I'm writing this from my bed in the Manhatten apartment on the W. 72th street.
Here are the details of my first day at lehman, for my later reference.
Got up at 6:30am, Ed called at 6:25, gave me a few more minutes to stay on the bed. I happily accepted his suggestion. Nicole did not come back at night. Good, not one
to battle the bathroom with.
After all the morning drill, still lots of time left. Watching TV, eating apples, Checking email, found out that the meeting time is 15 minutes earlier than I thought! Jumped into the shoes and left in a hurry.
The orientation was on the 32nd floor. A big crowd of summer associates there already. As it later turned out, this is a class of 66 people! Most of the kids are columbia, warton, NYU. There are some MIT, Harvard, cornell, Duke, only 3 from CMU.
Welcoming address from an MD, an HR personel, an paycheck guy, a security manager, a compliance officer, and an behavioral advisor ( who specialize in sexual harrassment). Some good joke from the security guy and the sexual Hr talks.
Lunch I had salmon. Some guys had only a couple of greens on the plates, I wonder if they were too nervous or anorexic.
The training in the afternoon lasted 4 hours. The guy John did a great job in compressing profesional level material on equity and fixed income into 4 hours and engaging the crowd constantly.
I love his example on bad credit credit card. Solved my puzzle from the observation in Rite Aid, that there are American Express "credit card" type of cash card with denomination of 20 to 30 dollars on sale at the price of 23/34 dollars. Who is stupid enought to pay a premium of 10% to substitute cash with a card with the "american express" name on it? Now I know.
Monday, June 19, 2006
Friday, June 09, 2006
Name Clash
Ok, I confess that the "piled higher and deeper" idea wasn't mine. The comic book inspired me. The internet make publication possible without scrutinization, it also spur plagerism. Original idea is a scarce commodity in the crowded internet highway.
In an acidental, or vanity search of my own blog, I discovered the following blogs that ranks higher and "piled as deep"
Irish Eagle
Meltzner's blog
Ph.D Fan Blog
and many more that requires page flip..
The pros of a popular name:
You got to free ride the search traffic that belong to your more popular namesake
No lengthy explaination needed for the audience.
The cons:
If you rank past the first page of search result, god bless your clones.
Thursday, June 08, 2006
Ebay,Craigslist for Municipal bond?
The success of craigslist makes me ponder the idea of establishing a listing service for selling seasonal municipal bond.
Munis are traded over-the-counter, i.e, buyers and sellers do not directly interact, but instead, they trade through a dealer. Dealer stand-by as a party ready to take the opposite side of the trade, and their role of an intermediator solved the problem of pair-wise matching. Munis are not traded on the exchange because dealers can better engineer the trade when the buy and sell part of the trade remain anonymous. The fact that bonds are mostly bought for income not speculation make them very illiquid, maintaining an illiquid market for over millions of bond on an exchange is very inefficient. Yet, OTC transaction has its drawback. The illiquidity and the anonymity gives the dealer enormous market power. This is reflected in the large spread they earn through each trade.
Internet based listing service seems to be the middle ground between an exchange and dealer mediated OTC market. Buyers and Sellers can directly match each other without incurring large search cost. Significant saving in dealer's spread is possible when buyers and sellers directly negotiate.
In my mind, an ideal municipal bond listing service should be inexpensive ( or free like craiglist), handles paperwork such as ownership transfer easily as paypal, and able to avoid fraud and default, much like a security clearing house. Owners of the bond should be verified through the bond registration database and transfer of money should be easy.
Will it occur one day that a hybrid of Craiglist, Eebay and stock exchange changed the landscape of financial transaction? Will the internet one day really step into the terrain of wall streeters?
Munis are traded over-the-counter, i.e, buyers and sellers do not directly interact, but instead, they trade through a dealer. Dealer stand-by as a party ready to take the opposite side of the trade, and their role of an intermediator solved the problem of pair-wise matching. Munis are not traded on the exchange because dealers can better engineer the trade when the buy and sell part of the trade remain anonymous. The fact that bonds are mostly bought for income not speculation make them very illiquid, maintaining an illiquid market for over millions of bond on an exchange is very inefficient. Yet, OTC transaction has its drawback. The illiquidity and the anonymity gives the dealer enormous market power. This is reflected in the large spread they earn through each trade.
Internet based listing service seems to be the middle ground between an exchange and dealer mediated OTC market. Buyers and Sellers can directly match each other without incurring large search cost. Significant saving in dealer's spread is possible when buyers and sellers directly negotiate.
In my mind, an ideal municipal bond listing service should be inexpensive ( or free like craiglist), handles paperwork such as ownership transfer easily as paypal, and able to avoid fraud and default, much like a security clearing house. Owners of the bond should be verified through the bond registration database and transfer of money should be easy.
Will it occur one day that a hybrid of Craiglist, Eebay and stock exchange changed the landscape of financial transaction? Will the internet one day really step into the terrain of wall streeters?
Thoughs on Craigslist
Having spend 3 whole days scouring craigslist looking for a place to live in New York for 2 month, I have to say that it really really amazed me. As an rookie economist with keen interest in the buying and selling business of all kind, CL strikes me as a market place that is the best solution out there of pairwise searching-and-matching problem for real estate trades.
The goods under transaction are temporary usage of a room or house. Sellers want to transfer the right of usage for a specific time span in exchange for money. Buyers want to acquire such right of usage at a price lower than alternatives such as hotel. This type of two sided matching is historically inefficient since both the buyer and seller would have to incur large searching cost, which include advertising fee or time spent on scouring through classified column of relevant newspaper. This is even harder when buyers and sellers do not reside in the same states while news ad typically appears in local newspaper. A internet based poster overcame such barrier.
What is great about CL is its volume and liquidity. With an early lead in the classified business, CL is able to attract more and more visitors and became the dominant player in this field. As economist argued, “liquidity attracts liquidity”, knowing that most others (and potential matches) are using CL, one is more willing to put his property on CL for sell.
To give you an idea about the liquidity, from my observation of the specific category “ temporary sublease of rooms in New York City ( Manhattan area), it take only 3-5 minutes for a new post to appear, and the time frame from posting to final transaction is usually less than a day ( including private contact, showing the room and making the deal).
The mechanism of selling is “posted ask price”. This price is firm and non-negotiable most of the time. This is a result of the imbalance between supply and demand. Sellers who posted the price would rather wait a little bit for a next buyer who’s willing to buy at the ask price than striking a deal at a lower price with a negotiator buyer.
The asking price is usually a unit price ( eg, rent per month). However, the time span that buyer and seller have in mind may be different. For example, the seller will be away for 2 month, while the buyer only need a place for 1.5 month. In this case, the seller and buyer can negotiate on the length ( days/weeks of occupancy, or quantity) of the deal. As the unsold period (difference between transaction quantity and quantity available) is usually not used, and have no value, the seller has incentive to minimize it. Again, when the market is a seller market (supply smaller than demand), we usually see the buy side making the compromise in buying the whole period, which is longer than what they need.
Sellers usually get multiple inquiries immediately after posting, and buyers typically inquire about multiple posts at the same time. Seller has the right to discriminate buyers by not responding to the inquiry (the anonymity of the listing service make it easy to do). As there is a cost in showing the room and responding to email or phone calls, dealers carefully discriminate buyers by their seriousness and financial stability. One signal of seriousness is making a phone call instead of email response. The action of the buyer dialing up the number reveals more identity about him than email reply. Phone call also make is possible for the seller to observe more about the buyer through spontaneous conversation. This helps reduce the risk of default.
When phone number is not provided in the ads, then it is less obvious how seller discriminate across all email inquiries. Time precedence certainly plays a bigger role. Yet, interestingly, from my personal experience as being a buyer and seller at the same time ( I was also posting as a seller to sublet my apartment in Pittsburgh for the period when I will be in New York), it is better to ask less questions in such inquiry, especially nothing that will require effort from the buyer in replying. Taboo list:
Asking for pictures (they are not their because they do not have them easily available)
Asking to negotiate the price in the first inquiring letter
Asking vague questions such as “can you tell me a little more…” ( don’t give him a hard time)
Finally, suggestions for all desperate buyers (apartment seekers), act quickly and act decisively, use Craigslist.
The goods under transaction are temporary usage of a room or house. Sellers want to transfer the right of usage for a specific time span in exchange for money. Buyers want to acquire such right of usage at a price lower than alternatives such as hotel. This type of two sided matching is historically inefficient since both the buyer and seller would have to incur large searching cost, which include advertising fee or time spent on scouring through classified column of relevant newspaper. This is even harder when buyers and sellers do not reside in the same states while news ad typically appears in local newspaper. A internet based poster overcame such barrier.
What is great about CL is its volume and liquidity. With an early lead in the classified business, CL is able to attract more and more visitors and became the dominant player in this field. As economist argued, “liquidity attracts liquidity”, knowing that most others (and potential matches) are using CL, one is more willing to put his property on CL for sell.
To give you an idea about the liquidity, from my observation of the specific category “ temporary sublease of rooms in New York City ( Manhattan area), it take only 3-5 minutes for a new post to appear, and the time frame from posting to final transaction is usually less than a day ( including private contact, showing the room and making the deal).
The mechanism of selling is “posted ask price”. This price is firm and non-negotiable most of the time. This is a result of the imbalance between supply and demand. Sellers who posted the price would rather wait a little bit for a next buyer who’s willing to buy at the ask price than striking a deal at a lower price with a negotiator buyer.
The asking price is usually a unit price ( eg, rent per month). However, the time span that buyer and seller have in mind may be different. For example, the seller will be away for 2 month, while the buyer only need a place for 1.5 month. In this case, the seller and buyer can negotiate on the length ( days/weeks of occupancy, or quantity) of the deal. As the unsold period (difference between transaction quantity and quantity available) is usually not used, and have no value, the seller has incentive to minimize it. Again, when the market is a seller market (supply smaller than demand), we usually see the buy side making the compromise in buying the whole period, which is longer than what they need.
Sellers usually get multiple inquiries immediately after posting, and buyers typically inquire about multiple posts at the same time. Seller has the right to discriminate buyers by not responding to the inquiry (the anonymity of the listing service make it easy to do). As there is a cost in showing the room and responding to email or phone calls, dealers carefully discriminate buyers by their seriousness and financial stability. One signal of seriousness is making a phone call instead of email response. The action of the buyer dialing up the number reveals more identity about him than email reply. Phone call also make is possible for the seller to observe more about the buyer through spontaneous conversation. This helps reduce the risk of default.
When phone number is not provided in the ads, then it is less obvious how seller discriminate across all email inquiries. Time precedence certainly plays a bigger role. Yet, interestingly, from my personal experience as being a buyer and seller at the same time ( I was also posting as a seller to sublet my apartment in Pittsburgh for the period when I will be in New York), it is better to ask less questions in such inquiry, especially nothing that will require effort from the buyer in replying. Taboo list:
Asking for pictures (they are not their because they do not have them easily available)
Asking to negotiate the price in the first inquiring letter
Asking vague questions such as “can you tell me a little more…” ( don’t give him a hard time)
Finally, suggestions for all desperate buyers (apartment seekers), act quickly and act decisively, use Craigslist.
Wednesday, June 07, 2006
Bride and Groom
One of our favorite pictures taken by Ed's brother Phil. You can see the "double happiness" window decoration. We both have our "Bride " and "Groom" Chinese tags on. My mom send them to me!
Saturday, June 03, 2006
A wonderful celebration: Ed and Dan's Wedding
There is a reason that across all ethnicities, weddings are done elaborately.
If a couple can endure all the ups and downs, million crazy things that come with the preparation of a wedding celebration, they are strong enough to overcome anything else hand in hand.
On May. 27th. Berkeley Bay. Ed and I got married and celebrated it our unique way.
We sailed the bay with 60 guests on the hornblower boat, and had a spectacular time.
Everything went as planned, yet everything feels so freshingly different when it actually happened. When the boat gradually stopped and after bidding farewell to our guests, I know that the real good days are just starting for Ed and I. :-)
Picture from post wedding dinner at fisherman's wharf, with the sea lions behind us singing love songs for us.
If a couple can endure all the ups and downs, million crazy things that come with the preparation of a wedding celebration, they are strong enough to overcome anything else hand in hand.
On May. 27th. Berkeley Bay. Ed and I got married and celebrated it our unique way.
We sailed the bay with 60 guests on the hornblower boat, and had a spectacular time.
Everything went as planned, yet everything feels so freshingly different when it actually happened. When the boat gradually stopped and after bidding farewell to our guests, I know that the real good days are just starting for Ed and I. :-)
Picture from post wedding dinner at fisherman's wharf, with the sea lions behind us singing love songs for us.
First Post Wedding Trip: Honeymoon in Amish Town, PA
June. 3rd. Exactly a week after getting married in San Francisco.
Ed and I took a short trip to Smicksburgh, the biggest Amish settlement in western Pensylvania. We want to see if we can live a simple life, but obviously not. The idea of no TV, no internet sounds heavy.
It's a sunny day. Weather cleared up after the morning rain.
We took pictures of Amish carriage. I splurged on buying cute "kitchen witch" doll,
and Ed got his turtle stool. That kept us happy the whole day :-)
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