Bye Bye Bulletin Board

Hot off the Dow Jones Newswires: Steps on the NASDAQ’s road to becoming a full-fledged SRO and second node in the NASDAQ-NYSE would-be world duopoly.

The Securities and Exchange Commission issued two orders Monday to help the Nasdaq Stock Market (NDAQ) move toward becoming a full-blown stock exchange.

Nasdaq, long a national securities association, was cleared to become an exchange on Jan. 13 and the formal transition is expected to occur Tuesday. To avoid having thousands of Nasdaq-listed companies file new paperwork registering their securities for sale on the exchange, the SEC agreed to have Nasdaq file a single application for all its previously-registered companies, effective July 31.

In addition, the SEC issued a second order allowing Nasdaq members, brokers and dealers to execute trades until Aug. 1, 2009, in 13 Nasdaq-listed firms that were previously exempted from SEC registrations. Nasdaq sought the relief saying an immediate registration requirement could prompt the firms - four insurance companies and nine non-U.S. firms - to withdraw from Nasdaq trading altogether.

The SEC said a three-year exemption is appropriate and should give the firms adequate time to register their securities if they decide to continue trading on Nasdaq. The registration requirement could require the non-U.S. firms to reconcile previously issued financial results to comply with U.S. accounting rules.

Boston Commons

The bad news:

Despite efforts around the country, no universal wireless network is up and running in a major American city.

The good news for chowderheads: Hub sets citywide WiFi plan.

By Robert Weisman, Boston Globe, July 31, 2006

Boston will tap a nonprofit corporation to blanket the city with “open access” wireless Internet connections, under a plan to be unveiled today by Mayor Thomas M. Menino.

The task force report in Boston anticipates that it will take up to two years to blanket the city with radio transmitters, or routers, and wireless Internet access points.

The plan, which envisions raising $16 million to $20 million from local businesses and foundations, is a striking departure from the business models used by other cities, including Philadelphia and San Francisco, which have turned over responsibility for their wireless data networks to outside companies such as Earthlink Inc. and Google Inc.

Obrador Update

“Subcomandante Marcos, what have you to say to Obrador and the PRD”? “Talk to the finger ’cause the face don’t wanna hear it.”

WSJ passes on the wire service copy: the sore losers who says he won the Mexican elections but was defrauded takes the battle to the financial district — much as the Falun Gong does on Wall Street, or used to before the Street became a discreetly but heavily armed enclave and maximum surveillance zone.

Getting in the faces of the people whose wasted time is worth the most money is accepted as a solid bit of tactics, I guess. Makes sense.

MEXICO CITY (AP)–Hanging protest banners from sculptures and pitching tents in the middle of Mexico City’s historic Reforma boulevard, supporters of the country’s leftist presidential candidate paralyzed the city’s main financial district Monday and refused to leave until the top electoral court ruled on their demands for a recount in the disputed race.

Leftist Andres Manuel Lopez Obrador spent the night in a tent in the city’s main Zocalo plaza, where thousands of his supporters joined his fight. Others set up makeshift camps by the dozens along the tree-lined Reforma boulevard, braving chilly, intermittent rain throughout the night and blocking most east-west traffic on one of the main arteries in this megalopolis of 20 million people.

The protest camps snarled already chaotic rush hour traffic, bringing freeways to a crawl for a kilometers and forcing millions of commuters to circle the city’s center looking for a way to work. Many parked blocks away and hiked to their glass-and-steel office buildings.

A Brown Study in Financial Education

The History of Finance, or Why I Don’t Have a Ph.D. (Financial Engineering News): Guest essayist Aaron Brown, author of The Poker Face of Wall Street (shown above), explains how he weighed his pending Ph.D. in finance — and “all the rights and privileges appurtaining thereto” — in the balance against his life experience and common sense, and in the end found the former wanting in the value-add department.

Prehistoric humans lived in small self-sufficient groups with little calculated exchange (calculation and exchange are the two defining characteristics of finance). Barter, gift, gambling and involuntary exchange are far older than writing, and leave no tangible trace for archeologists. 8,500 years ago in Turkey lumps of copper were used as money. Herodotus credited the Lydians with inventing coins 2,700 years ago, but that happened elsewhere in Asia Minor somewhat earlier. China invented leather and later paper money. The Phoenicians, Athenians and other Mediterranean trading cultures developed forms of insurance, commodity markets and securities.

We jump to early Renaissance Italy for corporations, double-entry bookkeeping and banks. The Reformation in northern Europe spawned modern securities markets, accompanied by bubbles and crashes: Tulipomania in Holland, John Law’s Mississippi Scheme in France and the South Sea Bubble in England. When William and Mary of Orange meld Dutch economic ideas to the English industrial revolution, we get stability via the gold standard and the Bank of England. In 1792, 24 brokers signed an agreement under a buttonwood tree on Wall Street creating the New York Stock Exchange. These three institutions, and similar ones elsewhere in the world, were the basis for the modern global economy.
This was the conventional story in 1980 when I entered the University of Chicago finance Ph.D. program.

Quango Tango of the Week

Utilities Unite in Energy-Conservation Push (W$J):

In the wake of record electricity use in the U.S. this month, a broad coalition of utilities, government regulators and consumer advocates is set to announce today a plan that could result in the offering of more-robust conservation programs to customers in coming months.

Flexibilizing Infodensity

More Flexibility and Reality in Explaining Anonymity: The NY Times public editor breaks his silence to announce a policy shift, although once you get through the labored explanation, it seems more like they have simply moved the furniture aside to vacuum the rug, then put it back where it was.

READERS who have peppered the public editor for months with complaints about The New York Times’s “phony” and “tortured” explanations for granting anonymity to sources should be happy. The paper has shifted toward a more flexible — and more realistic — approach to how it explains to readers why it is using an anonymous source.

An ambitious push spelled out in a June 2005 staff memo from Bill Keller, the executive editor, required reporters to explain why they had granted anonymity to each unnamed source. The guidelines also called for descriptions of how unnamed sources knew what they knew and what motivated them to talk — helpful information that the paper continues to want in stories.

Counting Cuerpos

Tercera marcha masiva en México contra el resultado electoral que dio la victoria a Calderón (El Mundo/Reuters):

Más de 100.000 mexicanos marcharon por las calles de la capital en apoyo al candidato presidencial izquierdista, Andrés Manuel López Obrador, que dice fue derrotado en los comicios del 2 de julio por Felipe Calderón con fraude, ha impugnado los resultados e insiste en un nuevo recuento voto por voto.

Reuters Latin America reports a march of “more 100,000 people” in the Zocalo in Mexico City today; the ANSA news agency and others are reporting 1,100,000. The Times spot coverage, cribbed from the Reuters wire, mentions “at least 100,000,” while the Times’ own report is blurbed:

Andrés Manuel López Obrador escalated his campaign to undo official results in the presidential election.

I’m going to write the ombudsman about that one. There have been no official results, because no results are official until certified.

Judging from the AP wire photo, above, does 100,000 seem a little on the low side — unless most of those people are Japanese tourists and Sunday strollers?

Perhaps a typographical error? Hard for me to tell, though I was in a crowd of 200,000 in Sampa a couple years ago — in the middle of a thunderstorm and flash flood, too — and the great meadow in Ibirapuera didn’t seem as vast as the Zocalo.

Infomediaries Old and New

For Immediate Release: The Knight-Batten Awards for Innovations in Journalism have announced their 7 finalists. But how “innovative” are they? And how much do they have to do with “content” production, as opposed to content packaging and distribution?

The seven honorees seemed like interesting business cases to which to apply my latest reading, Blown to Bits: How the New Economic of Information Transform Strategy.

The chapters on “disintermediation” and “reintermediation” (Ch. 5-6) are as far as I have gotten, so I’ll try to test myself on those concepts with a scaled-back HBR case study approach.

COLLEGE PARK, Md. – Seven new ways to connect people with news – from showing every Congressional vote, to warning where hurricanes will strike, to blogging the world – are the winners of this years Knight-Batten Awards for Innovations in Journalism.

Wiener the Wunderkind

Woke up this morning and finally got to the end of a long-term bedside table reading project: Dark Hero Of The Information Age: In Search of Norbert Wiener, The Father of Cybernetics.

Slothrop Unbound

Lit fans have been buzzing about the synopsis of Thomas Pynchon’s forthcoming novel, Against the Day, on Amazon.com, which was written by the reclusive author himself.

Given that I bet some friends of mine that the next novel would be set in the Roaring 1890s — squarely in line with the steampunk Industrial Revolution fin du siecle meme — I should be getting personal satisfaction out of the announcement — were it not for the fact that said friends were roaringly stewed at the time and don’t recall assenting to the proposition.

With a worldwide disaster looming just a few years ahead, it is a time of unrestrained corporate greed, false religiosity, moronic fecklessness, and evil intent in high places. No reference to the present day is intended or should be inferred.

Taxpayers Played by USAID?

Audit Finds U.S. Hid Actual Cost of Iraq Projects (NY Times):

BAGHDAD, Iraq, July 29 — The State Department agency in charge of $1.4 billion in reconstruction money in Iraq used an accounting shell game to hide ballooning cost overruns on its projects in Iraq and knowingly withheld information on schedule delays from Congress, a federal audit released late Friday has found.

The agency hid construction overruns by listing them as overhead or administrative costs, according to the audit, written by the Special Inspector General for Iraq Reconstruction, an independent office that reports to Congress and the Pentagon.

Notes on Adult Supervision

I’ve been doing some background reading lately that bears on the problem of “authority” and “expertise” in an allegedly “heterarchical” project like Wikipedia — mocked by “smart mob” cultists for having evolved a de facto bureaucracy of editorial intermediaries and by skeptics for grossly exaggerated claims about the quality of research produced by its “smart mob” of anonymous contributors.

Among the readings are Lawrence Lessig’s 1995 monograph on the “marketplace of ideas,” a note by Geoffrey Sampson called “The Myth of the Diminishing Firm,” and especially two essays by Nikolai Foss: “‘Coase v. Hayek’: Economic Organization and the Knowledge Economy,” and “New Organizational Forms: Critical Perspectives.”

I will try to upload those. Ah, here we go, I can upload the shorter articles at any rate:

1. New Organizational Forms: A Critical Perspective
2. ‘Coase v. Hayek’
3. Lessig’s The Regulation of Social Meaning (1995)

It’s a line of reading that suggests a plain-English, common-sense answer to the question of why firms in a free market cannot be replaced by emergent, market-like catallaxies. It’s simply that efficient markets require that market participants be uniformly accountable.

For all that we may ponder the question qui parle? — who is this ‘I’ that speaks? — the limited value of that exercise may be seen when it comes time to pose the question cui bono? — in whose account, as it were, does this buck stop?

Foss:

Many writers argue that economic organization is undergoing major transformation in the emerging knowledge economy; authority relations are withering; legal and ownership-based definitions of the boundaries of firms are becoming irrelevant and there are increasingly few constraints on the set of feasible combinations of coordination mechanisms.

The present paper critically deals with these claims, beginning from the basic idea that they may be analysed as turning on the implications for the Coasian firm of the Hayekian notion that the distributed knowledge is a strong constraint on the use of planned coordination.

Wall St. v. the Beehive State

Wall Street group sues Utah over short-sales rule:

WASHINGTON, July 28 (Reuters) - The Securities Industry Association (SIA), which represents Wall Street interests, said on Friday it filed a lawsuit in federal court seeking to block a Utah law aimed at curbing naked short selling, a controversial investment strategy.

Newsflow for Robots

An Australian design for a “virtual institution” in which autonomous automated agents negotiate deals on behalf of their human users.

Making computers newsreaders (London Times): Reuters invests in “machine-readable” news so that trading algorithms can react to newsflow.

What, I wonder, will it be like to write “news” for an audience of machines?

PLANS by Reuters to ensure a healthy future in the next ten years include teaching computers how to read news stories in order to help them trade more efficiently.

The company is under pressure to capitalise on the growth in “algorithmic trading”, where computers buy and sell commodities according to pre-set rules. Algorithimic [sic] trading generates huge volumes, but does not add to the numbers of terminal subscriptions — traditionally the way that Reuters earned its money.

Furious Finn: Don’t Take License

Torvalds on lawyers. Click to zoom.

Torvalds critical of new GPL draft (CNet): Linux developer No. 1 scolds the Free Software Foundation for ignoring input from enterprise users — the ones that currently employ Torvalds, e.g. — and imposing overly restrictive anti-DRM provisions in the GPL v. 3 (download the GPLv3 redline version here)

Torvalds’ concern is with the clause in the GPLv3 second draft regarding digital rights management (DRM) technology, which puts controls on how computers can run software or supply content such as movies or music.

Whereas the GPL version 2 was a basic “quid pro quo” arrangement that required anyone modifying source code to make the changes public, the draft of GPLv3 extends much further, Torvalds argued. GPL is a widely used license that governs the use of open-source software.

ICAP in Shanghai Duopoly Duel

Source: Stefan Landsberger

Icap gains route into Chinese market (London Times)

ICAP, the world’s biggest inter-dealer broker, has been given permission by the Chinese authorities to go head-to-head with Tullett Prebon in the promising financial markets in China.

Anytime, Anywhere Risk Management

Fortis to provide insurance by SMS (press release): If you’re like me, your imagination immediately leaps to a young couple, say, about to enter a really rough-looking nightclub and dialing up for a quote on temporary supplemental medical coverage … STDs and blunt-force trauma …

The UK-based arm of European insurance provider Fortis has bought a majority stake in Text2Insure – a company that specializes in providing insurance via SMS messaging.

50,000 Branches Down

Source: BBC

Indian bank workers strike over outsourcing:

Around half a million workers at state-run banks in India have staged a walk out to protest against the planned outsourcing of payment clearing operations to private companies.

According to a press reports, nearly 500,000 bank workers joined the one-day strike, which affected more than 50,000 of the country’s 65,000 bank branches, although around 200,000 staff at state-run State Bank of India (SBI), which controls around a quarter of banking assets in India, did not participate in the strike.

Caught With Khat

Cathinone. Source: Wikipedia

Criminal enterprise of the week, according to a DoJ press release: A New York court indicts the Somali immigrant members of a Boston-area khat-smuggling ring, who allegedly used hawala transfers and Western Union to remit funds to the lawless land on the Horn of Africa.

ISMACIIL GEELLE and LIBAN ABDULLE, of Boston, were charged last week in separate criminal complaints with conspiracy to distribute cathin