Weekend Reading: Aug. 10, 2012 - SmartBrief

All Articles Finance Modern Money Weekend Reading: Aug. 10, 2012

Weekend Reading: Aug. 10, 2012

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Modern Money

News and analyses worth a read this weekend …

A former software engineer wrote in The New York Times about how algorithmic-trading firms could learn a thing or two from credit card companies about merging human intelligence with artificial intelligence to avoid the next Knight Capital Group debacle.

Gillian Tett wrote in the Financial Times about the ebb and flow of financiers demanding this thing silly thing called “collateral” to conduct transactions. “Ever since the western world abandoned the gold standard, there has been a stealthy shift away from the idea that financial transactions needed to be secured on tangible assets. Creating credit flows or deals with the click of a computer button became the norm.” It’s good to see someone pointing out how IOUs pledging the very same — often poorly valued — collateral to multiple counterparties is probably a risky business practice.

Reuters reported that after the U.S. Chamber of Commerce and good chunk of the financial-services sector persuaded Congress to kill a bill on cybersecurity, the Obama administration might act on its own.

The White House appears to be laying the groundwork to remove Ed DeMarco from his post atop the Federal Housing Finance Agency. According to Bloomberg, such a move might be more complicated than it seems.