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Wall Street To Form New Tech Company To "Clean Up" Dirty Data

Tyler Durden's picture




 

Back in June, when commenting on a lawsuit brought by a group of pension and retirement funds which amusingly accused Wall Street and its progeny Markit of conspiring to monopolize the CDS market to the detriment of potential new entrants that we’re sure had only the best intentions (like Citadel), we said the following: 

While the entire world is now, with the benefit of hindsight, able to see how a setup that allowed rate traders to communicate with benchmark submitters might have been a recipe for disaster, what should be even more obvious is that allowing a firm controlled by Wall Street’s largest banks to effectively monopolize the market for the derivatives that not only played a rather large role in the financial crisis but also serve as the go-to instrument for hedging tail risk is likely also a bad idea and could very well lead to manipulation and all sorts of other nefarious things like, for instance, attempts to create and preserve a lucrative monopoly by adopting anti-competitive practices. 

We were of course referring to Markit, the Wall Street-backed provider for CDS data, and as WSJ reports, it now appears that Wall Street will conspire to form another reference data entity in which everyone will have a stake. The project is called "SPReD" and it will be implemented by SmartStream Technologies ltd. Here are the (convoluted) details:

The initiative is currently dubbed "SPReD", which stands for Securities Product Reference Data, and is likely to be launched as a new entity in the next six to 12 months, the people said. Each founding bank is investing “seven figures” for the entity, the people said.

 

The company will work specifically with reference data on financial instruments, including identifiers like names, codes and symbols that each institution already buys. It will start with listed derivatives and equity data, with fixed income-related data added later.

 

The project would consolidate efforts to clean and store the vast amount of data, centralizing a function that many banks have previously done individually, with some housing data in a variety of units within their organization.

 

Banks typically use market data from vendors and glean it from public sources, run it through their systems and "scrub" the data to get so-called "golden copies" that are consistent and ready for use across the business, one of these people said. That consistent data can help save on transaction costs across the organization.

 

The new entity will create tailored data feeds for each client using existing sources of data that firms receive from a variety of vendors. Each bank or client will continue to negotiate those data vendor relationships themselves.

 

Earlier this year J.P. Morgan created a central system within the bank that pulled streams of reference data from all of its providers into one hub, a person familiar with the process said. The new entity will take over scrubbing reference data for the bank, ultimately feeding it back into J.P. Morgan’s system, as part of its cost savings initiative.

 

Using consistent data allows the banks to form accurate pricing for trades and can be essential for risk and compliance reviews that could arise.

While it's not entirely clear from the above exactly what all will be included in the data sets that comprise SPReD - and we'll probably never know until someone gets caught manipulating something - this seems to be an attempt to standardize data across markets in a way that allows the banks to control the tracking.

What that will mean going forward is anyone's guess but as is clear from the last line excerpted above, standardizing this data will supposedly help banks "form accurate pricing for trades", and we all know what can happen when Wall Street gets together to "standardize" a reference point on which trades are based. 

 

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Thu, 08/20/2015 - 17:04 | 6448921 Kaiser Sousa
Kaiser Sousa's picture

i swear to God...

if ever i got close to one of these mother fucking sociopaths i would try to KILL THEM DEAD...

DEATH TO THE FUCKING MONEYCHANGERS.......

Thu, 08/20/2015 - 17:09 | 6448949 FL_Conservative
FL_Conservative's picture

More like grab your ankles and SPReD wide.

Thu, 08/20/2015 - 17:14 | 6448972 Bloppy
Bloppy's picture

Yay! Netflix $10,000!

 

 

NBC mislabels Carter as nine-year-old

http://tinyurl.com/p8ynjqb

 

 

 

Thu, 08/20/2015 - 17:18 | 6448991 U4 eee aaa
U4 eee aaa's picture

he will be after they get done with his brain

Thu, 08/20/2015 - 17:27 | 6449015 Santini Air
Santini Air's picture

What type of tech talent are tehy going to attract?  Knowing you will literally be thrown out the window when the time comes?

Fri, 08/21/2015 - 01:14 | 6450388 Cadavre
Cadavre's picture

Goldman Sachs, Morgan Stanley, and JP Morgan aren't satisfied with disparate, disorganized "reference data" which is why they're teaming up on an initiative called "SPReD".

I feel warm and fuzzy all over again!

What type of tech talent are tehy going to attract?

JP Morgan announced abount 10 years ago that they were never going to hire another American software engineer.

There were seminars for businesses that showed how the subsidies worked for non-citizen or "offshore" system development. H1B is the preferred choice. Value has nothing to do with the software engineering. Ya be dense znuff to submit a CV to an online resume harvester, and you be American (meaning a hire would not have a subsidy attached), they use American CV's as exhibits that they just can't find qualified American engineers, and need to hire a subsidy, err H1B.

Some of them foreigner's are pretty good - but most code in a box. Never met one that had an imagination like the Mericons I consider worthy. Besides, a hire shouldn't be based on what someone learned in school, or has had previous experience. Hires should be based on what the prospect has the potential to do. Americans= engineers are pretty fucking good for the most part - they just ain't got no subsidy value.

Besides, the cultural linquististic difference sthick is a great fall back, as it always seems to do these daze, when the farkled code causes shit to hit de fan. 

Most of my gigs are brokered on the internet. I make a bid, add a disclaimer and present a rough implementation plan with fixed deliverables and costs. I usually don't get the first round pick, so most of my work is kick backs when the Fillipino or Indian system shops finally admit couldn't figure out what to do. It turns out the only thing those offshore shops are good at is a multi colored over the head graphical presentaion template tool that don't say shit - it just looks real geeky and nerdy. 

When I work for US software providers, I'll ask, "Why aren't you doing this project in houe, ya got a cubicle garden big enough fill a rural Mexican Plaza de Toros.

They repond, "Well our guys don't have eneough time". Meaning, they can't solve the problem. Why? Cause the in house W2's are too busy figuring out where to go for lunch, or coding delay loops inside a progress bar so the customer can see it scroll out to completion in all it's glory. IOW, they slowing down a process that is already too slow, as well as unimaginative (those were the guys hanging round the trash bin after computer lab collecting other student's' source code).

Veritable  warehouses of uselessness trapped somewhere between nothingness and eternity.

Just outta school did  gig for the USAF. That is when I first witnessed how the bidding process is rigged. An inside guy will have a shop whom he is either a silent partner, or familiar with with (at least) their kickback schedule, write the specs. The specs are custom tailored so tight that it appears only the inside guy's provider's, the ones who wrote the specs and requirements, can reasonably make delivery. After while, and noticing no one really did shit, except talk about where to go for lunch, I quit and worked at a retail `puter store (remember those guys?).

Just before I hung out a shingle, asked a guy I respect a bunch, "What is a consultant?"

He answered, ""A consultant is anybody that has the word "consultant" under their name on a business card". Such purity of truth is hard to find these days.

Fri, 08/21/2015 - 04:05 | 6450605 LaForce
LaForce's picture

I guess you have just watched some software version of "Rambo"... The imaginative american coder shouts: "yeah thats how we do it cuz we are murikans, we are the best sotware inginuriers... ", presses enter with a burger, sips cola light.

 

Fri, 08/21/2015 - 08:14 | 6450844 Cadavre
Cadavre's picture

The Rambo Coder bit is spot on. Bet a bunch of rambos quant nerds will be getting some kind of Rambo head bobber doll to proudly display under their console array.

At some levels - some professions - a guy or gal doing full cycle solutions as an independent developer - and depending on one's goals, to get a gold watch and go fish or to never retire kowing your brand can compete with the best and feel like ya sitting on top o-de world.- ya gotta have dat old feed or be dead mentality - never overly indulge in too much self tugging self worship with anyhting ya do - rabbidly grab at higher degrees of difficulty - daring ya-self to prove to ya-self that ya ain't as stupid as ya think ya are. Ya gotta  deliver to a fixed cost and delivery schedule - look a client in the eye and understand there are two paths, perfect or seppuku.

Sometimes ya get to pretend ya be a scientist evun!

 If your main squeeze be coming out of de bedroom at 3-clock am with a teasing grin - wat can ya do but save and shutdown - it's unfair - when it said and dun and de cigarette smoked - who give a shit!?!

Gotta read a ton  and so do a lot of 'sport coding' (stuff ya do on your own time, like for example, animating circle shape so it looks like a coin spinning on edge - and THEN - ON TOP OF THAT - add an 'electron' that orbits along the outside edge of the digitally rendered spinning coin - shit nobody be paying for - brings back memories of first porn code - imagine a paren followed by a bunch of equal signs pumping back and forth on a 80x24 display -- naan - that was the second - the first was when the `puter store I left a high pay cubicle future talking bout where lunch be, as mr. software support guy gotta de first shipment of post lisa mac's - and as I read the docs, fortune landed urs true on a section that described how to create custom mouse pointer - so, as expected of anyone at dat moment, urs true modify de standard 'hand' pointer to print with an erect second finger American salute.

It not a job, bob  - it be all Rambo Coder like you say. Consider: Let's say ya jaded to the hilt - totally de-synthesized - and the only rush you can feel is an honestly assayed 'on top of the world' fix. Client happy. You get paid. BTW: Dere is a period when the project is delivered where ya feel empty num - without purpose - especially for de really challenging projects - hardcore nose to wheel then the post fuck without de usual relief of de ole seminal pressure bit money shot 

Being a badass Rambo coder means hand coding the whole fucking ball of twine ya-self. For context, most IDEs have a tool bar loaded with drag and drop objects.  The diff tween hand codeed and drag and drop is execution speed type sacrificed at the ease of use alter by so called "not Rambo Coder". Hand coded projects don't expand the code cause ya don't have to code the default settings. That means less clock and lot's o-speed, thus, enhancing de project's sex appeal. It be all sorts of sex appeal. Fast, initiative - like entering puberty and be knowing the ins and outs with out a bird and bee routine from de peeps. High end American independents hand code. Foreiegn high turnover foreign system shop coders (meaning not real developors, dey juz coders, ya know de kine of  guys falling from the bastille walls dat Rambo takeout with explosive arrows or sumpin) working under a lowest link in the chain type coding standard. Doze guys are required to use drag n drop visual classes and only the vial ides - meaning the layered or procedural functions are limited to class methos. BTW layered code is bunches faster than class imbed code.

FYI.The diff tween a true and false . or a 1 or 0 (de binary basis for all that is digital) is .05 millivolts. If the electron ain't packing the extra .005 mv boost, the electron will not be able to jump across a "ditch" etched into the surface of a chip. The electron is then shunted through an error pointed and shit back into the ether.. And, of course everybody knows what a nano second is: It's the anmout of time it takes a photon to travel 11 inches, or, de long side of standard copier paper.

From bean counting clerical interfaces (horizontal systems)  to gui context and graphical representations (expert systems) , it gotta be simple. People don't want a be an expert user - dey jus wanna get dere shit done on de `puter and do real people stuff.

Users working the markets like de old school interface - non distraction monochrome-ish interfaces - but more than 80x24, dynamic real time surface charts, drop down process items, on demand etc.

But de software do a lot of shit. And it do it fast without rattling around = lik a street legal McFaren 3 seater. Hug de curve at 250 kph using jus one finger and all de while de sunshine be shinning. 

Let's say a project needs to forward price the implied volatility for a range of strikes at a any delta the current market ( we could extend rendering a a theta-ish through to expiry forward price).Ya need an implied volatility to price an ask or bid that will settle immediately when the options opened. Not simple European pricing, but tedious closed form American "exercise at anytime" pricing,

Where ya gonna find de kind of hunger to get dat kind of shit from. American engineers. They're really are a lot of good ba as engineers in de isa, but dey don't come with a basket of subsidies. Know of one foreign shop, and suspect most offshore system shops work a project the same way. What they do is limit requirement assays to only discussions with the suits. The end user's don't have any say it a projects outcome and done know anything about it until it lands on their desk. Foreign shops do little aplphs testing - so it's up to the client and ior client's staff to do both the alpha and beta assays. The beauty of this is that if something and comping right or ain't there,the foreign shop can blame the suits for given a less than complete set of requirements,  and bill for the repairs. Turn over is high in foreign system shops and when requirements are taken by some just out of school guy who has no framework to assay mission critical requirements, which in some ways is part of the c=scam, leass than complete requirements mean billable time.

Seen us users pay more than a million for a project that took almost two years by a foreign cube hive that could have been delivered by a more adaptable American engineer, not restricted to an offshore cube farm's standard's box, in 6 months for less than 200K.

You're 'jesus titty fucking christ', right about the Rambo state o mind thing.

Thu, 08/20/2015 - 17:35 | 6449034 Santini Air
Santini Air's picture

RE:  http://tinyurl.com/p8ynjqb

 

ROTFL how can you afford to hire crisis actors when you can't even pay your proof readers?

Thu, 08/20/2015 - 17:16 | 6448977 813kml
813kml's picture

Further pursuit of an answer to the age-old question of how to most efficiently assrape a muppet.

Thu, 08/20/2015 - 17:17 | 6448987 Skateboarder
Skateboarder's picture

The SW "engineers" who code up this kind of shit need have no conscience.

Thu, 08/20/2015 - 17:49 | 6449084 Santini Air
Santini Air's picture

When we were studying MSCE/MCSA on a popular IT forum, we asked a hypothetical question about what you would do if you were asked to illegally wipe data, obstruct justice, etc?  Should have seen the responses.. pretty much kicked off and banned from that site!  An industry with no morals at all, just say "YES MASSA!" to whoever signs the cheques....

Thu, 08/20/2015 - 18:23 | 6449228 Son of Captain Nemo
Son of Captain Nemo's picture

if ever i got close to one of these mother fucking sociopaths i would try to KILL THEM DEAD...

AMEN to what you just said Kaiser!...

And while you're at it some "action" on the NSA and Langley... Maybe you can figure out a way to move their HQ(s) closer to Tianjin or Fukushima!

Thu, 08/20/2015 - 17:04 | 6448926 divingengineer
divingengineer's picture

Starting to smell a lot like RICO around there!

Thu, 08/20/2015 - 17:05 | 6448929 buzzsaw99
buzzsaw99's picture

is there an ipo for that? i would love to get in on the ground floor. /s

Thu, 08/20/2015 - 17:12 | 6448943 fxpmtrader
fxpmtrader's picture

Only idiots are still in this "market".

Now: Only "Super-Super idiots" will still be in these "markets".

May they all - super-money-changers and super-idiots - burn in hell.

 

Maybe then "life as we have known it" again has a chance.

At least until both are back again.

Which is ineviable due to the humans super idiotic genes.

As is there something more sexier/pestier than greed?

Thu, 08/20/2015 - 17:11 | 6448955 IdiotsOutWalkin...
IdiotsOutWalkingAbout's picture

Bring back the rule of law. End price fixing Monopolies. No wait.

Legalize torture for bankers, politicians and their families. No,

Must find Moar Worser penalty than torture or death.

Not enough circles of hell to cover this.

Thu, 08/20/2015 - 17:13 | 6448963 blindman
blindman's picture

the world needs a digital version of
the paper shredder desperately.
mama said "shut your filthy mouth".

Thu, 08/20/2015 - 17:14 | 6448970 Clowns on Acid
Clowns on Acid's picture

Will the Banks be using QE money for this? Yes you say ? Great...what could possibly go worng?

Thu, 08/20/2015 - 20:59 | 6449798 RaceToTheBottom
RaceToTheBottom's picture

Don't worry, banksters don't incur the risk.  You and I do.  Actually others do more than me, cause I have no kids or grandkids.

Thu, 08/20/2015 - 17:17 | 6448986 U4 eee aaa
U4 eee aaa's picture

It seems the wolves are intent on building us a new henhouse

How kind

Thu, 08/20/2015 - 17:47 | 6449088 cheech_wizard
cheech_wizard's picture

Is that SPReD as in preparation for BOHICA?

Thu, 08/20/2015 - 18:05 | 6449168 kchrisc
kchrisc's picture

Will they also clean under my guillotine?

Zion is a scheme, not an ethnicity..

Thu, 08/20/2015 - 18:05 | 6449173 MedicalQuack
MedicalQuack's picture

The data selling business is worth $180 billion a year and this is of course one more way to clean up and sell your personal data.  Master Card is kind of the king of this as they have 3 data centers, as does CVS the drug store to scrape ands sell your data.  Part of this process is to clean the data after is is scraped, so...put two and two together here, Wall Street wants a scraping machine so the data sells easier and faster wtih fewer problems for their data base people to work with overall.  It goes with the territory.

This is what we need to do and support my little tiny campaing if you want but we need a law to index and license all data sellers as who in the hell are they?  They come in all shapes and sizes.

http://www.youcaring.com/other/help-preserve-our-privacy-/258776

You can read more here about our Dupes of Hazard community...this is awful and I hate it and try to spread the word to all that you're gettnig code hosed in the background everywhere you go. 

http://ducknetweb.blogspot.com/2015/05/privacy-duping-of-america-intangi...

I started talking about this over 3 years ago with telling all the data selling business for profit was spreading like a virus.  They don't really care either as good data gets the same price as crappy data.  Watch for repackaging too as one day we'll probably find all our data for sale, both legal and stolen for sale on sites like the data exchange. 

http://ducknetweb.blogspot.com/2015/02/the-data-exchange-buy-and-sell-da...

Thu, 08/20/2015 - 18:09 | 6449183 Grandad Grumps
Grandad Grumps's picture

So, like what ever happened to the market? If there is only one set of data and opinions then there cannot be a market.

... not that there has been a market in recent years. Now they are not even trying to hide it.

Thu, 08/20/2015 - 21:23 | 6449868 Joebloinvestor
Joebloinvestor's picture

It may not be broken, but you can bet these guys are gonna "fix" it.

Fri, 08/21/2015 - 13:00 | 6452081 silver_stacker
silver_stacker's picture

The ol’ PPT sure as hell had their work cut out for them today. The market was up and down like a damn see-saw...but market forces prevailed. Reminds me of that old Moody Blues tune…

The Moody Blues - Ride My See-Saw

http://www.eyeneer.com/video/rock/the-moody-blues/ride-my-see-saw-0

 

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