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Month: January 2017

An experiment

An experiment

I said earlier that I have a theory that you can replace the term “distributed ledgers” with “shared Excel sheets” in about 90 percent of talk about blockchain and finance. I wasn’t joking.

“A shared Excel spreadsheet is a record of transactions or other data which exists across multiple distinct entities in a network. The spreadsheet can be wholly replicated across participants, or segments can be partially replicated across a subset of participants. In either case, the integrity of the data is ensured in order to allow each entity to rely on its veracity and to know that data they are entitled to view is consistent with that viewed by others entitled to view the same data. This makes the shared Excel spreadsheet a common, authoritative prime record — a single source of truth — to which multiple entities can refer and with which they can securely interact.”

That’s from a certain blockchain paper. You could tweak the language to make it a little more accurate – “password-protected Excel spreadsheets whose earlier entries cannot be edited” or some such, but the point stands. The reason it stands is because it highlights a major issue with blockchain technologies when it comes to finance — what problem are you trying to solve here?

Centralized databases have existed for decades. Blockchain might be modestly more efficient, but the notion that it’s completely immutable and can never be abused seems open to questioning.

Here’s Christopher Natoli and Vincent Gramoli as written up by The Register:

“The problem: if everyone in a consortium trusts each other, they don’t need blockchains to protect themselves; if they don’t, current blockchain protocols have a flaw that allows a bad actor to game the system.”



Midnight Madness, revisited

Midnight Madness, revisited

Elisha Wiesel, the son of Holocaust survivor and author Elie Wiesel, is replacing Marty Chavez as Chief Information Officer at Goldman Sachs.

It’s an interesting bit of Goldman kremlinology given his history at J Aron. It’s also an excuse to revisit some of my old work on Midnight Madness – the epic all-night Wall Street scavenger hunt/first-person puzzle/charity fundraiser that Wiesel is credited with inventing and which I wrote about for the Financial Times.

So here’s a fun throwback to 2013, when Midnight Madness was first expanded to include non-Goldman firms:

Wall St lines up for ‘Midnight Madness’

Some time next week Dan Keegan, Citigroup’s head of US equities, will be asked to sing a ballad over the speakers on the bank’s New York trading floors.

The unusual request is part of Citi’s efforts to raise at least $250,000 to enter five teams into a fundraising competition known as “Midnight Madness”.

Traditionally the purview of Goldman Sachs bankers, this year the all-night competition has expanded to include other financial groups. Goldman will now compete in the lavish scavenger hunt and puzzle-solving game against Citi, Credit Suisse, the hedge fund BlueMountain and Secor Asset Management.

The competition takes place on October 5 and has already kicked off a flurry of activity across a competitive Wall Street. The prospect of earning bragging rights in a battle of wits against rivals while raising money for charity is set to lure about 250 traders, quantitative analysts and bankers to this year’s event.

“This type of mental Olympics, combined with adventure, is something that I think might have a broad appeal on Wall Street, and when it’s all for a good cause it’s an attractive combination,” said Michael Liberman, managing partner at BlueMountain.

Goldman has asked participants to stump up at least $50,000 per team. Proceeds go to Good Shepherd Services, a New York City-based charity which offers education and support services for poor or at-risk children and teenagers.

A pamphlet used to pitch Midnight Madness to potential participants describes the games as “a series of cleverly camouflaged, incredibly ingenious and devilishly difficult puzzles – the answers to which indicate the location of the next puzzle . . .”

Last year’s competition saw teams play with lasers in an abandoned building, use circuit boards to reveal locations on a map, and work to change the colour of the lights at the top of a New York skyscraper.

The geekiness of the Manhattan-based event has earned it a reputation for attracting the cadre of “quant” maths experts who have increasingly come to dominate Wall Street institutions and their trading strategies.

This year’s event will include 25 teams of 10 people each, organisers said. Goldman is fielding 16 teams, down from the 20 it sent last year.

From next week, Citi will hold a series of silent auctions and challenge senior staff to “dares” in order to raise the $250,000 in funds it needs to compete. One executive plans to pay $5,000 to challenge Mr Keegan to croon “Danny Boy”.

Citi staff can also pay $20 to wear jeans (usually a no-no on the trading floor), proffer cash to throw pies at their superiors, or enter a hot dog-eating competition. The bank chose team members in a random draw after receiving more than 100 volunteers.

At Credit Suisse, convincing staff to participate in the elaborate competition was relatively more challenging. “It had this reputation of an event that’s very complicated and extreme,” said Dan Miller, head of strategic risk management for the investment bank.

The bank is entering one team into the event and raising cash the old-fashioned way – through solicitation. Division heads were asked to pay $5,000 each to nominate one of their brightest underlings to the Swiss bank’s team.

The Credit Suisse team has also been given a $3,000 budget to buy supplies such as cellphone chargers and copious amounts of Red Bull, the energy drink.

Elisha Wiesel, a partner at Goldman and a member of Good Shepherd’s board, said it is not unknown for contestants to fall asleep on the sidewalk while competing in Midnight Madness, which was started in the 1990s but went on hiatus in 2007 until it was revived last year by Mr Wiesel and other organisers.

“This is really like a marathon. It’s a sporting event,” Mr Wiesel said. “You have to survive a very, very challenging evening, morning and potentially afternoon.”

Last year’s “Madness” raised $1.4m, after about $270,000 of expenses. This year’s budget is “going up a little bit” because the event is “aiming to be more ambitious and make more money for the charity,” Mr Wiesel said.

The hefty budget for last year’s event drew some scepticism, including from Reuters columnist Felix Salmon, who wrote that “at some point you do have to wonder whether they really needed to spend that much money on the game design”.

When asked whether the competition could become an annual Wall Street event, Mr Wiesel said that it would depend on organisers’ ability to commit their time.

But he added: “This is just too cool and too fun not to do.”

Those looking to get on the new CIO’s good side can go here, to an old FT Alphaville post, to try out some Midnight Madness puzzles and practice lateral thinking for themselves.

Read the world

Read the world

I love to travel and I love to read.

I read some great books on my most recent trip to Nepal, which led me to list some other memorable reading recommendations from some other recent-ish travels.


Massacre at the Palace – I was surprised to see that the paperback version of this book isn’t available on Amazon given that it seems to be in every bookstore in Kathmandu. Regardless, this is a compelling account of the 2001 massacre of Nepal’s royal family. It’s packed full of history but reads like a thriller. Interestingly, a big chunk of the Nepalese population doesn’t seem to buy that Crown Prince Dipendra murdered his family and then committed suicide – one reason the book gets mediocre reviews on Amazon. If you visit Narayanhiti Palace in Kathmandu, you’ll also notice no mention of Dipendra’s role in the massacre or his suicide.

Into Thin Air: A Personal Account of the Mt. Everest Disaster – Compulsory reading for trekkers in Nepal I guess. I read this book and then dreamed of Everest for the next week (not in a good way). Make sure to read the end bit in which Jon Krakauer deals with a rival account of the 1996 Everest Disaster by Anatoli Boukreev.

From Goddess to Mortal: The True Life Story of Kumari – This is the photo you’ll see on every travel brochure for Nepal – the Kumari is a young girl believed to be the physical manifestation of the Goddess Taleju. There are at least three in the Kathmandu Valley and this is an account written by a former Royal Kumari of Kathmandu in the early 1980s. Perhaps the most interesting thing in this is getting first-person perspective of her life (including her thoughts on tourists!) and her opinion on the role of Kumari in Nepalese society. While some have criticised it as a form of child labour, this ex-Kumari believes the position can help unite religions since the tradition sees girls from a Buddhist Newari caste become the embodiment of a Hindu goddess. If you don’t want to read, this documentary on the Bhaktapur kumari is also excellent, free to watch, and occurs against the backdrop of Nepal’s Civil War.

Pakistan, India and the Middle East

The Dancing Girls of Lahore: Selling Love and Saving Dreams in Pakistan’s Pleasure District – Sociologist Louise Brown spent a long time living with and shadowing a family of dancing girls in Heera Mandi, the Lahore’s ancient red-light district. There’s obviously a firm-focus on sex work in this but Brown’s account also contains much detail about the daily life of the poor in Pakistan, including food, religion, cleanliness and the stubbornness of the caste system.

The Taliban Shuffle: Strange Days in Afghanistan and Pakistan – Journalist Kim Barker gives her account of war reporting from Afghanistan and Pakistan.

Inside the Kingdom: Kings, Clerics, Modernists, Terrorists, and the Struggle for Saudi Arabia – Seems to be standard recommended reading on Saudi Arabia.

City of Gold: Dubai and the Dream of Capitalism – A highly-readable one-stop shop account of Dubai (and to some extent, the entire UAE’s) transformation from desert outpost to modern metropolis. The first section is history, followed by some contemporary issues divided by topic – including labour rights, environmental degradation and social problems caused by a huge influx of immigrants. Worth reading as more and more Gulf states attempt to wean themselves off oil.

The Media Relations Department of Hizbollah Wishes You a Happy Birthday: Unexpected Encounters in the Changing Middle East – Neil MacFarquhar is a well-traveled reporter who gives a great cultural and political tour of the Middle East, organised by country. This is the book that taught me about ‘Bebsi‘ and Fairuz.

Behind the Beautiful Forevers: Life, Death, and Hope in a Mumbai Undercity – A true-life account of a family living in a Mumbai slum that reads like a Charles Dickens novel. The human impact of India’s convoluted courts system is one thing that really struck me from this Pulitzer Prize-winning book.

Guatemala, Mozambique, Various

The World Until Yesterday: What Can We Learn from Traditional Societies? – There’s a tendency to write off traditional societies as primitive or old-fashioned but Jared Diamond makes the case that many of their customs and practices persist for a reason. This book has stuck with me for a long time – and the lesson he learns about “constructive paranoia” in the aftermath of a boat accident somewhere off the coast of New Guinea is one I tend to bear in mind whenever I travel.

China’s Second Continent: How a Million Migrants Are Building a New Empire in Africa – One of the things that surprised me in Mozambique was the pervasive presence of the Chinese. From Maputo to Maxixe, Beijing’s influence is behind everything from football stadiums to newly-constructed roads and the trucks and cars on them. Howard French’s book tackles this issue and includes some memorable anecdotes – including a Chinese immigrant attempting to repopulate the continent in his image.

The Art of Political Murder: Who Killed the Bishop? – Riveting and informative tale of Bishop Juan Gerardi’s 1998 death in Guatemala City. A good introduction to some of the horrific history of Guatemala’s long civil war as well as its continued troubles with gangs and general political corruption.

Banana: The Fate of the Fruit That Changed the World – I never thought I’d enjoy reading a book about the history of a fruit (although, that said, I did read this book exploring every ingredient contained in Twinkies and it was pretty great) but I picked this up before heading to Guatemala in an effort to get a grip on the United Fruit Company and its role in the country. What I got was much more – including, eventually, an Odd Lots podcast with the author Dan Koeppel.

Previous Convictions: Assignments from Here and There – A travelogue by the late, great AA Gill.