05 May 2009

Chicken

We've been having a lot of chicken for lunch lately (the company caters in lunch for us), and the traders (and me too) have been wondering why it is, until I chanced upon the reason -- we took delivery on some chicken futures, and the easiest way of liquidating the position is by eating it.

20 April 2009

Perspective, etc.

A few days ago, both Citigroup and Google announced their earnings. Citigroup, trading around $4/share at the time, reported a net loss of 18 cents/share. Google, on the other hand, announced earnings of $5.16/share, while trading at around $400/share.

Can you imagine what would happen if Google lost $18/share? That's the same proportionality to Citigroup. Point is, I'm still surprised that there are people who believe Citigroup is a good investment...

On an unrelated note, a funny story from the floor today. One of the traders, T., was feeling somewhat ill, and left early to go rest. O., another trader who works with the guy who went home had stepped away from the desk, and upon his return asked where T. had gone. When I told him that he had left because he was feeling sick, O. deadpanned, "I just accidentally drank his Sprite."

12 March 2009

The Joys of CNBC

There is a fictional contest going on at the arbitrage desk where I work. As anyone who watches CNBC often will attest, the commercials that run on the network are quite repetitive (after adjusting for the local commercials). But I am sure that everyone would be aware of Vermont Teddy Bears (which are "so much bigger than [the girlfriend] thought"), Pajamagrams (which include "all that spa stuff that women really love"), real US-government-issued gold (which trades at about a 25% premium over spot gold, despite the claim that the vendor is selling them "at cost"), PowerShares (with the man who has had only one giant idea about investing ever), and Video Professor (who promises that the next time you have computer learning needs you'll come back to Video Professor), among others.

In any case, the contest involves being able to recite these commercials word for word, the "winner" being the one who can recite the most. I've no real clue how this started, but sadly, I think I am in the lead. The commercials just subliminally insert themselves into my mind while I trade. But that's what commercials are supposed to do, right?

I miss those "Citi never sleeps" commercials, though we still see "Bank of America, Bank of Opportunity".

01 March 2009

What do you do?

Since I just moved here to Chicago recently, I'm still building up a social network out of the people I meet off of the floor. And meeting people, of course entails the question "What do you do?"

My official job title is "market maker", but I find that it is cumbersome and often requires further explanation, since most people wouldn't know what a market maker was. The clear title that most people would understand is "stock broker" but since I work at a prop shop, it's not like we really have clients to broker trades for. So I settle on "trader".

But something must be wrong with my pronunciation of the word, since most people hear "trainer" and proceed to confirm by asking "personal trainer"? Those who know me know how funny this is. But the one that really took the cake was "traitor".

"Like Paul Revere?"

I was flattered by the comparison to the American patriot, though betraying one's country isn't really what I would consider an honest day job.

21 February 2009

The Rant Heard 'Round the World

In case you haven't yet seen it, here is CNBC reporter Rick Santelli's rant against Obama's stimulus package,



as well as White House Press Secretary Robert Gibbs's response:



I won't lie, I haven't yet read the bill (though apparently, neither did those who passed it). On the other hand, I did take Gibbs's suggestion to read through the Homeowner Affordability and Stability Plan (the one he holds up at the end of the second video).

Though it may seem profoundly obvious, it is true that people form opinions before they get a complete set of facts. And reading through the plan, you can see some token attempt to address the concerns of Santelli (who I do believe went a little over the top with his exaggerations and rabble-rousing). At the same time, however, I've noticed that even though the term "responsible homeowner" is used repeatedly, it is not defined. This may be in the actual bill itself, or just a broad term subject to the interpretations of the agencies refinancing the mortgages.

As to what I think of all this -- I think that there are too many talking heads on CNBC, and that the government can't give a straight answer for what it's worth. As with Geithner last week (incidentally, part of the intraday rally we saw on Friday was in hopes that we'd here the details of the plan that Geithner so wisely left out the last time he spoke), there's a want for information and clarity here.

"President Obama, are you listening?"

19 February 2009

Digression, Computers and Training

If you are reading this blog for stock tips or particular insights into what goes on on a daily basis at work, then you are probably mistaken. While I won't deny that there may be occasional moments where I talk about things that go on at work, most of the time, it will just be those little moments and thoughts that I find memorable. Though if you're clever, you may be able to figure out what the environment is like at work, and maybe even some of the culture. Also, I won't be posting what exactly it is that I do here either. It's not like there isn't enough competition anyway.

And now that the digression is done and over with...

A few days ago, I went to a Bloomberg Terminal training seminar at the local Bloomberg office in the Deloitte Building here in Chicago. Though I have indeed wasted hours in worse ways, there was certainly nothing particularly interesting or educational about the seminar. Granted, it was the first in the series but regardless, what was taught there could have been taught by a fellow coworker in just ten or fifteen minutes.

I might add at this point that I am particularly bitter about this class since it took place during trading hours and I had to leave my desk to take something that a fellow coworker had already denounced as useless. After the pronouncement, I was inclined to just skip it as well, but at the urging of the boss, I went to it. His reasoning was that I would go to determine whether or not it was truly useless and thus determine whether future trainees at the company would be sent to the training. What my opinion was at the end of it was probably quite clear.

In any case, the point that I am trying to get at here is that the best way to learn about some new piece of technology is to play with it yourself. So long as the technology is reasonably robust and comprehensible, it isn't too difficult to explore just by seeing what works and what does what. Not only is that true for something like a Bloomberg terminal, but it's also true for most programming languages. The easiest way to learn is not by doing classes, since you end up learning how to do things which are mostly useless, but just by jumping in headfirst without knowing anything and tinkering with it until it does what you want it to do. Though I can't say that what goes for me goes for the rest of the world, that is the way that I learned VBA, which is probably one of the most important languages for anything related to finance.

17 February 2009

Time Is of the Essence

Congress passed the American Recovery and Reinvestment Act, better known colloquially as Obama's new stimulus package on February 13, 2009. However, it took Obama until today to sign the Act into law. That's a whole four days. Granted, there was a long weekend in-between, but why couldn't he sign it into law the day of?

If we take January's change in non-farm payrolls as an indicator (-598,000 jobs) and average it over the 31 days of January to get an average number of jobs lost per day, it works out to 77,000 jobs lost over the course of the four days that Obama waited. I am in no way suggesting that Obama's delay cost the economy 77,000 jobs, since I sincerely doubt that the calculus of job losses can be worked out this way (and who would be so cruel as to lay someone off on the Saturday of a long weekend?), but it is an interesting thought to ponder (for me) nonetheless.

Edit (Feb. 21): fixed a double negative.