Trick Shot: Robinhood Underwrites MEMX

“Principles for the Development of a Complete Mind: Study the science of art. Study the art of science. Develop your senses - especially learn how to see. Realize that everything connects to everything else.” - Leonardo da Vinci   If there ever was a time to see how things are connected to other things, it is now. This is particularly true in places where something that is "free" is interpreted to be "without cost." After all, like "free" drinks at the casino, human nature tends to regress to its most lizard-like tendencies when presented with a frictionless environment... When will we ever learn that "free" is never the best price? Anyway, without becoming distracted by a rant about the true cost of Facebook, et al, let's take a brief look at the impact of "commission-free" trading on the macrostructure of the US market ecosystem over a very short window since October 2019: Thanks, in large part, to the popularity of retail broker, Robinhood Financial, LLC ("Robinhood) - the upstart financial [...]

By | 2020-06-18T00:20:58+00:00 June 18th, 2020|Alphacution Feed|

Bulge Bank Headcount Index – Q4/2017

Though still tracking at levels last seen in early 2007, Alphacution's index of "bulge bank" headcount - updated through year-end 2017 - continues to walk a tight rope of relative stability as it has continued to do so for most of the past 8 quarters (see exhibit below). This news also seems to track with the prevailing belief and commentary that the US economy is in relatively good shape - if not, at least, stable. As always, a look into the details - and specific banks - yields a more vivid story: For starters, and including Wells Fargo & Company (WFC), 5 of the 10 banks in this analysis are within 5% of their maximum headcount over the past 45 quarters. (Goldman Sachs and RBC are within 1%.) Meanwhile, with the index down approximately 150,000 employees from its high water mark in mid-2011, Citigroup and BAML have shrunk by 166,000 and 81,000, respectively, from their maximums. Rankings of individual bank headcount indices can be found below... WFC, the largest US [...]

By | 2018-02-28T16:29:07+00:00 January 16th, 2018|Alphacution Feed|

Global Banking Brain Drain Slowing

Brain drain - in this case meaning the loss of valuable human capital - is one of those silent malignancies in an organization that is difficult to measure, and the impacts from which are typically not realized until the damage has already been done. With the global banking sector - and its constituent business segments, from retail banking to wealth management to capital markets - still in the midst of unprecedented and persistent transformation, the risk of ongoing losses of intellectual capital and corporate memory that leave via the elevator each day is still quite high - or, at least, it is perceived to be so. (The knock-on effects to the supply chain are notable here, as well.) It is largely for this reason that we have been monitoring and measuring various headcount-dependent metrics in the financial services ecosystem: Interesting and telling on a per-company basis, fascinating and illuminating of broader trends on a composite basis. The former being a weaker intelligence signal, the latter being a much stronger signal. So, here's [...]

By | 2018-02-28T16:30:37+00:00 June 1st, 2017|Alphacution Feed|