A collection of stories from SmartBrief publications and around the web…

“One last thing before I go…”: This retirement speech by James Kidney, a former trial lawyer at the Securities and Exchange Commission, made waves this week for the shots he takes at the sometimes sheepish leadership at the Commission and revolving door ambitions of some staffers. “The revolving door is a very serious problem. I have had bosses, and bosses of my bosses, whose names we all know, who made little secret that they were here to punch their ticket. They mouthed serious regard for the mission of the Commission, but their actions were tentative and fearful in many instances. You can get back to Wall Street by acting tough, by using the SEC publicity apparatus to promote yourself as tough, and maybe even on a few occasions being tough, if you pick your targets carefully.”

Kidney’s speech includes a few more daggers like the one above. (read more…)

A collection of stories from SmartBrief publications and around the web…

Wait … Derivatives are good for the economy?: With all the bad-mouthing out there about derivatives, you might be surprised to learn that the very smart people at the Milken Institute have completed a study that found derivatives are actually a net positive for the economy. “This study charts the benefits to the wider economy from the use of financial derivatives and is a first-of-its-kind examination of derivatives’ quantitative impact on economic growth. It charts the positive effects in the U.S. economy from their use, both in the financial and non-financial sectors.”

Explaining last year’s Nobel winners: Count me among the people who struggled to connect the dots between the work of the three winners of last year’s Nobel Prize in Economic Sciences – Eugene Fama, Robert Shiller and Lars Peter Hansen. This Harvard Business Review blog post nails it. (read more…)

A collection of stories from SmartBrief publications and around the web…

Stumbling Stress Tests: Now that the convoluted results of stress tests conducted by U.S. Federal Reserve are in, all eyes can shift to Europe as the European Central Bank and European Banking Authority prep for their own brand of testing. However, Mayra Rodríguez Valladares from MRV Associates is rather pointed in her skepticism of the Europeans’ methods: “Given banks’ enormous data collection and aggregation challenges and the fact that the stress tests are likely to rely on a risk-weighted asset framework where banks get to pick a lot of the risk drivers for the models, no one should hold their breath about the validity of those stress tests.”

Adding insult to injury: All those Bank of America shareholders who were angered by the actions of Ken Lewis during the firm’s takeover of Merrill Lynch have got to be smoldering yet again. (read more…)

A collection of stories from SmartBrief publications and around the web…

OCC says Volcker implementation to cost banks between $412M and $4.3B: That price tag sounds shockingly low. Considering all the fuss Wall Street has raised over the past few years desperately trying to beat back Volcker, that range is downright amazing. The estimate is for the cost spread across only the banks the OCC regulates. I would venture to guess those firms have spent somewhere in that range breathlessly lobbying against Volcker.

Wait … Goldman Sachs is calling for more regulation?: In this Wall Street Journal op-ed, Goldman Sachs President and COO Gary Cohn offers a pretty detailed plan for curbing some aspects of high-frequency trading. Outgoing CFTC Commissioner Bart Chilton probably thinks this is some kind of going away present from Cohn. A more cynical view would be that Goldman traders aren’t exactly the fastest “cheetahs” on the street, so Cohn is really just trying to level the playing field. (read more…)

More and more financial advisors are adopting social media to help build their business. SmartBrief recently chatted with Melissa Socci, senior vice president of brand and analytics for LPL Financial, to get her insight on best practices for advisors as they delve into social media. The following is an edited transcript of that conversation.

LPL was a relatively early adopter of social media within the finance space. What lessons did you learn early on about getting advisors to embrace social media?

Our advisors have been able to use social media for about 4 years now and we continue to work with them to help them understand it. These are numbers people so they want to know what the hard ROI numbers are. They want success stories about what has worked from Day One right up until now.

Social media is part of a larger mix of an advisor’s marketing plan. It is not a plan in and of itself. (read more…)