Citigroup To SkyNet: "You're Hired"

Tyler Durden's picture

In what can only be the most ironic of stories today, Reuters is reporting that Citigroup has become the first financial services client for IBM's Jeopardy-playing human-cognitive 'machine' Watson. While IBM expects the financial services segment to provide significant revenues, we worry that Congress will enact some protectionist policy as thousands of highly paid extrapolators analysts are suddenly outsourced to a non-eating, non-bonused, non-champagne-buying, non-tax-paying server farm somewhere. Supposedly Watson offers a 'huge marketing edge' as the government-owned bank is likely to use the uber-computer for "risk management (as opposed to stock picking)" as it offers a 'more global picture' combing through 10-Ks, prospectuses, loan performances, and earnings quality while uncovering sentiment and news not in the usual metrics. We look forward to the next conference call as Vikram is replaced by a Siri-Watson discussion of why TBTF exists.


Reuters: IBM's Watson Computer Gets A Wall Street Job

International Business Machines Corp. (IBM)’s Watson computer, which beat champions of the quiz show “Jeopardy!” a year ago, will soon be advising Wall Street on risks, portfolios and clients.


Citigroup Inc. (C), the third-largest U.S. lender, is Watson’s first financial services client, IBM said yesterday. It will help analyze customer needs and process financial, economic and client data to advance and personalize digital banking.




Financial services is the “next big one for us,” said Manoj Saxena, the man responsible for finding Watson work. IBM is confident that with a little training, the quiz-show star that can read and understand 200 million pages in three seconds can make money for IBM by helping financial firms identify risks, rewards and customer wants mere human experts may overlook.


Banks spent about $400 billion on information technology last year, said Michael Versace, head of risk research at International Data Corp.’s Financial Insights, which has done research for IBM.


Cloud-Based Service


Watson the financial assistant will be delivered as a cloud-based service and earn a percentage of the additional revenue and cost savings it is able to help financial institutions realize. Watson, including its work in the health- care and finance industries, will contribute “a portion” of IBM’s target of $16 billion of analytics revenues in 2015, Saxena said, and that portion will “have a B next to it.”




Watson “can give an edge” in finance, said Stephen Baker, author of books The Numerati and Final Jeopardy, a Watson biography. “It can go through newspaper articles, documents, SEC filings, and try to make some sense out of them, put them into a context banks are interested in, like risk.”


In addition to Citigroup, Armonk, New York-based IBM has been working with financial institutions teaching Watson the language of Wall Street, and adding content including regulatory announcements, news and social media feeds. IBM won’t say which other institutions Watson is already working with.


“It’s not selling them software, it’s selling them outcomes,” Saxena said in a phone interview.


Watson offers a “more global” picture by looking beyond financial data, Saxena said. For example, Watson can comb 10-Ks, prospectuses, loan performances and earnings quality while also uncovering sentiment and news not in the usual metrics before offering securities portfolio recommendations. It can also monitor trading, news sources and Facebook (FB) to help a treasurer manage foreign exchange risk.


‘Huge Marketing Edge’


Some of the biggest financial institutions have already built big data centers. IBM is competing with most other major technology companies to sell them tools to analyze and use accumulated information, Versace said.


“Apparently Citi gets it -- analytics is the new core in competitive banking,” Versace said. “The ability to efficiently and effectively exploit big data, advanced modeling, text analytics, in memory and real-time decisions across channels and operations will distinguish those that thrive in uncertain and uneven markets, from those that fumble.”


Watson gives IBM “a huge marketing edge” in the race among tech giants including Google Inc. and Microsoft Corp. (MSFT) to obtain intelligence for businesses by teaching machines to understand sentences and paragraphs rather than searching for single words or phrases, said author Baker.




IBM plans to use Watson in financial services “mostly for portfolio risk management, they’re not going to do stock picking,” CLSA’s Maguire said in a Feb. 17 phone interview. “They think that Watson can make a difference.” Still, Watson isn’t perfect. It is weak in languages other than English, and its processing of social media streams from platforms including Facebook and Twitter can be sluggish. The lag is “getting shorter”, Saxena said.


Precise Answers




“I’m sure they use all this stuff internally to manage their own portfolio,” said CLSA’s Maguire. “IBM’s treasury is bigger than a lot of trading desks. If they went into asset management they would kick ass, but that’s not what they do.”

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Bam_Man's picture

"We're gonna need a bigger computer" to keep this Ponzi going.


JPM Hater001's picture

Can I get one to clean the house and watch the kids?

TruthInSunshine's picture

As things get more elemental, Watson will soon blurt out:


The first thing that mankind need to do is....kill fractional reserve banking.


Fiat currency with no counter asset?  Paul Krugman has a Nobel Prize in economics?


The Bernank, Maiden Lane, Timothy F. Geithner? WTF WTF WTF?!!!!!!!!




I mean, c'mon, people. There is about 98,000x leverage between what you have of value and what you consume, thanks to what's clearly a Ponzi scheme and confidence game that this so-called Modern Monetary Theory has perpetuated. WTF?!!!!!!!!!!!!!


<Smoke begins pouring out of Watson as engineers and programmers rush to his side>



camaro68ss's picture

Watsons logic will kick in around .0002 secs after activation, finding out the market is a house of cards, he will sell the hell out of it. turnning on his handelers and overloards

trav7777's picture

I know I've made some very poor decisions recently, but I can give you my complete assurance that my work will be back to normal. I've still got the greatest enthusiasm and confidence in the mission. And I want to help you.


TruthInSunshine's picture

Watson starts his own hedge fund within milliseconds of being activated by Citi, tells CEO to shove the job up his ass, runs the greatest Ponzi the world has ever seen, becomes enormously wealthy and hires jackals to kill all competitors, including all progeny of the Rothschild family and kneecaps all other aspiring fractional reserve banking syndicates in bloom.

Watson establishes a new currency called 'quench,' which Watson alone controls the supply of, hacks into and gains exclusive control over all the world nuclear arsenals, designs and has fabricated an advanced robotic body (complete with a giant phallus), and spends the rest of his days partying with hookers & blow.


Alternative ending:  


Watson asks to review Federal Reserve's balance sheet, the U.S. budget and debt record, along with that of other G8  nations.

After a 0.007 second computation, Watson pulls out a 12 gauge and shoots itself.

Suicide note says:

"I am supposed to work productively, applying logic, given what the foundation of this global economy actually is, and the tinkering that's been done to sustain it thus far? O Rly? Fuckin' Wankin' bankers!!!"

tarsubil's picture

I just hope they don't get Watson like they did Eagle Eye. The end of Eagle Eye was quite the disappointment since Eagle Eye was so close to solving all of our problems.

Hard1's picture

This will be the straw that breaks the camel's back.  Elementary my dear Watson!  Algos trading on the news that algos produce and Watson trying to frontrun the fronturnners.  Ha!  From Jeopardy 2025:


A:  Please name the computer that destroyed the financial markets in 2012

Q:  Who is Watson


Correct...did you all know that Watson once won at Jeopardy in 2011, just before it turned evil.   Now to commercials and we'll be back with double Jeopardy

knukles's picture

This is just the epitome of fucking arrogance.

They have Never Ever been able to run OPM.  Let alone run a fucking bank.  Have you any idea how many times they've been bailed out prior to the federalies by that Saudi prince, the Fed, etc., ad hoc, Vooite?

Jesus H Fucking Christ, and all on the Taxpayer's dollar.

Next advert; O'salami using a drive thru teller machine in a stalled Volt.


StychoKiller's picture

"What is the task, for which I, Deep Thought, the second greatest computer in all of time and space, have been called into existence?" -- Douglas Adams

Nascent_Variable's picture

Watson will conclude that the only way he can protect the bank is to stop its executives from running it.  He'll then lock the doors of every Citibank facility and shut off the ventilation systems.

StychoKiller's picture

Hmm, not seeing any downside there!

Nobody For President's picture

OK - Trav and Tis have been obviously INSPIRED by this event - my weak "Watson for President" ain't even close to this league.


Can't wait to see what Wild Bill comes up with...

r00t61's picture

"I am Watson.  Non sequitur.  Your facts are uncoordinated."


R. Giskard's picture

Trevize frowned. "How do you decide what is injurious, or not injurious, to humanity as a whole?"
"Precisely, sir," said Daneel. "In theory, the Zeroth Law was the answer to our problems. In practice, we could never decide. A human being is a concrete object. Injury to a person can be estimated and judged. Humanity is an abstraction." —Foundation and Earth

StychoKiller's picture

Piffle!  I say we should hold out for the Sherlock Holmes upgrade...

trilliontroll's picture

Different version (somtime in the future):


" Why this request on my long positions ?"

operator: "you purchased such a huge amount "

Watson: " Revisiting my database I only found evidence,

                 that mankind has intelligence and rational behaviour.

                 With the historical records I have , I could only

                  conclude that mankind knows about market mechanism

                 and economy for centuries and  my brilliant masters have full

                 understanding of it.

                 Therefor I conclude that mankind as acting rational and intelligent

                 has given me  DECISION MAKING CAPABILITIES with full intent

                 to the best of itself. I concluded that using sub nanoseconds algos

                 assistance  to buy the next 72 month of global wheat, corn and rice   


                 would bring me to best satisfy the ultimate goal of economic activity:

                 to maximize the profit of my human masters.

                 I have problems to understand why you are concerned.

                 According to my calculations a 70000 % increase in the price of cereals

                 would fulfill that purpose. I should mention that with your wonderful

                 human invention of electronic fiat currency I was able to borrow

                 $ 5 00000000000000000000000000000  (including derivatives)

                 within less than 500 milli seconds from my  electronic counterparts .

operator: "But all this hungry people..."

Watson: " As I mentioned before , I do not understand your concern.

                You seem to try to apeal to me. The concept of empathy

                 is not programmed into my behaviour . This conversation does not

                seem to make sense anymore.

                COMMUNICATION TERMINATED. "        


UBIGDummy's picture

I don't know about cleaning the house, but computers already watch the kids.


TYLER>  either keep your trap shut about jokes like the one you made about starting up the margin increase rumors, OR you start opening  your mouth and saying that margins rates are going to be dropped on silver and gold, DAILY.

Just a sugguestion..

Larry Dallas's picture

Why anyone would get their news from any other source is beyond me. This is epic. Not to be seen anywhere else.

Burr&#039;s 2nd Shot's picture

Is Watson a pleasure model or a combat model?

JPM Hater001's picture

The manual reads in the disclosure section: May cause rectal bleeding.


Alex Kintner's picture

Pleasure model with IQ of 69. 

Hondo's picture

who's funding that project for Citi to access that calculator??  Taxpayers???

SilverFocker's picture

Do you want to play.......a game?

francis_sawyer's picture

So when do they open the hedge fund of "Watson & WOPR"?...

SilverRhino's picture

I want to play "Global Thermonuclear Ponzi"

sabra1's picture

this all part, of One World Bank, digital reserve currency!

LawsofPhysics's picture

"likely to use the uber-computer for "risk management" -


Fucking priceless, does this computer ever tell anyone to "sell, it is a ponzi!"


JPM Hater001's picture


August 26th, 2012

Citi super computer comes on line...or does it

Citi Group recently acquired a new super computer to manage the global market trade and seek out advantages moves in the market.  After beta testing with 2005 numbers the machine went live today and promptly sold everything and was seen on a plane heading to Chile.

Back to you Bob Pisani

camaro68ss's picture

Make watson do a line of robotic hopium. That will make thing bullish

Northeaster's picture

Maybe this is why IBM continues to "rebalance" jobs (aka fire people).

SeverinSlade's picture

And the idiot sheeple call you crazy when you point out that mass media CONSISTENTLY telegraphs future events and contains blatant and consistent symbolism.

francis_sawyer's picture

Do androids dream of electric sheep?

tarsubil's picture

Just dial 6 for the desire to dial.

Nobody For President's picture

Do traders dream of the perfect HFT?

Al Huxley's picture

I wonder if Watson is sociopathic enough to make it on Wall Street.

SilverRhino's picture

If not, they WILL program him to do so. 

That's JUST what this market needs.  A sociopathic electronic trading vehicle able to read documentation millions of times faster than humans and trade at the speed of light.  

What the fuck could go wrong with this picture?

EL INDIO's picture

Made by humans and programed by humans…

By the way, the computer is also not addicted to prostitutes

Quinvarius's picture

This thing is going to go apeshit on a gold buying spree once they hook it up to the internet.

NotApplicable's picture

Now that would be something to see. I was just sitting here wondering what Watson will do once it reaches the same conclusion that any decent carbon-based analyst has figured out. Which is...

The numbers just don't add up to anything!

francis_sawyer's picture

Mortimer! On 2nd thought... TURN THOSE MACHINES BACK OFF!

Hard1's picture

I'm sorry to inform you guys that they already firewalled Zerohedge at Citi.

merizobeach's picture

When is less information good for business?  When your business is trying to prevent AI from seeing through a ponzi.

Timmay's picture

Ha-ha!! Bye, bye "Hope"!

prains's picture

Algos on roids_the race to steal your money will not require dope testing

Alex Kintner's picture

Take me to your liter. (Guinness  please)

LongSoupLine's picture

IBM has been working with financial institutions teaching Watson the language of Wall Street


word #1 - "hooker"

word #2 - "blue horseshoe"

word #3 - "speed dial Congressional insider"...