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At Yale, where I have been teaching for 25 years, I’ve been hearing a great deal lately from my students about financial innovations linked to social media. One such innovation, called crowdfunding, is embedded in the jobs bill signed into law by President Obama on Thursday. The idea involves Web sites that help many investors contribute small amounts of capital to projects that they read about online, and that might otherwise be starved for money.
I dismissed this the first time I read it, but now it seems sort of plausible. You connect Kickstarter and an HFT platform or something like Almgren’s quantitativebrokers , the Kickstarter project is like a fixed for floating swap. For example,
I will pay 100 USD to be used as Liquidity premia to facilitate order execution between 9:35am and 9:36am on ARCA SPY trading platform XYZ for 12 Apr 2012
and in return
I receive 0.85% of the net arbitrage profits for trading platform XYZ between 9:36am and 9:37am on Arca SPY for 12 Apr 2012.
Roll through all the obvious parameterizations for different examples of swap/projects: different contracts/tickers; different exchanges/venues; different trading platforms; got your micros, millis, seconds, minutes; anytime during the trading day; pay in EUR and trade in USD etc. etc. Build multiple-leg structures to execute synchronously with limit order placement. Buy protection against specific corporate actions, Federal reserve announcements, or Foreign Central bank news. Choose from the extensive list of prepackaged market microstructure strategies, or create your own. Oh, and one more thing, you can synchronize your execution strategies to the microsecond with your friends to bring added liquidity to new markets with complete privacy and confidentiality. Track your project P&L and backtest though the free iPad/iPhone/Android app. Project orders booked by COB T-1, project settlement T+3 though PayPal.
Get the trade documentation and the execution levels right to establish par value for the swap, who says no? Technically, very feasible. Trade docs not a problem. Regulatory, get on board the Shiller 25 years @ Yale, democracy, JOBS, and risk mitigation train. The crowd funded project needs a name … ok “DynaFair” until something better comes along.
The way Shiller thinks about this, it’s all about risk — finance, after all, is all about mitigating risk. The more people who can invest in companies (especially start-ups) the more risk is spread around.
Not only that, but it means more people will have a vested interest in getting to understand Wall Street — “The faults in institutions that contributed to the recent financial crisis can be corrected,” said Shiller, “but only by those who are willing to get inside the mechanism and get to know it. “
NYT, Economix Blog, here.
Pingdom, WordPress Completely dominates top 100 blogs, here. Look at the List of the top 100 blogs, Blodget at 22 and Durden at 27 wow they both beat Funny or Die.
HPC Wire, The Processors of Petascale, here.
The odd one out is the PowerXCell 8i, a Cell processor variant IBM designed for HPC duty. The PowerXCell 8i debuted in the world’s first petaflop system, Roadrunner, which was booted up in 2008. That system employed the processor as an accelerator alongside AMD Opteron CPUs, using IBM’s QS22 blade server. Each PowerXCell 8i consists of a Power Processing Element and eight Synergistic Processing Elements (SPEs) that together deliver 102.4 gigaflops — a whopping amount for a 2008-era processor.
Unfortunately for IBM, GPU computing was coming onto the scene just as the PowerXCell 8i was debuting. Thanks to a concerted effort by NVIDIA to build GPU accelerators for HPC, not to mention a more favorable business model for graphics processors, IBM decided to abandon any follow-up to the PowerXCell 8i(At one point IBM was said to have a 32-SPE PowerXCell on the drawing board.) Roadrunner would be the first and last Cell processor-based supercomputer.
Even though the PowerXCell design died an untimely death, there are some new processors on the horizon to takes its place. The most well known is Intel’s Many Integrated Core (MIC) chip, a manycore x86 architecture based on the “Larrabee” prototype. The first implementation, known as Knights Corner, is expected to deliver more than a teraflop of double precision floating point performance when its introduced in late 2012 or early 2013.
Noahpinion, Thursday Roundup, here.
11. Barkley Rosser pulpifies Robert Samuelson. This is not difficult; Robert Samuelson is one of the worst economics writers in existence. He is also one of the most highly paid. (However, this is not surprising, from a physics standpoint…if Knowledge = Power, and Time = Money, and Power = Work/Time, then Money ~ 1/Knowledge…)
Wired, Code Not Physical Property, Court Rules in Goldman Sachs Espionage Case, here.
Princeton University Quant, slides for talks, here. Almgren’s slides are here.
March 31, 2012
Time: 9 AM to 6PM