New rules and new technology are changing the way Wall Street does business. That has led to innovation, but it has also meant that old tricks appear in new guises, as DealBook shows in its fall special section on ideas and innovation.
Bankers complain that the government’s overhaul of the financial system has raised the cost of doing business. But it may also be pushing banks to innovate in important ways, DealBook’s Peter Eavis writes. “The banks have for decades raised returns for shareholders with high levels of borrowing. The overhaul restricts that borrowing, so banks will now have to work much harder to post the sort of returns their shareholders expect,†Mr. Eavis writes.
“Banks may decide to toss out old practices and adopt new ways of serving clients,†Mr. Eavis writes. “Wall Street firms are devising new ways of making securities available to customers. Retail bank executives are rethinking how they can reduce branches while still serving customers. They also cannot ignore the start-up firms that are using technology to make loans far more quickly than banks do.â€
With the rise of social media, a quest to mine Twitter for investing gold is entering the financial mainstream. This week, the New York Stock Exchange plans to introduce a faster version of a service that gives investors a window into how particular stocks are being discussed on Twitter, complete with “sentiment†scores that reflect whether the chatter is positive or negative, William Alden reports in DealBook. That effort, a partnership with a start-up called Social Market Analytics, is among several social data projects making inroads in an industry that has kept Twitter and Facebook at arm’s length.
But as market technology has changed, so have the methods for committing abuse, Peter J. Henning writes in the White Collar Watch column. “The growth of high-frequency trading firms and transactions executed on alternative trading systems, called dark pools, have made it more difficult to police potential manipulative conduct,†Mr. Henning writes. “The challenge for regulators is ferreting out abusive conduct from permissible programs that may involve thousands of orders entered â€" and often canceled â€" in milliseconds.â€
In the digital age, employers should examine whether money alone is a sufficient incentive for employees, Tony Schwartz writes in the Life@Work column. “Rather than trying to demand more and more from employees, employers need to invest more generously in meeting their people’s core needs: physical, emotional, mental and spiritual. When employees feel better taken care of, they’re freed, fueled and inspired to take better care of their customers and clients.â€
That’s just a preview. Watch the DealBook site throughout the day for the remaining stories in the section.
The special section coincides with the second annual DealBook conference, to be held on Nov. 12 in Manhattan. Speakers include Preet Bharara, David Bonderman, Ray Dalio, Barry Diller, Laurence D. Fink, Valerie Jarrett, Daniel S. Loeb, Elon Musk, Ruth Porat and David M. Rubenstein, among others. Don’t hesitate to submit questions online.
BLACKBERRY’S WOES DRAW CANADIAN MOGUL INTO SPOTLIGHT  | Last Monday, when Fairfax Financial Holdings and BlackBerry announced a deal that would raise $1 billion in cash through convertible debt, many viewed it as just another stalling tactic in a situation where few good outcomes are likely, David Gelles and Ian Austen report in DealBook. It was a last-minute solution after V. Prem Watsa, the chairman of Fairfax, and his team failed to find co-investors for a bid to buy the struggling smartphone maker. The battered shares of BlackBerry dropped even lower.
“Yet Mr. Watsa’s determination to be personally involved in a messy corporate implosion speaks to his own pride, his affection for Canada and his reluctance to walk away from what could be one of the worst moves he ever made,†Mr. Gelles and Mr. Austen write. “Arguably Canada’s leading contrarian investor, Mr. Watsa enjoys a disproportionately large reputation as a canny player within the country’s relatively small financial community.â€
ON THE AGENDA  | The Securities Industry and Financial Markets Association, or Sifma, recommends that the bond market be closed for Veterans Day. Lloyd C. Blankfein, the chief executive of Goldman Sachs, and Laurence D. Fink, the chief executive of BlackRock, are among the speakers at Sifma’s annual meeting.
TREASURE HUNTERS OF THE CRISIS  | “Much attention has been lavished on the speculators who reaped huge paydays betting against the subprime mortgages that stoked the financial crisis,†Peter Lattman writes in The New York Times. “But what about the big long? During the dark days of late 2008, while other investors dumped their holdings or sat paralyzed on the sidelines, who decided that it was time to put money on the line? Who bought low and then sold high?â€
A number of skilled financiers made billions by obeying one of Warren E. Buffett’s favorite aphorisms: “Be fearful when others are greedy, and be greedy when others are fearful.â€
Nitro Circus, Extreme Athletics Brand, to Merge With Touring Company  | The high-octane entertainment brand will announce that the separate entities that produced the live shows and television programs are becoming one company. DealBook »
Vox Media Buys Curbed.com Network of Sites  | The New York Times reports: “Vox Media, a company with three strong digital brands, including the technology site The Verge, is adding to its portfolio. The company plans to announce on Monday that it is buying Curbed.com L.L.C., which runs three web publications that deliver in-depth neighborhood coverage, with attitude, of real estate, dining and retailing.†NEW YORK TIMES
Shire of Ireland to Pay $4.2 Billion for U.S. Drug Maker  | The Irish pharmaceutical firm Shire will acquire the outstanding shares of ViroPharma of Pennsylvania for $50 a share, a 27 percent premium. DealBook »
Novartis to Sell Diagnostics Unit to Grifols for $1.7 Billion  | The sale by the Swiss pharmaceutical company Novartis comes as part of an effort to focus on its larger business units. DealBook »
Big Banks Said to Consider Blocking Traders From Chat Rooms  | The Wall Street Journal reports: “Big banks are considering blocking employees from computer chat rooms that have become pervasive tools of the modern trading floor, but which face mounting scrutiny from regulators as potential venues for collusion and market manipulation.†WALL STREET JOURNAL
On Wall Street, Concerns About Inequality Take Root  | “Some big investors have worried increasing income and wealth gaps threaten the economy’s ability to expand,†The Wall Street Journal’s Heard on the Street column writes. WALL STREET JOURNAL
Adding Up the Risks in Floating Rate Debt  | The biggest risk in investing in the Treasury Department’s new type of debt is one that, in theory, should not even exist: payment risk, Stephen J. Lubben writes in the In Debt column. DealBook »
A Cleaned-Up Version of Earnings  | “Managements’ recommended measures, typically not found in generally accepted accounting principles, have an uncanny way of burnishing a company’s results. They do so by eliminating some pesky costs of doing business,†Gretchen Morgenson writes in the Fair Game column in The New York Times. NEW YORK TIMES
Endowment Stars, Outside the Ivy League  | The long success of the Yale model underlies a widely cited theory of managing an endowment. But the success of some fast-growing endowments “suggests that the much envied and copied Yale model may be showing signs of fatigue,†James B. Stewart writes in the Common Sense column in The New York Times. NEW YORK TIMES
The Standouts of Private Equity  | There now appear to be noticeable differences among the publicly traded private equity companies. It should be a welcome change, even if it reflects some short-term thinking about a long-term business, Jeffrey Goldfarb of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
Icahn and Transocean Resolve Proxy Battle  | Under an agreement with Carl C. Icahn, the oil drilling company Transocean plans to pay a dividend of $3 a share and reduce the maximum number of directors on its board. REUTERS
Twitter Looks Outside Its Walls for Growth  | “For Twitter to justify the high valuation of its stock, the micro-messaging company must spread the gospel of tweeting far beyond its current active user base of 232 million accounts,†The New York Times writes. NEW YORK TIMES
Price Cost Twitter Cash but Gave It Credibility  | Had the company sold its 70 million shares at $45.10 instead of $26, it might have raised $3.16 billion instead $1.82 billion. DEALBOOK
For Creator of Twitter’s Whale, a ‘Fail’ in Name Only  | Yiying Lu did not receive much money from Twitter for creating the image that became the famous “Fail Whale,†but it opened the door to other opportunities. DealBook »
Start-Ups Mine Local Information for Global Insights  | Newly minted technology companies are gathering data and analyzing it much faster than was possible even a couple of years ago, aiming to project economic trends from seemingly unconnected information, The New York Times reports. NEW YORK TIMES
A Founder of Twitter Focuses on Longer-Form Writing  | Evan Williams, one of Twitter’s co-founders, is behind a new platform, Medium, that aims to restore a measure of rationality to the online conversation. NEW YORK TIMES
Bieber’s Manager Is Raising a Music Investment Fund  | “For the managers of pop stars, is there strength in numbers? That is the idea behind a new $120 million venture by Scooter Braun, the manager of hit acts like Justin Bieber, Carly Rae Jepsen and Psy,†The New York Times reports. NEW YORK TIMES
SAC Pleads Guilty, Then Judge Calls a Timeout  | The judge overseeing SAC Capital Advisors’ insider trading case declined to give the firm’s guilty plea preliminary approval, saying she would study the case and rule in March. DealBook »
Now, Batista’s Shipbuilding Firm to File for Bankruptcy  | The move comes as Eike Batista’s firms, once symbols of Brazil’s might, have suffered under the weight of huge debt. DealBook »
2 Accounting Firms Barred by S.E.C. Â |Â Sherb & Company and Patrizio & Zhao were barred by the Securities and Exchange Commission from performing audit work, after regulators found their reviews of Chinese companies listed in the United States contained multiple failures, The Financial Times reports. FINANCIAL TIMES
Job Growth Eases Fears About Effect of Shutdown  | “Despite dysfunction in Washington and a 16-day government shutdown, the economy chugged along in October, surprising many analysts as private sector hiring bounced back after a spring slowdown,†The New York Times writes. NEW YORK TIMES
