Obama’s Bank Plan

DFN: In a nutshell, this plan would take away the current rights of ‘wall street banks’, ie, Goldman, Morgan Stanley, JP Morgan, etc., to have a hand in creating the liquidity currently enjoyed in the stock markets. The argument is that if you takeaway this ability for the wall street banks, other companies (unproven) will step up to the plate, and not damage liquidity. Its not clear to me why have the Wall Stree Banks have a role in liquidity creation / maintennace is a bad thing.

I have mixed feelings about this proposed legislation. On the one hand, why not let banks continue to have a role in capital market creation / liquidity? There a relatively small portion of the trading anyway (30%), and it does give them a source of revenue. What happens to the banks when you take that source of revenue away? The argument for taking this away from banks is that it will make them less prone to taking risk with ‘their’ money. I think we’re attacking the wrong issue in trying to stop future financial disasters. The real problem was banks lending money w/o appropriate ‘due diligence’, that’s what we should be attacking. That’s what will prevent future financial disasters. In fact, handing the creation of liquidity over to unproven financial entities, I think is exactly the wrong thing to do at this point in our economy’s history.

Ethiopian Review
International Business Digest
Obama’s bank plan could level high-frequency field
Reuters | January 25th, 2010 at 3:41 am |

By Jonathan Spicer
NEW YORK, Jan 22 (Reuters) – President Barack Obama’s plan to crack down on proprietary trading at big U.S. banks could spark a new rush of start ups, putting them on equal footing with the established independent trading firms that don’t enjoy the backing of large financial institutions.

The plan, unveiled Thursday, would fragment the so-called high-frequency trading that provides much of the buying and selling in U.S. markets. But that liquidity would likely remain at healthy levels, say traders, analysts, and investors.
Besides the independent trading shops — some of which have come to dominate equities and futures volumes in recent years — hedge funds and private equity could also benefit if Obama successfully bars Wall Street banks from proprietary trading operations, unrelated to serving customers, for their own profit.

“It shifts the profits from the banks to the prop trading independent firms, but I don’t think it has a tremendous impact on liquidity,” said Larry Tabb, chief executive of research and consultancy firm TABB Group. “In equity markets, if one player goes away there are twelve others to step up to the plate.”

Independent high-frequency trading firms emerged in force in recent years to take on banks in the world of proprietary trading, where bets on capital markets are made with the firms’ own money, rather than executing trades on behalf of clients.
Independent proprietary firms, including heavyweights Getco and Tradebot, represent about 46 percent of all high-frequency trading in U.S. equities, compared to 30 percent by broker-dealers, according to a December report by Boston consultancy Aite Group.
The 15 largest independent firms alone account for 31 percent of overall high-frequency trading.
In the months before and throughout the financial crisis, a flurry of independents launched to take advantage of the volatile markets, a lucrative rush that died down in the second half of 2009. The firms use rapid-fire trading programs to make markets and take advantage of tiny buy and sell imbalances.

Obama’s proposal would likely force banks to sell or spin off their high-frequency proprietary operations into stand-alone entities. [ID:nN21115923]
That could spur traders to launch their own shops and help to level the playing field for today’s independents.

“It will definitely help the independent shops. It will create a more level playing field for everyone,” said Louis Liu, founder and managing partner at Lotus Capital Management LP, a New York-based quantitative trading firm that uses high-frequency strategies.
“Players will no longer have cheaper capital to make risky moves, some of which may not be warranted,” said Liu, adding independent proprietary traders are more likely than those backed by banks to make less risky bets in the market.


Obama’s plan is intended to limit the risk posed by massive financial institutions, but faces an uncertain political fate and would take years to come into effect.
It also raises questions over how to differentiate proprietary trading from exchange-based market making at the targeted banks, which include Goldman Sachs Group Inc <GS.N>, Morgan Stanley <MS.N>, and JPMorgan Chase & Co <JPM.N>.
Still, it has the potential to reshape electronic trading in the United States — where regulators last week launched a probe of equities markets to determine whether high-frequency traders, which account for more than half of all volumes, have undue advantages. [ID:nN13156728]
“If the plan goes through, I think you’ll actually see more shops being opened up,” said a partner at an independent high-frequency trading shop who requested anonymity.

“I don’t think the competition at banks will go away, but the talent in (the banks) will go into different places, or start their own firms,” he said.

James Ellman, president at San Francisco-based hedge fund Seacliff Capital, said it was unlikely a profitable bank proprietary desk will simply shut down under Obama’s plan.
“Either someone will want to buy that unit, or just as likely the guys that run that unit — who know they’ve got a machine they just turn on every day and money spits out of it — are going to want to (buy out) the thing,” he said.

(For more coverage of the proposed bank rules click: [ID:nN21658127]) (Reporting by Jonathan Spicer; Editing by Tim Dobbyn) ((jonathan.spicer; +1-646-223-6253; Reuters Messaging: jonathan.spicer.reuters.com@reuters.net) )


Trenches found under Edinburgh Castle

DFN: Castle often were build on top of previous settlements.

Trenches found under Edinburgh Castle
By Andrea McCallum

MEDIEVAL trenches dating back to the 16th century have been found underneath Edinburgh Castle.

The foundations – which formed part of the castle’s outer defences – were discovered by archaeologists.

Workers unearthed the walls and foundations during work to install new seating for Edinburgh Military Tattoo audiences.

Two separate structures were found buried about two metres beneath the castle’s esplanade.

The remains of a two-foot-wide wall was uncovered in the first trench – which is thought to be part of the north boundary between the city and the castle.

And a second trench revealed the foundations of a Spur – a 16th century defensive stronghold that protected the entrance to the castle.

Both appear in a 17th century drawing by Gordon of Rothiemay but until now their precise location was unknown.

Fiona Hyslop, Minister for Culture and External Affairs, said: “Edinburgh Castle has a long and important role at the centre of the country’s history.

“Finds of this kind are extremely valuable in terms of improving our understanding of the development of the castle, and its defensive needs during key periods in time, as well as showcasing effective modern day partnership working between the heritage and construction sectors.”

CFA Archaeology is working for Edinburgh Military Tattoo Ltd at the castle as part of Scheduled Monument Consent granted by Scottish Ministers for the new Tattoo stands.

Peter Yeoman is the head of CRT for Historic Scotland who looks after both Edinburgh Castle and the castle esplanade on behalf of Scottish Ministers.

He said: “As the remains have effectively lain covered for over 250 years, this is a unique opportunity to learn more about the esplanade during this period in the castle’s history.

“Until recently we have only had early drawings to go by, but we are now able to examine the archaeology and record and preserve as much of it as is possible for future generations.

“The remains are too deep down to be displayed, but to have this knowledge is a great step forward. In carry out these works Edinburgh Military Tattoo Ltd are to be commended for applying best conservation practice in ensuring that any discoveries are properly preserved and recorded. ”

The esplanade was formed in 1753 to create a parade ground for the military.

Archaeologists will continue to work with the Tattoo Company and their contractor Sir Robert MacAlpine to record the remains before they are re-buried.

Pyramids build by ‘freemen’

DFN: So, "The 10 Commandments" presented an inaccurate picture of ancient Egypt? Surprise, surprise, surprise.

Pyramids may have been built by free men, not slaves
By Yuval Azoulay, Haaretz Correspondent and Reuters

Tombs discovered in recent years near the Great Pyramids in Egypt may reveal that the builders of the famed monuments were free workers, rather than slaves, as is commonly thought. The discovery of the tombs also showed that the workers received pay, food and lodging near the construction site, the Egyptian Antiquities Ministry said yesterday.

Egyptian archaeologists said they found evidence of settlements near the pyramids of Khufu and Khare, at Giza near Cairo.
Popular culture has long depicted slaves toiling away in the desert to build the mammoth pyramids only to meet a miserable death at the end of their efforts. The new tombs, which are approximately 4,100 years old, may dispel these myths.

"These tombs were built beside the king’s pyramid, which indicates that these people were not by any means slaves," Zahi Hawass, the chief archaeologist heading the Egyptian excavation team, said in a statement.

Hawass said evidence had been found showing that farmers in the Delta and Upper Egypt had sent 21 buffalo and 23 sheep to the plateau every day to feed about 10,000 builders.

The builders were rotated every three months and those who died on the job were buried in these tombs.

The first of the laborers’ tombs were uncovered in the early 1990s and were studied for many years by scholars from around the world. The cone-shaped tombs were built mainly of mud-brick and covered with white plaster. Scholars have said the plaster may have been added to imitate the royal pyramids.

Such discoveries reveal aspects of ancient Egyptian society, and can show the social origins of the lower classes, Salima Ikram, a professor of Egyptology and the American University of Cairo told The Associated Press.

Tel Aviv University Egyptologist Dr. Raphael Ventura said yesterday he was not surprised at the reports on ancient labor conditions.

"Those who study the subject properly know that slaves did not build the pyramids and certainly not the Israelites, as many mistakenly think," he said. However, Ventura and other Egyptologists said the reason people worked hands was the good deed of building a tomb for the king.

"They felt it was their duty to come when they were called," leaving their farms and fields during the Nile’s flood season, he said.


Cortes was impressed by the Market of Tenochtilan

DFN: Tenochtilan was built on Lake Texoco; article describes elaborate market system in the Aztec world.

The Markets of Tenochtitlan
A Vast Choice of Goods in the Aztec Capital
Jan 14, 2010 Brenda Ralph Lewis

The Aztecs held their tianguis (markets) in Tenochtitlan every five days, selling everything from food and medicines to ornaments, tiles and woods.

When the Spanish conquistadores arrived in Tenochtitlan in 1519, the Aztec capital on Lake Texcoco held up to 300,000 inhabitants. They were augmented by thousands more who made long journeys on foot from the surrounding areas to attend the markets. This was more than enough population to support the vast amount of trade carried on in Tenochtitlan, which was the hub of a market network that extended throughout the Valley of Mexico.

Cortes Writes to his Royal Master

In the second of five lengthy reports, written on October 30, 1520, the conquistadores’ leader, Hernan Cortes, informed King Charles of Spain of the vast variety to be found in the markets of the city he mistakenly called ‘Temixtitan”:

“The city has many squares where trading is done…There is one square twice as big as that of Salamanca (in Spain) with arcades all around, where more than sixty thousand people come each day to buy and sell, and where every kind of merchandise produced in these lands is found…

“There is a street where they sell game and birds of every species … partridges, quails,, turtledoves, pigeons, eagles ….falcons, sparrow hawks and kestrels.

“There are streets of herbalists where all the medicinal herbs and roots found in the land are sold. There are shops like apothecaries, where they sell ready-made medicines as well as liquid ointments and plasters…”

Yet nowhere in all this bustle of trade did any money change hands, for the Aztecs knew nothing of coins or paper money but traded entirely by barter and exchange.

When one of Cortes’ men, Bernal Diaz del Castillo visited the market at Tlatelolco, which was even more extensive than those in Tenochtitlan, he observed how the barter system worked.

“There were many …merchants who sold gold in grains as it came from the mines,” Bernal wrote. “ They put it in goose quills…They calculated how much so many blankets or gourds of cacao were worth, or slaves, or whatever else they traded, according to the length and thickness of the quills.”

Judges and Officials Ensure Fair Trading

The Aztec markets had their own courts comprising ten or twelve judges. Their task was to regulate trading, with special reference to the danger of giving short measure.

As long as the market was open, officials mingled with the crowds “observing what it sold and the measures with which it which it is measured.” Bernal added: “We saw one measure broken which was false.” Punishments for wrongdoing could be a great deal worse than this: anyone found guilty of stealing was flogged to death on the spot.

The Rules of Proper Measure

The rules about giving proper measures were extremely strict and covered a multitude of goods, including paper, paint, glue, feathers, rubber, salt, obsidian blades and mirrors, pottery, jewels, baskets, lengths of cloth, herbs and potions or slaves.

Maize and grains, for instance, were sold in measures of around 198 lbs. called troje, or about 132 lbs. called tlacopintli. Cloth was reckoned by the length of a hand, by the emmitl – the distance between outstretched arms – or by a longer measurement from the ground to the tips of the fingers when the arm was stretched above the head.

Paying for Goods with Cloaks

There were, though, some fixed “prices” in which the “currency” was a number of quachtli, or cloaks. For instance, a slave who was good at dancing was worth forty cloaks, while one without such talent merited only around thirty.

A canoe cost one cloak, a gold lip-plug cost twenty-five and a military costume with a feathered shield, sixty-four. A string of jade beads was a luxury item: it cost six hundred cloaks.

The Aztec Merchants, a Favoured Class

The Aztec pochteca, the merchants, who carried goods to the more distant markets by caravan, were something of a class apart. They enjoyed more privileges than was usual for commoners – for instance, they had their own lawcourts – but the nature of their work meant that they also took more than the usual risks.

Trading journeys could last for a year or more and safety could never be guaranteed, when the caravans had to cross hot, thirsty deserts, dangerous mountain passes and fast-flowing rivers.

The rituals observed before a caravan set out reflected these dangerous possibilities. First, the stars would be consulted to ensure that the day of departure was a lucky one.

Once the date was decided, the merchants, their wives and children would ceremonially wash their heads and cut their hair. None of them did these things again until the merchants had safely returned.

Then, some time during the night, the merchants would slip silently from their homes. By the time their families woke next morning, they would be far away and out of sight, somewhere in the mountains.


Aguilar-Moreno, Manuel: Handbook to Life in the Aztec World (New York, NY, Oxford University Press, 2007) ISBN-10: 0195330838/ISBN-13: 978-0195330830

Aghajanian, Alfred: Chinampas: Their Role in Aztec Empire – Building and Expansion (Los Angeles, California: IndoEuropean Publishing, 2007)ISBN-10: 1604440031/ISBN-13: 978-1604440034

How to keep your search on the DL

DFN: Tips on how to look for work while working.

Five Ways to Keep Your Job Search at Work on the DL
By: WORKS by Nicole Williams (View Profile)

It’s hard enough to keep up with a demanding boss and your never-ending to-do list, but finding a new job on top of everything else is enough to make even the most organized and on-top-of-it gal feel a little crazed. If you’re as guilt prone as I am, then you may feel a little like you’re cheating on your company by sneaking around behind your co-workers’ backs. The long lunches, the extra lipstick stashed in your purse, the secret phone calls behind closed doors … you get the idea. Here are a few tips to keeping your search on the DL.

Nix the guilt.
Gone are the days when people would work for the same company for thirty years and get a gold watch at their retirement dinner. Job hunting is a fact of life. Your boss or co-workers may be doing the same thing, so don’t feel like you’re being disloyal. Remind yourself that a new job will give you a better quality of life and help advance your career.

Schedule accordingly.
Many interviewers understand that you’re currently employed and are willing to accommodate a request for an early-morning or late-afternoon interview to minimize interference with your current job responsibilities. If someone insists that you must meet with them from 1 p.m. to 4 p.m. on a Monday afternoon and that is wildly inconvenient for you, consider whether you really want to work for someone who is so inflexible!

Give yourself time to breathe.
In an ideal world, you’d take the day off to go to several interviews scheduled a few hours apart and allow yourself plenty of time to prepare mentally and physically (plus, you’d avoid giving lame excuses to your co-workers). In reality, you’re probably sneaking out during lunch and praying your boss doesn’t notice that you’ve already had two “dentist appointments” in the past month. I normally take the subway to work, but if I’m unsure of where an interview is or I’m concerned I might be late, I’ll splurge on a cab so I can arrive unruffled and on time. Time permitting, you could scope out the address a few days in advance so you’ll know where you’re going.

Get personal business cards printed.
Some companies are totally chill about you fielding calls from recruiters, but my past employers were not. I used VistaPrint to order custom business cards with my cell phone and gmail address printed on them. That way, I could give potential contacts my digits without scrawling them on a napkin. Personally, I think my cards are a lot better looking and better reflect my professional brand than my company’s logo.

Excel at your current job.
If you’re kicking butt at the office, who can fault you for taking an hour off here and there? Delegate when you need to, but keep plugging along so you’ll earn a solid reference from your boss. Though she’ll be sad to see you go, she’ll be happy that you’re off to bigger and better things.

Originally published on WORKS by Nicole Williams

Value of a Baseball Player’s Contract

DFN: This is the first in a series of articles regarding how to establish a value for a baseball players contract.

Ahead in the Count
Revising Player Contract Valuation, Part 1
by Matt Swartz
The first of a three-part series.

Rumors pertaining to Johnny Damon’s eventual contract, not just as far as potential suitors go, but also what they might offer are increasing in frequency. If one were to buy into the hype, Damon could get anywhere from a one-year deal worth $4 million to one paying $33 million over three years. To come up with reasonable price estimates of his services, analysts are looking at recent deals doled out to comparables like Bobby Abreu and Mike Cameron, and it certainly seems like whoever brings Damon aboard will pay a similar price, a tad shy of the $10 million mark. Of course, when Matt Holliday was still on the free-agent market, there were no other comparable players getting deals. Holliday provided a WARP3 of 20.7 over the last three years compared to Damon’s 11.4. Considering age and basic regression factors, it stands to reason that Holliday is about twice as good as Damon, but does that mean he should be getting twice as much in salary? Is he worth more than twice as much? Evaluating the monetary value of free agents presents a tricky proposition, but an important one worthy of discussion nevertheless.

One of my upcoming projects at Baseball Prospectus is the development of a new version of MORP, or Market Value Over Replacement Player. Nate Silver developed MORP here for Baseball Prospectus in 2005 as a means of gauging the monetary value added by players and based the metric on the formula for WARP, which has since changed. Nate also developed the stat in a different market, when very few teams had sabermetricians in their front offices and Billy Beane could roam free. Times change, and with the changing market, MORP needs a makeover.

MORP’s purpose is not to estimate what the average team would get in value from a given player. It also does not attempt to answer what would happen if everybody in the league were a free agent at once. The latter situation would represent an entirely different labor market and it would be futile to speculate about what players would be paid in this case. MORP should only attempt to estimate what the market value would be for a given amount of production, holding everything else constant.

It is also important to acknowledge that players have different values to different teams. Matt Holliday made a lot more sense for the Cardinals than the Orioles. As teams bid on free agents in an auction format, the market value of a player becomes his value to the highest bidder, or really, the second-highest bidder. However, the difference between Holliday’s value to the Cardinals, Yankees or Red Sox might be very small compared to the difference between his value to the Cardinals and Pirates. Nate showed us that the marginal value of a win is much higher to teams who are on the cusp of making the playoffs because of the extra revenue the postseason generates. Therefore, a player’s monetary value to a team will be based on how much he would add to a squad in a situation of being projected to win, for example, 87 games but miss the playoffs, because those teams will get the most bang for their buck from the signed players.


Antiquity – Queen Berenice’s Temple?

DFN: Learned something new, Cleopatra was the last in the line of the Greek-speaking Ptolemaic Dynasty.

Egypt announces find of ancient cat goddess temple
The Associated Press
Tuesday, January 19, 2010; 7:21 PM

CAIRO — Archaeologists have unearthed a 2,000-year-old temple that may have been dedicated to the ancient Egyptian cat goddess, Bastet, the Supreme Council of Antiquities said Tuesday. The ruins of the Ptolemaic-era temple were discovered by Egyptian archaeologists in the heart of the Mediterranean port city of Alexandria, founded by Alexander the Great in the 4th century B.C.

The city was the seat of the Greek-speaking Ptolemaic Dynasty, which ruled over Egypt for 300 years until the suicide of Queen Cleopatra.

The statement said the temple was thought to belong to Queen Berenice, wife of King Ptolemy III who ruled Egypt in the 3rd century B.C.

Mohammed Abdel-Maqsood, the Egyptian archaeologist who led the excavation team, said the discovery may be the first trace of the long-sought location of Alexandria’s royal quarter.

The large number of statues depicting Bastet found in the ruins, he said, suggested that this may be the first Ptolemaic-era temple dedicated to the cat goddess to be discovered in Alexandria.

This would indicate that the worship of the ancient Egyptian cat-goddess continued during the later, Greek-influenced, Ptolemaic period, he said.

Statues of other ancient Egyptian deities were also found in the ruins, he added.

Zahi Hawass, Egypt’s chief archaeologist, said the temple may have been used in later times as a quarry as evidenced by the large number of missing stone blocks.

Modern Alexandria was built squarely on top of the ruins of the classical-era city and many of its great temples, palaces and libraries remain undiscovered.

The temple was found in the Kom el-Dekkah neighborhood near the city’s main train station and home to a Roman-era amphitheater and well preserved mosaics.