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jerryking : public_information   3

Exchange Sale Reflects New Realities of Trading - NYTimes.com
December 20, 2012 | NYT | By BEN PROTESS and NATHANIEL POPPER.

(Idea for the Ontario Food Terminal and the OPMA??) the firm, IntercontinentalExchange, or ICE, an electronic operator of markets for derivatives and commodities, is buying the symbolic cradle of American capitalism, the New York Stock Exchange,for $8.2 billion....ICE was founded in 2000 by Mr. Sprecher, who began his career developing power plants. In the 1990s, he saw that many power companies and financial firms wanted to hedge their investments in energy with financial contracts, but the market for these contracts was disorganized and opaque.

Mr. Sprecher bought an obscure exchange for buying and selling electricity in Atlanta and turned it into ICE with financing from BP and Wall Street firms, including Goldman Sachs and Morgan Stanley.

Banks were drawn to the idea of a standardized place to buy and sell derivatives tied to the value of oil and other commodities. But they also hoped to create a competitor to the virtual monopoly position being built up by the Chicago Mercantile Exchange in futures trading....ICE also decided to fashion its own clearinghouse, rather than tap an outsize firm. It expanded through acquisitions, planting the seeds for growth in 2008, when it took over the Clearing Corporation, home to a popular derivative known as a credit-default swap.

The Dodd-Frank overhaul may provide additional benefits for ICE. Under the law, exchanges must turn over public and private information to outside data warehouses, which will, in turn, share the information with regulators. Sensing an opportunity, ICE created its own warehouse, named ICE Trade Vault.

ICE and its Chicago rival, CME Group, have also moved in recent months to convert swaps trades, which are facing more scrutiny under Dodd-Frank, into old-fashioned futures contracts. Futures trading is lucrative territory for the exchanges in part because they can shut out competitors.

“The reality is that there are incentives to convert swaps into futures, where there’s less competition,” said Richard M. McVey, chief executive of MarketAxess, an independent trading platform that is expanding into the swaps business. “There’s no requirement for CME and ICE to open their futures clearinghouses to other exchanges.”
contracts  stockmarkets  mergers_&_acquisitions  M&A  derivatives  Dodd-Frank  trading_platforms  bourses  OFT  hedging  opacity  public_information  private_information  disorganization  clearinghouses 
december 2012 by jerryking
How to Build Your Network
December 2005 | HBR | Brian Uzzi and Shannon Dunlap.

Strong personal networks don't just happen at the watercooler. They have to be carefully constructed.Networks offer three unique advantages: private information, access to different skills and power. Leaders see the benefits of working every day, but perhaps not pause to examine how their networks are governed....Here's how to strengthen your connections.

Paul Revere was an information broker, a person who occupies a key role in a social network by connecting disparate groups of people....Networks determine which ideas become breakthroughs, which new drugs are prescribed, which farmers cultivate pest-resistant crops, and which R&D engineers makes the most high impact discoveries....When we make judgments, we use both public and private information. These days, public information is readily available from various sources, including the Internet, but precisely because it is so accessible, public information provides a competitive advantage much less than usual. Privacy, however, gathered from personal contacts that can offer something unique that can not be found in public spaces such as the release of a new product, the novel software code, or knowledge of this what a particular investigator seeks in candidates. Private information, therefore, may provide an advantage for executives, but is more subjective than public information, because it usually is not marked by an independent third party, such as Dun & Bradstreet. Therefore, the value of your private information to others and the value of your private information depends on how much confidence exists in the network of relationships....the best way to have a good idea is to have a lot of ideas....And when you trade information or skills with people whose experiences differ from your own, you provide one another with unique, exceptionally valuable resources....Power was repositioned in the network's information brokers, who could adapt to changes in the organization, develop clients, and synthesize opposing points of view.
These brokers weren't necessarily at the top of the hierarchy or experts in the field, but they linked specialists in the firm with trustworthy and informative ties.
networking  social_networking  social_capital  HBR  howto  networks  nonpublic  confidence  slight_edge  proprietary  relationships  exclusivity  public_information  private_information  inequality_of_information  homogeneity  heterogeneity  dual-consciousness  power_brokers  network_power  personal_chemistry  personal_connections  judgment  prolificacy  subjectivity  information_brokers  intentionality 
march 2012 by jerryking
Easy Credit and the Depression - WSJ.com
MAY 5, 2009 | Wall Street Journal | by L. GORDON CROVITZ.
Judge Richard Posner's "A Failure of Capitalism: The Crisis of '08 and
the Descent into Depression". Explains behavior that looks irrational in
retrospect shows that it was logical, based on incentives at the time.
Prevention requires regulators with access to public and private
information to track systemic risk and clear, predictable rules for how
the Federal Reserve and other regulators would respond to various risk
situations.
L._Gordon_Crovtiz  economic_downturn  Richard_A._Posner  risks  book_reviews  credit  predictability  failure  U.S._Federal_Reserve  regulators  incentives  information  information_flows  irrationality  systemic_risks  causality  public_information  private_information  hindsight  rules-based 
may 2009 by jerryking

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