Finance – Page 13 – Abnormal Capitalist

Psyching Out Borrowers

Follow-up on yesterday’s article about personality tests approval to get loans. Payoff adds a touch of algorithms on top of psychology to determine the creditworthness of the borrower.

Galen helped develop the matching algorithms at eHarmony, which are responsible for 4 percent of U.S. marriages. We’re using his expertise to bring psychology to finance. Our science is ultimately about behavior change and helping people make better financial decisions. This process of change begins with self-understanding, and we’re using advanced psychometric assessments to understand people’s mindsets— the goal being to improve how they approach their financial decisions. We’ve taken the hundreds of questions you might answer in a typical psychometric assessment and compressed them into a three-minute “gamified” online assessment that gauges your financial personality.

→ Bloomberg

Goldman vs. Bloomberg

Will Goldman ever turns Bloomberg into Blackberry ? Ain’t a sure thing.

It’s something like the social register for the global one percent, mixed with the Gutenberg press and a little bit of the iPhone. Getting even more reductive, it’s the ball in tennis: it’s hard to imagine the financial industry without it. As such, many banks and hedge funds gladly shell out the $21,000 or so per unit. Some trading floors, in fact, resemble primal villages in which the biggest bosses can be identified as the guys with the most terminal screens mounted on their desk. Bloomberg L.P. throws off around $9 billion in revenue, making it about as valuable as the N.F.L.

→ Vanity Fair

Rain Man In Trouble

The Unraveling of Tom Hayes, Pt. One :

Ms. Tighe printed out the settlement documents and went through them with a yellow highlighter, with Joshua balanced on her lap. She was relieved. They made it clear that Libor manipulation was widespread. Her husband wasn’t even named.

That evening, as she prepared a joint of roasted lamb for dinner, Mr. Hayes sat nearby, puttering on his Apple laptop. A news alert popped up. Mr. Hayes clicked the link. A video of the U.S. attorney general at a news conference in Washington started playing.

“Sarah, I’ve been charged by the U.S.,” Mr. Hayes announced.

Credit : Peter Mlekuz, Janko Klavora

→ The Wall Street Journal

How to Catch Spoofers Who Manipulate Markets

Of course, honest traders change their minds all the time and cancel orders as economic conditions change. That’s not illegal. To demonstrate spoofing, prosecutors or regulators must show the trader entered orders he never intended to execute. That’s a high burden of proof in any market.

→ Bloomberg

Black Monday, Kinda

Monday, August 24th brought you one of the weirdest trading day ever seen in the past several years.

So to sum up what happened today, here are a few charts, courtesy of Bloomberg, ZeroHedge and NANEX — time of the events may vary :

It all started sometimes in China, when it’s business as usual these days :

S&P Futures followed, kissing the dirt :

Which then started a major liquidity squeeze on the US market, as seen on the following charts by NANEX :

Causing buy-sell orders to never quiet match — courtesy of ZeroHedge :

Shortly after the opening bell, something like this on the Dow Jones :

And an impressive rise on the VIX :

In the meantime, major (mini) crashes :

To prevent further deterioration, just press the “HALT” button across major indices, including 3 consecutive press on the NASDAQ and 1’200 times during that day :

Then the master of markets, Tim Cook, dropped an email to Jim Cramer stating the following :

I get updates on our performance in China every day, including this morning, and I can tell you that we have continued to experience strong growth for our business in China through July and August. Growth in iPhone activations has actually accelerated over the past few weeks, and we have had the best performance of the year for the App Store in China during the last 2 weeks.

Which caused this :

Then, all of a sudden, while unrelated from the previous event — well, who knows :

Oups…

…While European markets will stay stucked for a little longer :

There’s more to it for sure, but here are some events, mostly correlated, to show the newcomer what’s up for today on the trading side.

Finally here’s a fun tweet from Josh Brown :

@ReformedBroker: Look, it doesn’t matter what you bought or what you sold. The important thing is that you panicked.