The Whiteboard - Most Recent
Harvard's Kennedy School denies 'privilege' class story
The Harvard Kennedy School responded to reports that it has created an orientation class on "power and privilege" with a flat denial.
Doug Gavel, the school's Associate Director for Media Relations, told Marketplace's Mitchell Hartman that there is "false information in the media" about a class that administrators at the school were reported to have committed to scheduling for first-year students. Several media outlets picked up the story, first reported in New York Magazine's "The Cut" that, "In response to growing demand from student activists, administrators committed Friday to adding a class in power and privilege to its orientation program for incoming first-year students."
The story comes in the wake of a controversial essay on privilege written by a student at Princeton earlier this month.
Here's the text of Gavel's email to Mitchell:
There appears to be false information in the media being conveyed by reporters who have not contacted Harvard Kennedy School (HKS) officials to verify the accuracy of the information. Contrary to one article that has been picked up by others, the school is not planning to offer classes, coursework, or sessions devoted specifically to "power and privilege." The school currently offers a number of opportunities for students to discuss and learn about issues of diversity. Learning to have constructive conversations in the context of differences in race, gender, cultural background, political viewpoints and many other perspectives is important in any graduate school, particularly one dedicated to preparing its students to be effective leaders and policymakers. HKS examines opportunities offered to students to engage in these discussions, regularly assessing their effectiveness and value. We look forward to continuing to work with our faculty and students to provide the most valuable learning opportunities in this area.
Dark pools come out of the shadows
Dark pools are once again in the headlines, thanks to Michael Lewis' new book "Flash Boys," and there's also reports this week that Goldman Sachs may be considering shutting down its dark pool, which has the admittedly rather thrilling name Sigma X. Dark pools are mysterious, and names like Sigma X only make them more so. That's pretty cool when you're trying to persuade a client to trade in your dark pool: Dude, It's totally secret! No one will know you're in there! No one will ever know what you buy or sell. Total anonymity! But it's not so cool when the press and the public and regulators and lawmakers and basically everyone else is obsessed with greed in the financial markets, and start making a fetish out of transparency.
To the outsider, dark pools look shadowy and suspect, even sleazy. The question goes: Why do bankers need to go to these places to trade? And why do they need to be dark? Suspicion ensues: Are they using these places so that they can just rip us off, quickly and quietly, so that we never know about it and they can run off, laughing all the way to the bank (as it were)?
The fact is that a dark pool isn't an offshoot of the black arts. It's simply a privately-owned exchange, in which buyers and sellers can trade confidentially and in private. And they’re not new: they've been around for years. Creatures from the Black Lagoon, they ain’t. Here’s a short video explainer:
Stop being such a front runner! An explainer
It's a phrase that's come up again and again this week: in "Flash Boys," Michael Lewis' new book about high-frequency trading; in today's spirited debate on CNBC between BATS Global Markets President William O'Brien and IEX's Brad Katsuyama; and in almost every high-speed trading article in between.
Front running. But what the heck does it mean?
On Tuesday, I described it as a dog running off with your sausages, but that's not entirely accurate. It's more like the dog finding out how much you are prepared to pay for your sausages, buying up all the sausages itself and then selling them to you for a higher price.
Front running is when a high-frequency trading firm sees you bid a certain price for a stock in one exchange, and then uses its superspeed to get in front of you (hence, front running) in all the other exchanges, buying the stock that you want and then selling it to you for more than you originally bid.
Traders hate being front-run. Not just because it means they are paying more than they thought they would have to pay (heck, the client can eat the loss), but because they like to think of themselves as Masters of the Universe, people who dominate, who control everything around them. But if you're being front run, then you're in control of precisely nothing. You are, in fact, being led by the nose. Like a Master of the Universe's pack mule.
Yes, if you get front run, you're a donkey.
No wonder there's so much hate for HFT firms. Michael Lewis points out that the losers in the hedge fund game are often hedge funds, who trade on behalf of pension funds. Hedge funds don't like to be victims. And they sure as heck hate being seen as donkeys.