America’s big banks are staffing up—for blockchain
September 2, 2016
IBM this week announced a massive internal re-organization to cater to blockchain.
It is one of many recent signs that the peer-to-peer ledger technology, which first came along with the digital currency bitcoin, has serious future applications in big business. Or it is at least a sign that big companies are convinced they ought to examine it further. (What exactly is blockchain? Watch this primer video.)
The computing giant will create a new unit called Watson Financial Services to encompass Watson, cloud, and all blockchain-related offerings and strategy. Bridget van Kralingen, IBM’s senior VP of global banking services, will take on the role of building the unit, and take a new title, VP of industry platforms. To replace van Kralingen in global banking services, IBM has hired Mark Foster, a former Accenture executive.
IBM says that it has created new roles specifically devoted to blockchain, and will create more, but it declines to share how many.
Search for “blockchain jobs” on job sites like Monster.com and Indeed and you’ll find more than 100 at some, posted by companies like IBM, Fidelity, BNY Mellon, JPMorgan, Bank of America, Capital One, American Express, Citigroup, Cognizant and Infosys.
Blockchain job openings on Monster.com
There are, of course, many jobs listed at companies like Circle, a payments app that uses the bitcoin blockchain, and at Chain, which creates custom blockchains for clients like Visa, Citi and Nasdaq (see below video from May), but those are the companies you would expect. They are companies that exist squarely in the digital currency or blockchain space.
To see blockchain job openings at big banks, payment processors, or financial firms is the surprise. It suggests that blockchain tech is creating new jobs—hundreds of them, for now, not thousands.
As Computer World UK wrote in May, “Demand for distributed ledger expertise is on the rise.” (While many jobs require coding and technical proficiency, some of them are closer to traditional management positions.) And J. Christopher Giancarlo, commissioner of the US Commodity Futures Trading Commission (CFTC), wrote an op-ed in May encouraging companies to “Do no harm to the blockchain” because “American jobs depends on it.”
America’s big banks are staffing up—for blockchain
Adam Ludwin, CEO of Chain, joins Yahoo Finance's Dan Roberts to discuss how the financial industry is gearing up for blockchain.
Getting rid of friction—and maybe humans—in banking
To be sure, blockchain will likely eliminate jobs in the long run, too, if it fulfills its promise as an efficiency-improver for big financial giants. Giancarlo had to acknowledge such in his own op-ed about the job benefits of blockchain: “Still, the blockchain revolution will not come without adverse consequences, including a likely drop in the human capital that supports the recordkeeping and transaction processing of today’s financial markets.” A report from Citi this year predicted that blockchain and other automation in retail banking could eventually eliminate 30% of jobs at banks in the US and Europe.
“That’s absolutely right,” says Jerry Cuomo, IBM’s VP of blockchain, who will report to Van Kralingen in the new unit. “At some level, the efficiency you get from blockchain is to create more of a B2B service without the friction. And many financial services companies are the friction in the system, by design.”
But companies exploring blockchain are still in the experimenting stage, where they need to bring new people on, rather than cut people because blockchain tech has made them non-essential.
“I think the year started with blockchain tourism running rampant—in a good way,” says Cuomo. “And the tourism business is rapidly turning into hands-on engagement. I think this is where blockchain as a service really aided that desire to enable developers to rapidly experiment with applications, and business folks to witness the transformative power. Users and institutions have gone from, ‘What is this thing? I want to know more about it,’ to, ‘Okay, I’m in.’”
IBM has rolled out a bevy of new blockchain services over the last year, including its own IBM Blockchain that runs on Bluemix, IBM’s cloud infrastructure, and this month a new secure blockchain platform for developers to access Hyperledger, a large-scale blockchain project with many different companies on board. And IBM is working on separate blockchains for specific business needs of IBM clients, such as, to name one example, dispute management.
In official press releases, the company is already calling itself “the leader in blockchain.”
Blockchain as a service (BaaS)
But IBM is hardly the only big corporation jumping in. Intel, JPMorgan, and Accenture are all “premier level” members of the Hyperledger project, along with IBM. And Cisco, BNY Mellon, and Wells Fargo are among the general level of members.
Microsoft took a different tack, launching its own Project Bletchley over its Azure cloud platform in June. PC Magazine writes that IBM and Microsoft are the two giants “defining” the new blockchain as a service (BaaS) market, and called their efforts “dueling initiatives.”
For what it’s worth, based on a check of three job web sites, IBM is hiring many more blockchain-related positions than Microsoft at the moment.
Tension between bank chains and bitcoin blockchain
Meanwhile, a core tension still exists between the bitcoin community, where blockchain technology first came around, and those in banking and finance that want to create their own private blockchain applications. The difference is one of not just practice but theory: Bitcoin and digital currency believers feel that the very point of blockchain is to be open, “permissionless,” anonymized, accessible to anyone. Those in the banking world are alarmed by such a lack of restriction, and instead are working on safer, “permissioned” blockchains, where participants must be verified and known.
It’s also about speed, says Ludwin of Chain. Because of the limited, processing power of the bitcoin blockchain, big companies like Visa, Citi, and Nasdaq “don’t build on bitcoin, and probably won’t if the goal is to keep bitcoin decentralized.”
Cuomo of IBM has his own explanation: regulatory concerns. “We’re still very much [focused] on the permissioned blockchain, which could either be public or private, but you need a membership card to get in,” he says. “That seems to be resonating with any client or user group that falls under any kind of regulation. If the data you use falls under regulatory rule, where you need to know your customer who is accessing your data, Ethereum and bitcoin-based blockchains aren’t going to help you with that. That would be a very large group to say no to, and we’re saying yes to them.”
But Cuomo gives a caveat: no one quite knows where all of this is heading for sure. “I don’t believe there will be one blockchain to rule them all,” he says. “I believe there will be many. This is all going to take time. And I think we will get there.”
For some perspective on the stock market, today's chart presents the Dow's average performance for each calendar month since 1950. As today's chart illustrates, it is not unusual for the stock market to underperform during the May to October time frame with a brief counter-trend rally occurring in July. It is worth noting that the worst calendar month for stock market performance over the past 66 years has been September.
Getting from here to there is a growing problem for many as they age. Ride-sharing services such as Uber and Lyft may solve this problem in the future. The potential market is huge. One in four Americans aged 65 or older reports having trouble getting places, according to the Medicare Current Beneficiary Survey. One in five has given up driving altogether, and one in three drives only in the daytime. Here are the percentages by age...
Has trouble getting places 65 to 74: 18.5% 75 to 84: 26.5% 85-plus: 44.6%
Limits driving to daytime 65 to 74: 24.8% 75 to 84: 39.2% 85-plus: 55.3%
Has given up driving altogether 65 to 74: 11.3% 75 to 84: 21.2% 85-plus: 46.5%
Source: Federal Interagency Forum on Aging-Related Statistics, Older Americans 2016: Key Indicators of Well-Being
Major banks, ICAP join up to create digital currency
Aug 24 2016, 04:36 ET | By: Yigal Grayeff, SA News Editor
UBS (NYSE:UBS), Deutsche Bank (NYSE:DB), Santander (NYSE:SAN), BNY Mellon (NYSE:BK) and broker ICAP (OTCPK:IAPLF) have teamed up to create a digital currency called the "utility settlement coin.
The firms hope that the currency will become an industry standard used to clear and settle financial trades over blockchain, the technology that bitcoin is based on.
The banks and ICAP are pitching the idea to central banks and hope to launch the utility settlement coin in early 2018.
The project is competing with similar initiatives from the likes of Citibank, Goldman Sachs and JPMorgan, which are developing separate digital currencies.
"Today trading between banks and institutions is difficult, time-consuming and costly, which is why we all have big back offices," says Julio Faura, head of R&D and innovation at Santander. "This is about streamlining it and making it more efficient.
How Americans go online is changing. Those changes are being documented by the National Telecommunications and Information Administration as it analyzes the biennial Computer and Internet Use Supplement to the Current Population Survey. Among Americans aged 3 or older who go online at home, these are the devices they used in 2015 and 2011...
Go online at home using device, 2015 (and 2011) Smartphone: 53% (27%) Laptop computer: 46% (42%) Desktop computer: 34% (45%) Tablet computer: 29% (6%) TV-connected device: 27% (14%) Wearable device: 1% (0%)
Source: National Telecommunications and Information Administration, Evolving Technologies Change the Nature of Internet Use and Majority of Americans Use Multiple Internet-Connected Devices, Data Shows
Homeownership rate of householders aged 30 to 34, second quarter 2016: 44.8%
The homeownership rate of households headed by people aged 30 to 34 fell to a new low in the second quarter of 2016. The 44.8 percent second-quarter homeownership rate was down from 45.7 percent in the first quarter of 2016 and well below the previous all-time low of 45.2 percent in the second quarter of 2015. The homeownership rate of the 30-to-34 age group had been fairly stable since hitting bottom in 2015. This new low could be a statistical bobble or a resumption of the downward trend.
Historically, homeownership became the norm in the 30-to-34 age group—rising above 50 percent. But beginning in 2007, the homeownership rate of 30-to-34-year-olds went into a tailspin. In the second quarter of 2011, the rate fell below 50 percent for the first time. It's been stuck there ever since. The new age of first-time home buying is 35 to 39, but even this age group has been slipping toward the 50-percent threshold. In the second quarter of 2016 the homeownership rate of 35-to-39-year-olds was 55.2 percent, barely above the all-time low of 55.1 percent recorded in the second quarter of 2015. The homeownership rate of 35-to-39-year-olds peaked in the first quarter of 2007 at 65.7 percent.
Nationally, the homeownership rate was 62.9 percent in the second quarter of 2016, down from 63.4 percent a year earlier and the lowest homeownership rate since 1965.
Because there are few bears the contrary approach indicates this market is in the area of a top. Add in the consistently low VIX, fear indicator results in a similar conclusion that the market is in the area of a top.
For some long-term stock market perspective, today's chart illustrates the inflation-adjusted Dow since 1900 -- there are several points of interest. Take for example an unlucky buy-and-hold investor that invested in the Dow right at the dot-com peak of December 1999. A decade and a half later, the inflation-adjusted Dow is up a mere 12%. That is not altogether an impressive performance considering that over 16 years have passed. On the other hand, take the investor who bought right at the end of the financial crisis. The inflation-adjusted Dow is up a significant 129% from its financial crisis lows -- not bad for a for a seven year investment. More recently, the inflation-adjusted Dow has rallied and is now only 1.2% away from a new all-time record high. www.chartoftheday.com/20160727.htm?H
Just over 1 million immigrants were granted legal permanent residence in the United States in 2014, according to the Department of Homeland Security. The 2014 number was slightly greater than the 990,553 of 2013 but fewer than in any other year since 2004. The peak year for legal immigration was 1991, when 1.8 million immigrants were admitted to the United States.
Legal Immigrants in 2014: Top 10 Countries of Birth Total immigrants: 1,016,518 (100.0%) Top 10 countries: 518,433 (51.0%) 1.Mexico: 134,052 (13.2%) 2.India: 77,908 (7.7%) 3.China: 76,089 (7.5%) 4.Philippines: 49,996 (4.9%) 5.Cuba: 46,679 (4.6%) 6.Dominican Republic: 44,577 (4.4%) 7.Vietnam: 30,283 (3.0%) 8.South Korea: 20,423 (2.0%) 9.El Salvador: 19,273 (1.9%) 10.Iraq: 19,153 (1.9%) Source: Department of Homeland Security, 2014 Yearbook of Immigration Statistics
The Q Ratio and Market Valuation: March Update with Z1 Data
March 10, 2016
by Jill Mislinski
Note: We've posted an update to incorporate the Z1 Financial Accounts data through Q4 2015.
The Q Ratio is a popular method of estimating the fair value of the stock market developed by Nobel Laureate James Tobin. It's a fairly simple concept, but laborious to calculate. The Q Ratio is the total price of the market divided by the replacement cost of all its companies. Fortunately, the government does the work of accumulating the data for the calculation. The numbers are supplied in the Federal Reserve Z.1 Financial Accounts of the United States of the United States, which is released quarterly.
Last Edit: Feb 23, 2016 17:22:30 GMT -6 by jeffolie
ace comando: Well, it took me several days and a lot of code writing to sift through the millions of achieved pages on the Wayback Machine achieves. Was about to give up when a colleague gave me mining script to look at all archived pages whether displayed or not. And
Feb 24, 2017 19:44:10 GMT -6
unlawflcombatnt: I've now changed the colors on the board to something more readable. At least now readers can find the sign-in tab.
Jul 6, 2014 22:58:23 GMT -6
unlawflcombatnt: OldUser-the sign-in area is in the dark area immediately under the red section that says Economic Populist Forum. It's almost impossible to see, unless you know where to look. This was ProBoards idea, not mine.
Jun 12, 2014 11:52:53 GMT -6
OldUser: There's no link on here to sign on or login. Where'd it go?
May 29, 2014 8:44:44 GMT -6
jeffolie: One might short a bull ETF to gain the decay but this requires a margin position subject to changes imposed by the exchanges & brokers
Oct 26, 2013 13:26:07 GMT -6
jeffolie: Holding a stop loss in these algo dominated markets almost always means the algos will hit your stops
Oct 26, 2013 13:20:09 GMT -6
jeffolie: Even so, these leveraged ETFs do not create margin calls nor expiration dates thus allowing one to hold indefinitely
Oct 26, 2013 13:17:52 GMT -6
jeffolie: Yes, the ETF features fading/leveraged decay because the futures and/or options used decay plus the administrative costs rise the decay, declining value ... I accept this as a cost and feature of all ETFs that purchase futures/options to maintain price
Oct 26, 2013 13:15:38 GMT -6
mimzy: Sorry, here is the article http://blog.quantumfading.com/2009/06/01/leveraged-decay/ I don't post that often, sometimes computers get away from me b4 I can edit.
Oct 25, 2013 20:49:11 GMT -6
mimzy: jeffolie ~ I've been reading/lurking you for a year or three now and was wondering if your could you explain how you overcome quantum fading/leveraged decay in your ETF short position of the DJIA?
Oct 25, 2013 20:46:26 GMT -6