Two senior Wall Street executives complained this week that over-regulation is discouraging initial public offerings. JPMorgan Chase & Co. CEO Jamie Dimon partly blamed the zeal of securities regulators for the drop in IPOs that began in March 2022, a sentiment echoed by Citadel Securities CEO Peng Zhao.
Victor Haghani, James White and Jerry Bell of Elm Partners Management conducted a fascinating experiment to investigate the value of getting tomorrow’s headlines today, and the trading acumen of finance students. The results may suggest to some that finance courses need an upgrade...
Cliff Asness, co-founder of AQR Capital Management, made the news recently with the provocative claim that financial markets are getting less efficient. I worked at AQR for 10 years, but long before that I spent nearly two decades as the only mentee the renowned economist Fischer Black ever had. Fischer had a very different view of market efficiency and would, I think, have reached a different conclusion from Cliff’s data.
Private equity has been in the news frequently in the last few weeks, and not in a good way.
A recent Financial Times opinion piece laid out how illiquidity makes private equity hazardous for investors. The Bank of England’s Nathanaël Benjamin warns private equity illiquidity is a systemic risk to the financial system.
Last week, the Supreme Court overturned a decades-old legal doctrine that gave federal regulators the power to interpret unclear laws. This touched off a lot of wild rhetoric about the end of the administrative state.
Celebrity fund manager and activist investor Bill Ackman just sold 10% of his investment management company in a deal that valued Pershing Square at $10.5 billion. An initial public offering could come as soon as next year, the Wall Street Journal has reported.
The Commodity Futures Trading Commission appears to have little respect for the power of markets, going by their proposal to ban futures contracts on electoral outcomes.
Active exchange-traded funds have seen record inflows in recent years, taking assets under management to $630 billion.
Gross was famous for squeezing out extra yield using corporate bonds, mortgages, derivatives and other instruments.
Rising interest rates and the fear of giving back stock market gains are pushing pension fund managers to move capital from stocks to bonds.
Last July, the House Financial Services Committee approved two major pieces of legislation aimed at creating a regulatory framework for the cryptocurrency industry, the Financial Innovation and Technology for the 21st Century Act and the Clarity for Payment Stablecoins Act.
Among the many too-good-to-be-true financial stories is the Alpha Architect 1-3 Month Box ETF, known by its ticker BOXX, that offers Treasury bill yields taxed at capital gains rates.
One of the hottest products for retail investors the last couple of years is the single-stock option-income exchange-traded fund. While the basic idea is similar to the old and respectable covered-call writing strategy, the modern versions grabbing attention and dollars are supercharged, promising income yields of 100% or more.
The SEC is using its authority over dealers to sneak in the back doors of these entities, which will inevitably create new or modified entities to reduce the cost of regulation.
What does a November 2023 hockey bet have to do with the 2008 financial crisis and the Chunnel connecting England to France? A lot, and the relation is key to understanding financial disasters — not to mention getting paid for longshot sports bets and getting from London to Paris safely.
Large language models, such as ChatGPT, are threatening to disrupt most areas of life and work. Financial trading is no exception.
Blackstone Inc.’s private equity fund for wealthy individuals is a harbinger of two trends that many expect will transform investment management in the next decade.
It should be no surprise that Bitcoin sold for over $44,000 this week, more than double its March 13 price. Going back to 2014, it has taken the cryptocurrency an average of nine months and 21 days to double; the milestone came 28 days early this time.
Two years ago, the Journal of Finance — the most prestigious journal in the field — retracted a published paper because of data errors, either the first or second withdrawal ever by a top-three finance journal.
Every time interest rates go up there is a flurry of demand for a product that has been around at least since the Roman Empire — annuities. The insurance industry has already seen rapid growth in annuity sales since 2021 and if rates remain at or move above current levels, demand seems poised to explode.
Former Bridgewater Associates LP executive Bob Elliott’s plan for exchange-traded funds that employ hedge fund strategies has sharpened the debate about whether retail investors should have access to such approaches.
News that a Washington DC Court of Appeals ruled in favor of Grayscale Investments LLC over the Securities and Exchange Commission has ignited hope that a Bitcoin exchange-traded fund will soon be available. Bitcoin prices jumped.
Moody’s Investors Service recently released a report bluntly entitled, “Private equity exposure increases credit risk for universities with limited wealth.”
The yield on 10-year Treasuries went above 5% last week for the first time since July 2007, when the first Transformers movie was topping the box office and the Dow Jones Industrial Average surpassed 14,000 for the first time in history.
The Securities and Exchange Commission recently announced new rules for hedge funds to report on equity short positions. There’s nothing terrible in the rules, but they will impose pointless costs on investors, mainly because they were written by lawyers rather than accountants.
“Very strict enforcement” is a euphemism used by the American Automobile Association to warn motorists of places where even minor traffic violations will likely be caught and punished with heavy fines.
A group of high-frequency traders, market makers and service providers calling themselves the Shortwave Modernization Coalition has asked the Federal Communications Commission for access to the shortwave band of the radio spectrum, seeking to shave crucial milliseconds off the transmission of data between major financial sectors.
Playing Shakespeare’s King Lear is the crowning ambition for some actors, but in 2023 we’re seeing superstar hedge fund managers Daniel Och and Ray Dalio trying out for the role in real life.
Watching the new Tom Wolfe documentary, Radical Wolfe, I was reminded of the key role the author and journalist played in the development of quantitative finance.
A recent paper analyzing the correlation between stock and bond returns going back to 1875 suggests the relationship of the past quarter century is shifting in an uncertain inflationary environment. The results might stimulate some investors to rethink their portfolio allocations.
A staff report from the Federal Reserve Bank of New York titled “Capital Management and Wealth Inequality” comes to some remarkable Marxist conclusions.
When future economic historians write of our times, the thrust will be that it was a time of transition.
You hear a lot these days how unaffordable housing has become in the US. One way to think about affordability is to look at home prices relative to household incomes.
The fraction of enterprise value of large US companies represented by tangible assets — things like real estate and inventory — has fallen from 50% to 20% over the past 15 years.
Some of the most widely read financial news stories involve projections by Wall Street strategists such as Morgan Stanley’s Michael Wilson, who recently conceded he’d misjudged the direction of US stocks this year.
I sense a growing middle-of-the-road regulatory consensus on cryptocurrencies. It splits the difference between “crypto is a Ponzi scheme to defraud investors and enable criminals,” on the one hand, and “crypto solves ancient financial problems and will usher in an era of prosperity and freedom,” on the other.
One of the discouraging things about working in cryptocurrencies is that almost all the outside focus is on price changes and the resulting fortunes won and lost. Since the most insubstantial assets have the greatest price volatility, this can lead casual observers to think crypto is all froth and nonsense.
The collapse of crypto exchange FTX in November 2022, capping a “horribilis annus” for big-name, regulated digital currencies, combined with the demo release of ChatGPT the same month, sent venture capital money fleeing from crypto and into AI.
The explosive growth of the gig economy is one of the most important labor-market trends to emerge since the 2008 financial crisis. Companies offering ride-sharing, do-it-yourself property rentals and a host of other services have upended traditional sectors.
The benchmark S&P 500 Index has been on quite a rally, having risen 24% since October. At a level of about 4,433, it's already above the median year-end target of 4,100 in a Bloomberg News survey of 23 Wall Street strategists.
ChatGPT is the fastest growing app of all time, gaining more than 100 million users just two months after its launch in November. It allows users to have human-like conversations that include reasonable-sounding and often correct answers to all sorts of questions. Like humans, it can ask for more information and explain reasoning.
Making optimistic predictions either makes you look foolish if bad things happen or be forgotten if nothing bad happens.
BlackRock Inc., the world’s largest asset manager, suggests investors should abandon portfolios made up of 60% stocks and 40% bonds, a mix that has been a standard for six decades.
Perhaps the most famous trading experiment ever conducted was when commodities investor Richard Dennis bet his partner William Eckhardt in 1983 that he could train a group of amateurs – dubbed “the Turtles” -- to be successful futures traders.
As 2022 draws to a close, it’s natural to think about what to expect from 2023. I’m primarily interested in technology.
The dispiriting thing about the Securities and Exchange Commission’s 400-page proposal to re-engineer financial markets, and the response from outside the agency, is that lawyers and economists are arguing over questions that have easy technical solutions.
From the earliest days of artificial intelligence (AI) and machine learning (ML) in the 1950s, practitioners have spoken of using it for investment fund management.
