basis for a healthy economy, but a free market ... Read More

More like this: Business & Economics, October 2008, Rational Argument
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