UBS

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 |2020-10-14T21:47:06-04:00June 18th, 2020|For Subscribers|
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Virtu Financial: More Acquisitions on the Way, If…

When we launched our first trading program at Quantlab in the late 90's, we didn't have direct market access yet. We generated an order list (overnight) that was worked throughout the subsequent market session at the discretion of an algo-equipped executing broker; some of whom now roam the halls at Jefferies / Leucadia. This was the era when 1- to 3-day portfolio turnover was considered fast - SOES bandits were still a thing - and Schwab would soon acquire electronic trading pioneer, CyBerCorp, from Philip Berber - a short drive down the road from our Houston headquarters in Austin, TX. Of course, everyone had nicknames then - as I suspect they still do now. Ed Bosarge, founder of what eventually became Quantlab (after at least 3 prior related incarnations that began for me around 1996), was known as Dr. Evil. Let's just say it's a hair-raising story about a swashbuckling pioneer of applied math involving a hideous toupee... I was known as Mr. Bigglesworth - or, "Bigsy" for short. No [...]

By |2020-10-05T21:19:11-04:00March 27th, 2018|Open|
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Bulge Bank Headcount Index: Rare Uptick in Q2

It's only happened twice since the peak, recorded nearly 6 years ago (at the end of Q3 2011): Alphacution's bulge bank headcount index has recorded a rare uptick, as of the end of Q2 2017 (see Exhibit, below). Now, of course, it may be too soon to sound the trumpets that a major turn has been made for headcount in the global banking sector. The moves - in either direction - are still small. Although, who knows? Maybe the expectation of regulatory rollbacks has got bank hiring managers feeling more exuberant of late. Or, maybe - as we suggested in our prior post - that process automation, particularly among quant shops, actually requires more people is something that applies more broadly in financial services (given the push to implement more AI). One thing is for sure, most of our bulge banking tracking sample (7 of 9) is bigger in terms of headcount than they were more than 10 years ago. Only UBS and Citi are smaller, but that has been [...]

By |2020-08-17T07:14:09-04:00August 30th, 2017|For Subscribers|
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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 |2020-08-17T07:14:09-04:00June 1st, 2017|For Subscribers|
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Welcome Back to 2006: Top #InvestmentBanking Headcount Roundtrip

Well, it would have been the Top 10 investment banks, but @Barclays doesn't publish quarterly headcount for some reason. Maybe they will help us fix that. Anyway, for the Top 9 investment banks, total headcount is down 13% from its peak in Q3 2011. And, with at least 2 of the 9 - @Deutsche Bank and @CreditSuisse - reporting significant headcount reductions for the road ahead as part their year-end 2016 financial releases and 2017 guidance, it's not much of a stretch for us to predict that the Wonkavator is highly likely to travel further back in time than year-end 2006 (see below). I just want to let this picture dangle for a bit without much comment. We will be revisiting and significantly expanding this analysis in the weeks and months ahead as we roll into the development of our 2nd Annual Global Bank Technology Spending study. Stay tuned...

By |2020-10-05T21:13:02-04:00March 2nd, 2017|Open|
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Technological Implications of Cultural Transformation – Numerix Video Blog Series

In this FOURTH of a five-part video blog series Jim Jockle, CMO of Numerix sits down with Paul Rowady, Director of Research at Alphacution to discuss the recent FinTech Revolution. They discuss how firms are gearing themselves towards a digital culture, and how companies are working to distinguish themselves in this new age. The five videos cover the following: Part 1: Paralysis by Analysis: Preparation & Analyzation for Digital Disruption Part 2: IT Outsourcing and Transformation Part 3: Revolutionizing FinTech: Looking into the World of Data Automation Part 4: Technological Implications of Cultural Transformation Part 5: Digital Noise in the FinTech Space Jim Jockle (Host): So let me go to your research. You know you suggested a little bit, there’s the differentiators in terms of maximizing our opportunity and then there’s a congested middle-of-the-pack. Transitioning, so yes you had the Fords, who arguably have done very well in that or a transitionary period of time but you also saw the Hondas and Toyotas come out of nowhere and things of [...]

By |2020-10-14T21:53:58-04:00December 5th, 2016|Video|
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