Security Traders Meet To Navigate New Landscape

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The older generation of traders wouldn’t even recognize the U.S. markets anymore. The past decade has brought so many changes to the trading landscape that even today’s traders need help navigating the new territory. Technology has reduced the number of floor traders because of its ability to speed up an order as well as make the trade more efficient. The arrival of Order Management Systems has allowed traders to place orders in multi-asset classes. While the Reg NMS standards have been put in place to keep a fair and competitive U.S. marketplace, they too have altered the landscape…and we haven’t even gotten into the European markets with its MiFID initiative.

To discuss these and other recent developments, traders and industry professionals gathered at the Security Trader’s Association (STA) 82nd Annual Mid-Winter Event. The conference, which was put together by the Chicago division of STA, was held January 10-13, 2008 at the Chicago Hilton.

The three-day conference had a packed agenda including a panel covering Chicago’s buy side perspective on the marketplace. The discussion touched upon the sometimes volatile relationship between the buy and sell sides. During one heated panel discussion, buy side traders accused the sell side of exaggerating the amount of trades they actually made and the sell side accused the buy side of not making their orders clear enough. After the discussion calmed down, the participants on the panel explained that it was important to have a personal relationship with their sell-side counterparts. The panelists agreed that trust between the two parties is a key factor in successfully executing trades.

Alternative Trading Systems were also a hot topic. Kain Cederberg who sat on the panel from Institutional Capital, explained that, with the emergence of electronic venues, buy side institutions felt that they might be “in it for a while,” with regard to ATS.

Among the buy side speakers, the ominous sounding topic of “dark pools of liquidity” had many participants following the discussion. Joe Buerillo of IronBridge Capital Management, said his problem with these black holes in the marketplace is that you don’t know who is seeing the trades take place. He did admit that dark pools are part of the trading landscape and that the buy-side would have to learn to live with them, for now.

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Taking Your Leadership Skills to the Next Level: Unique Challenges, Opportunities and Trends

The Financial Women’s Association is offering a fast-paced workshop to enhance and fine-tune your leadership skills. The speakers panel will include: Carol Frohlinger, Jane Linder, Stacie Nevadomski Berdan, and Shoya Zichy.

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The Write-Down and Layoff Roundup

The news on Wall Street has been pretty grim, no doubt about it. Here, in the manner in which we would normally bow our heads for a moment of silence, we recap the avalanche of write-downs and looming layoffs announced by major financial institutions this week.

On Tuesday, January 15, 2008, Citi dropped the bomb that it would be writing down $18 billion in the fourth quarter because of its subprime mortgage exposure. The Glass Hammer published an article in November about star analyst Meredith Whitney of CIBC World Markets and her prediction that Citi would be forced to cut dividends in the wake of the subprime debacle. At the time, this call was met with stiff denials by Gary Crittenden, Citi’s CFO, during a November 5 conference call and a general backlash by other investors. However, as reported in the New York Times Dealbook blog, Citi was forced to eat a huge slice of humble pie yesterday when it announced that it would cut its dividend by a whopping 41% in order to shore up capital.

Oh, and as if that weren’t bad enough, Citi is likely to announce job cuts of about 4,000 positions, many of which will be in investment banking. That would follow the bank’s announcement that it was cutting 17,000 jobs in April 2007. At the end of 2006, Citi had about 327,000 employees.

Despite Bank of America’s $4 billion deal to buy floundering mortgage giant Countrywide this week, the bank announced a 32% drop in third quarter profits, a 93% hit to investment banking profits and big layoffs to come. In light of this, in a much maligned and scoffed at cost-cutting measure, BofA released a memo indicating that it would no longer be stocking its office kitchenettes with the following items, “soup, crackers, flavored teas, sugar free hot chocolate, and soap.” What? This American banking giant can’t spring for soap anymore? Can a sister get some Purell around here? However, BofA spin managers responded to the outrage by promising to bring back the soap. Still, this sign of the times is too depressing.

Is there a light at the end of the tunnel? If so, it’s probably in the form of a sovereign wealth fund. Citigroup and Merrill Lynch both announced on Tuesday that they would raise a combined $19.1 billion from government-backed funds in Korea and Kuwait. Never thought you’d see the day when Japan, Saudi Arabia, Kuwait, Singapore, Korea and China joined forces to bail out America’s largest investment banks? Well then you might be the only one on Wall Street who’s having a lucky day.

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The Central & Eastern European Forum 2008

Euromoney is sponsoring the premier investment event for the CEE region. Speakers will include Dr. Hannes Androsch, & Dr. Leszek Balcerowicz.

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Pace Law School Offers Program for Returning Lawyers

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new-directions-class.jpeg You graduated from law school. Then, you practiced for a few years or pursued a career outside of the law. After you had your first child, you decided to scale back to part time. After the second one, you decided to take a few years off while the kids were small. You planned to go back to work when they started school. That was ten years ago.

If this profile describes you, you are not alone. Many lawyers take time off to raise a family or pursue another profession — perhaps a field they worked in before attending law school – with the intent to return to practice, only to find that the job market has changed significantly while they were away from the law. Not sure if their skills and contacts are relevant in today’s market, they have a hard time returning to the law.

Pace University School of Law recognized the need for a program that helps lawyers return to the law after some time away from practice. Administrators there conceived of the unique and innovative New Directions program to help lawyers returning to practice improve their skills and gain practice experience before going back on the job market. This program was recently profiled in a New York Times article called “Mom? Lawyer? The Ambivalence Track.”

The Glass Hammer interviewed Amy Gewirtz, Associate Director of Alumni Counseling and Relations in the Center for Career Development at Pace Law School, and Associate Director of the New Directions Program, to find out more about this exciting opportunity for returning professionals

The New Directions program, which graduated its first class in December 2007, was created by Ms. Gewirtz, along with Deb Volberg Pagnotta, Director of the program, and Mark Shulman, Assistant Dean for Graduate Programs and International Affiliations at Pace Law School. It was developed in collaboration with the Westchester Women’s Bar Association, which played an important role in helping with extern placement and networking with association members. In addition, Maja Hazell, former assistant Dean for Career Development, was fully supportive of the idea. Without her support, the program would not have gotten off the ground.

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Female CEOs in Tech — A Dying Breed or a Growing Flock?

Silicon Valley is buzzing about women CEOs in tech, although whether there are more—or fewer—CEOs seems to be in question.

Last week, USA Today ran a piece highlighting how many more opportunities there are for women in technology and profiled several women CEOs in top tech firms. On the very same day, the San Jose Mercury News ran a piece entitled “Female CEOs At Top Silicon Valley Tech Firms Down To Zero.”

Is this an issue of perception, accounting, or semantics?

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Voices of Experience: Dorothy Price Hill

For our Voices of Experience series, The Glass Hammer interviewed Dorothy Price Hill and asked her about her experience in private equity and her advice for young women in finance who might be interested in pursuing a similar career path.

Ms. Hill is the Director of Investor Relations and Business Development at a New York-based private equity investment firm specializing in buyouts and buildups of business services companies at the lower end of the U.S. middle market. She has a 14-year record of accomplishment in alternative investments and investment banking, including experience in private equity, hedge funds, risk management, investor relations and capital markets.

Prior to her current role, Dorothy worked for Capital Dynamics, Deutsche Bank, McKinsey, Siemens and the Council on Foreign Relations. In the 1990’s, she spent six years overseas with Goldman Sachs during the firm’s major international expansion and completed assignments in Japan, Hong Kong, Germany, Switzerland, the UK and France working with corporate and high net worth clients.

Ms. Hill holds an M.B.A degree from the NYU’s Stern School of Business and a B.A. from Dartmouth College. She is a guest lecturer at the Stern School of Business; serves as co-head of the New York City chapter of 85 Broads, the Goldman Sachs alumnae network and does annual fundraising for Mt. Sinai Hospital’s Neo-Natal Intensive Care Unit, among other organizations.

How did you get started in financial services?

I became interested in financial services after meeting several financial-firm CEOs in my first post-college job at the Council on Foreign Relations in New York City. There, I had the opportunity to work with Fortune 500 CEOs, leaders of non-profit organizations, and other world leaders and prominent academics.

Please tell us how a past success – or failure – has helped you learn and grow.

While I’ve been lucky to work for some great firms in positions of increasing responsibility, my career path has not always been smooth. I once worked for an organization led by a highly-experienced financial professional who was borderline abusive to his colleagues, and while it wasn’t fun, it was a tremendous learning experience. I learned a lot about the psychology of working with others and what does, and does not, work in terms of motivating colleagues and teams.”

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Five Fabulous Things to Blow Your Bonus On

So it may not have been the best year for women in finance, or even the best year for finance professionals in general. Still, for those of you who work at top performing places like Goldman Sachs or hedge funds that shorted subprime loans this year, Santa might still be squeezing down the chimney for you at bonus time. But the holidays are over, and now, if you have some money to burn, might as well spend it on yourself. Drowning your sorrows in retail therapy? We can help with that too.

Here at the Glass Hammer, we present five fabulous symbols of conspicuous consumption to help liberate your bank accounts of that bonus …

  1. blackdiamondbirkin.jpg Crocodile Birkin Bag by Hermès. This bag is the ultimate luxury indulgence. While some coveted models have a waitlist as long as six years, other models can be found on shorter notice. While this diamond-encrusted 40 cm black crocodile patent Birkin will set you back a cool $65,000, it will certainly announce to the world that you have arrived. Less outrageous models available from $6,000. Even if you can’t afford your very own yet, you can head over to the new Hermès location right on Wall Street and ogle till your heart’s content, or at least pick up a more reasonably priced scarf. Read more
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Fifth IEEE Consumer Communications & Networking Conference

IEEE Consumer Communications and Networking Conference, sponsored by IEEE Communications Society, is a major annual international conference organized with the objective of bringing together researchers, developers, and practitioners from academia and industry working in all areas of consumer communications and networking.

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New Futures Exchange to Compete with Chicago Mercantile Exchange

As if the financial industry hasn’t seen enough of a market shake-up in recent months, a new futures exchange is set to launch in early 2008. The exchange, backed by heavy hitters in the capital markets, will serve as a low-cost alternative in the existing futures market. The exchange will start trading U.S. Treasury futures and then move into currencies, stock indexes and wheat products.

Founders of this new venture were concerned that the Chicago Mercantile Exchange (CME) Group, a working collaboration of the Chicago Mercantile Exchange and the Chicago Board of Trade, had cornered the futures market and inflated prices. To bring competition to the futures industry, Merrill Lynch, JP Morgan, Citigroup, Barclays Capital, Credit Suisse, the Royal Bank of Scotland, Bank of America and Deutsche Bank have formed an alliance to spawn this yet unnamed futures exchange.

Other investors in this exchange include the online company e-Speed, which will provide electronic trading platforms and three Chicago based trading firms: Peak 6, Getco and the hedge fund giant Citadel.

Robert Hamada, a former Chicago Board of Trade (CBOT) director, recently spoke with the Chicago Tribune about the new exchange. He said that the founders of the new futures exchange wanted to prohibit the CME Group from becoming a “monolithic monopolist.”

“What keeps prices down is the potential for competition,” Hamada explained.

While many believe the industry needs this competition to thrive, others see this move as a sign of a major industry overhaul.

John Lothian, a futures broker, reminded investors of Cantor Fitzgerald’s attempt at forming an exchange in 1999 and of BrokerTech, a combined effort by investment banks in 2001. Both failed as competitors but did prove successful as change agents.

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