The economists Eric Budish at the Booth School of Business and Peter Cramton at the University of Maryland, and John J. Shim, a Ph.D. candidate at Booth, have shown in a study how extreme this financial gold rush has become in at least one corner of the financial world. From 2005 to 2011, they found that the duration of arbitrage opportunities in the Chicago Mercantile Exchange and the New York Stock Exchange declined from a median of 97 milliseconds to seven milliseconds. No doubt that’s an achievement, but correcting mispricing at this speed is unlikely to have any real social benefit: What serious investment is being guided by prices at the millisecond level? Short-term arbitrage, while lucrative, seems to be mainly rent-seeking.
G.E. to Retreat From Finance in Post-Crisis Reorganization
General Electric plans to sell off most of its finance arm over the next two years, redefining the multinational conglomerate as it seeks to complete a transformation begun amid the tumult of the financial crisis.
In addition to huge planned sales of assets outlined by the company on Friday, G.E. will take other significant steps, including bringing back about $36 billion in cash that now resides overseas.
.. For years, the financial tilt looked smart and relatively easy. In an interview in 2010, Mr. Immelt recalled, if a deal looked like a money spinner, it got the nod. “And you don’t have to build a factory,” he observed.
Yet the big bet on finance badly wounded G.E. in the wake of Lehman’s demise, when the market upheaval left the conglomerate hard-pressed to borrow debt for its day-to-day operations.
.. Perhaps one of the most notable potential consequences of the drastic move is that G.E. will be able to shed its designation as a “systemically important financial institution.” Such status comes with high requirements to keep capital on hand, potentially limiting its financial returns.
How Apple Pay Gets People to Part With More of Their Money
A main reason that services like Apple Pay will, as adoption increases, usher in a new level of painlessness is that they rely on a motion—a swift, mechanical drawing of the phone from the pocket—that’s already tied to so many other non-financial activities. The act of fishing out a wallet to procure a credit card has only one connotation: You’re about to pay for something. Unlocking your phone, however, is something done to retrieve information wherever you are.
The Trader Who Donates Half His Pay
Wage told me that he plans to remain in finance and donate half his income. One of the major charities Wage gives to is the Against Malaria Foundation, which, by one analyst’s calculation, can save a child’s life on average for each $3,340 donated. All this suggests that Wage may save more lives with his donations than if he had become an aid worker.