啊啊抱歉呀，小杀妹今天来晚了……TT……大家久等，BOW~~
今天的TIME 1\2来自一篇文章，前面有一小部分warm up，TIME 3\4\5来自一篇文章。据说最近比较流行越障option，所以今天我也来跟个风，哈哈；采取选作的另一个理由是，上周第一次发essay，虽然大家普遍反应文章比较难，但是也有筒子提出希望能够有机会继续练习essay风格的阅读，所以调和一下大家的口味啦！今天的OPTION A来自The Economist，属于我们比较传统的越障文，但是文章比较长，节选了一部分（不过貌似节选完还是很长…），另外，为不影响阅读，文中原有的两幅图表附在文章最后；OPTION B来自一篇经典Essay，E.F. Fama的Market efficiency, long-term returns, and behavioral finance，其中的Introduction部分。以后呢，LZ计划越障一篇用类似The Economist上面的时文，一篇节选一些经管方面的经典Essay（Essay的题目不会隐藏），练阅读和逻辑思维，同时提高姿势水平~~大家各取所需啦！
唔，啰嗦了那么多，激动人心的作业终于要和大家见面咯！
【PART I: SPEED】
Article 1: Rejoice! The End of ‘User Name and Password’ May Be Nigh
By Christopher MatthewsMay 16, 2013
(Check the title later)
【WARM UP】
What’s the absolute worst part of the Internet? Reasonable folks may disagree. One could argue pop-up ads, another might posit the endless stream of baby photos on your Facebook feed. But most would agree that keeping track of an endless string passwords ranks somewhere at the top.
Nobody, of course, can remember a unique password for the dozens of sites we each sign into each day, so we end up using the same one over and over again. But this practice makes us increasingly vulnerable to hackers who can find valuable passwords for our bank accounts and email by breaking into poorly protected sites.
A study released last month by Nok Nok labs showed that the average Internet user had 6.5 passwords, and they shared one password, on average, between 3.9 websites. Furthermore, ever-growing computer power is causing even safe passwords to be vulnerable. According to a report released earlier this year from consulting firm Deloitte, more than 90% of user-generated passwords are “vulnerable to hacking.” Reads the report:
“Most organizations keep usernames and passwords in a master file. That file is hashed: a piece of software encrypts both the username and password together. Nobody in the organization can see a password in its unencrypted form . . . So far, so secure. However, master files are often stolen or leaked. A hashed file is not immediately useful to a hacker, but various kinds of software and hardware . . . can decrypt the master file and at least some of the usernames and passwords. Decrypted files are then sold, shared or exploited by hackers.”
【265 WORDS】
【TIME 1】
In recent years, the scope of this problem has become apparent as high-profile websites like LinkedIn and Gawker have suffered major breaches of their password databases. And while there are steps users can take to protect themselves, like using complicated passwords or taking advantage of two-step verification login systems, it’s clear that most users simply don’t protect themselves well enough.
This is why a consortium of tech companies, including PayPal and Google, have joined together to dream up the future of passwords. And the future, according to this FIDO Alliance (which stands for Fast Identity Online) is to have no passwords at all. “Passwords are just not working terribly well anymore,” says Michael Barrett, Chief Information Security Officer of PayPal and President of FIDO. “And they’re starting to impede the development of the Internet ecosystem.”
Barrett says that the failure of the password system isn’t an immediate crisis for Silicon Valley, especially for companies that have the wherewithal to invest in robust security systems. But if the problem keeps getting worse, it will begin to erode people’s confidence in online commerce, hurting the industry all around. FIDO is an effort by the industry to get ahead of this problem and dream up a replacement to the password system before its too late.
【TIME 1 ENDS – 212 WORDS】
【TIME 2】
So what is FIDO’s solution? As a consortium of companies, FIDO isn’t interested in coming up with a single alternative to passwords, but rather wants to create a technological framework through which different companies can offer alternatives to the password system. While FIDO is agnostic about what method or methods of “authentication” ultimately replace the password, Barrett explained that the technology exists for devices like computers and smartphones to recognize who you are through your unique physical qualities.
For instance, camera resolution on computers and phones is advanced enough that your computer could verify who you are by scanning your face or eyes. And Barrett expects that within a year smartphones with fingerprint scanners will hit the market. Other examples of authentication methods include touch screens that can read your signature, and voice-recognition software.
If a user has one of these devices, then websites which join the FIDO system can choose which authentication methods to accept. For instance, PayPal might decide to allow users to sign in using voice and face recognition.
But biometric methods aren’t the only way users could decide to sign into websites. They could decide instead to use a combination of a password and physical object like a USB plug that would tell your device that you are who you say you are. This combination of a password and a device that you carry around with you is much safer than a simple password, and would allow the use of easy-to-remember passwords, since the account can’t be hacked unless accompanied by the physical device as well.
Barrett claims that this process of moving away from passwords will take a period of years, but says that the technology to do it is available now. It’s just a matter of websites and devices getting together to make it work. He believes it will happen because, in the tech world at least, consumers are pretty good at getting what they want.
Says Barret, ”Consumers want something that’s easy to use and secure. Passwords are neither.”
【TIME 2 ENDS – 336 WORDS】
Source: TIME
http://business.time.com/2013/05/16/rejoice-the-end-of-the-user-name-and-password-is-nigh/#ixzz2TT75JVQ9
Article 2: Notes on three scandals
A bad week for the president is revealing of what really irks voters
May 18th 2013 |From the print edition
(Check the title later)
【TIME 3】
JUST a few days ago Barack Obama’s administration was being followed around by one substantial scandal, involving the September 2012 terrorist attacks in the Libyan town of Benghazi, which left America’s ambassador and three aides dead. The allegations are both grave and convoluted, but the central Republican charge is that there was a monstrous cover-up: Team Obama put officials on television to claim that Americans were killed by spontaneous protests that turned deadly, rather than in attacks by terrorists that could have been foreseen.
Frustratingly for the right, the Benghazi scandal, though big on conservative radio and TV, has struggled to gain traction beyond core Republicans. Most Americans tell pollsters they are not paying attention, and split along party lines when asked who they believe over Libya.
In part, that is because a Benghazi cover-up has always been a slender reed on which to construct an edifice of Republican outrage. Some senators suggest that it might lead to Mr Obama’s impeachment, and growl that it disqualifies his former secretary of state, Hillary Clinton, from ever seeking high office again. But that’s a stretch. The government’s initial response to what happened in Benghazi, as exposed by recently leaked e-mails, does reek of evasion and inter-agency finger-pointing. With the 2012 elections looming, officials feared handing Congress a weapon with which to beat the administration, or being first to admit a harsh truth: that to encourage Libya’s post-Qaddafi rulers, American envoys and spooks were sent to a lethally dangerous city.
But Mr Obama has admitted that American officials died in Benghazi because they were not properly protected and has taken responsibility for those lapses. For proof that Republicans know they do not have enough to hang the president, consider the efforts by members of Congress to improve the scandal. At hearings on the matter in Congress, Republicans have repeatedly asked whether fighter jets or special forces could have been scrambled in time to save lives in Benghazi, but were grounded by faint-hearted superiors. If true, that would indeed be scandalous, but each time the evidence has pointed the other way, leaving Mr Obama’s foes grumbling about “unanswered questions”.
【TIME 3 ENDS – 355 WORDS】
【TIME 4】
Now Mr Obama has two more substantive scandals to keep and cherish. The first involves astonishing misconduct by the Internal Revenue Service (IRS). Facing a surge in campaign groups formed during Mr Obama’s first years in the White House, and worried that many were too political to merit tax-exempt status, inspectors hit upon the shortcut of targeting groups with names containing “tea party” or “patriot”. Later, when that triggered complaints of bias, IRS officials switched to scrutinising groups that wanted to change the size of the government or even criticise it, firing off demands to know who led each group, what they were saying in newsletters or on the internet, and even what their members were reading.
Though the government has a right to police overly political non-profit groups, liberal groups appear to have endured less harassment. Worse than wicked, the IRS’s behaviour was stupid: faced by angry citizens with a Don’t Tread On Me loathing of taxes, the agency sent taxmen to tread on them. Mr Obama, so confident in pushing back over Benghazi , has taken a very different line over IRS overreach, calling it “intolerable and inexcusable”. On May 15th the acting IRS boss was told to resign and Mr Obama vowed to work with Congress on new safeguards.
A third scandal involves the Department of Justice, which secretly obtained screeds of telephone records for journalists at the Associated Press (AP) news agency while hunting for the source of leaks about a failed al-Qaeda attack. Unlike the IRS, which—post-Watergate—is supposed to operate at arm’s length from the president’s administration, the Justice Department is under its direct control, and the trawl of journalists’ records seems unusually sweeping. Though that might make the AP scandal sound dangerous, Washington cynics are already suggesting that it may not go very far. Most Americans do not like journalists very much, they note; nor are they keen on officials who leak secrets.
But again, normally defiant allies of the president have been forced onto the back foot. Democratic bigwigs in Congress have called for more complete answers about the AP and IRS sagas, with one complaining that Mr Obama cannot raise the flag and expect supporters to “salute it every time”.
【TIME 4 ENDS – 370 WORDS】
【TIME 5】
Beneath the noise, a row about government
Republicans have duly pounced, and in doing so executed a neat pivot away from their Benghazi rage. In essence, the real charge driving their Benghazi scandal was one of dereliction of duty, and the insinuation that Mr Obama is too weak (or does not love his country enough) to use American might to keep his own envoys safe. Now Republicans have begun calling him a tyrant, willing to use government power to crush freedoms crafted by the founding fathers. In a twinkling he has gone from a weakling Jimmy Carter to a modern-day George III.
That may be a dizzying turnaround, but it makes political sense. The IRS row is, at a minimum, a gift to Republicans ahead of 2014 mid-term elections, while the AP row deals a double blow to a president who has disappointed supporters over civil liberties before, and suffers from chilly relations with the press.
More broadly, calling Democrats weak on national security used to be a vote-winner. Two costly wars have altered that. This may be the first lesson of the scandals now lapping at the White House door. Spend months attacking Mr Obama for using America’s might too cautiously, as in Libya, and he shrugs it off. Attack him for government overreach, and he is on the defensive. For supporters of an activist government, these are perilous times.
【TIME 5 ENDS – 231 WORDS】
Source: The Economist
http://www.economist.com/news/united-states/21578070-bad-week-president-revealing-what-really-irks-voters-notes-three
【PART II: OBSTACLE】
OPTION A：
Article 3: We happy few
Investment banking is increasingly becoming a game of winner-takes-all
May 11th 2013 |From the print edition
(Check the title later)
MOST INVESTMENT BANKERS think a lot of themselves, but they seldom crow about their competitors’ troubles in public. So it came as a surprise when Gary Cohn, the president of Goldman Sachs, told a press conference in Brazil in April that banks other than his and JPMorgan were “taking a pretty substantial step back from the markets” in a way that had not been seen “in the entire history of banking”.
He was not exaggerating. Across the world the investment-banking industry is caught up in an unprecedented wave of deleveraging and deglobalisation. In large parts of the rich world most banks are shrinking their balance-sheets, retreating from foreign operations and closing businesses. This is dramatically reshaping the industry. In future it will increasingly be polarised into, on one hand, a handful of global “flow monsters” that stand astride global capital markets, and large numbers of much smaller regional and domestic banks on the other.
Patriotic deleveraging
A report by McKinsey last year found that cross-border capital flows (including bank lending) collapsed to about $4.6 trillion last year from $11.8 trillion in 2007. This drop in cross-border banking is being encouraged by bank regulators, which are pressing banks to shrink but still supplying credit to their domestic markets. That is leading to what Morgan Stanley’s Mr van Steenis has called “patriotic deleveraging”. Of the $722 billion in assets and operations that commercial banks have sold off since 2007, almost half were in foreign operations.
This is being most keenly felt in Europe. Back in 2007 the biggest European banks (including Barclays, which bought the American operations of Lehman Brothers the following year) came close to rivalling America’s banking giants, with a 22% share of global investment-banking revenues. Last year Europe’s share of global revenues had slumped to 17%. Since the crisis European banks have cut their cross-border lending by some $3.7 trillion, and their retreat is far from over. In a recent report the IMF estimated that this year banks in Europe may cut their assets by about $2.8 trillion.
The most obvious reasons why European banks are having to pull back much faster than American ones are the region’s economic slowdown and worries about the survival of the euro. Yet these have also brought to light an underlying structural disadvantage suffered by Europe’s banks: the currencies in which they can take deposits and most easily raise funds are not the main currency of global trade. When American investors took fright at the euro crisis in early 2012 they stopped rolling over dollar-based money-market loans to European banks, forcing them into a sudden retreat from big markets such as providing trade finance in Asia and Africa.
European banks have also been quicker to implement the Basel 3 rules than their foreign competitors, so the consequences have hit them sooner. This will level out soon enough, but for the moment some American investment banks are able to expand their balance-sheets even as European ones are forced to contract theirs. “Every big bank in the world has a gun to its head,” says Nomura’s Mr Schorr of the new capital rules. “But the Europeans have the biggest guns.”
Slimline in Switzerland
The banks that have retrenched most are Switzerland’s two big investment banks. Previous bosses had hoped to build them up enough to join the world’s five largest, but the current heads of both say they are happy with the more slimline versions. “It was time for UBS and its shareholders to consider different ways of doing investment banking, given the lack of success and the changing regulatory requirements we’ve had,” says Sergio Ermotti, UBS’s chief executive.
Credit Suisse changed strategy just before the onset of the financial crisis. It has cut its balance-sheet from almost SFr1.4 trillion ($1.1 trillion) in 2007 to little more than SFr900 billion now and plans to shrink it further still. Its main focus now is on “capital-light” businesses where it has scale. UBS has cut back dramatically in most of its FICC businesses and now hopes to make most of its money from wealth management. It will keep a foot in investment banking only in areas where it is strong and where the rules do not require huge allocations of regulatory capital, such as trading currencies and shares or advising on takeovers.
Both Swiss banks moved sooner and faster than rivals, not least because both have strong wealth-management businesses to fall back on, but many think that the rest of the investment-banking world will be going the same way. “The essence of what we are doing is not because we have a Swiss regulator, it is because we are applying Basel 3,” says Mr Ermotti.
British banks have been forced on the retreat, too. Royal Bank of Scotland was once ranked among the world’s ten biggest investment banks by revenue after an audacious (if ill-conceived) expansion before being felled by the crisis. Now majority-owned by a government unwilling to let it risk taxpayers’ money in trading markets, it has had to draw back. Barclays, which had methodically built up a strong franchise in trading debt, saw the demise of Lehman Brothers as an opportunity to catapult itself into the ranks of the world’s five largest investment banks. Yet a series of missteps, including its involvement in trying to rig LIBOR, a benchmark international interest rate, and the mis-selling of interest-rate swaps to small British businesses, have tarnished its reputation. Regulators are now clipping the wings of its investment bank.
The retreat of Europe’s investment banks is interacting with two other trends. One is the growing power of the industry’s biggest banks as the move to electronic trading favours those with the largest market shares. A second, subtler shift that may well determine which banks will dominate investment banking in the medium-term future is a gain in market share for big universal banks, which combine corporate and commercial banking with investment banking.
Mr Spick reckons that big universal banks have increased their share of FICC markets by about 12 percentage points since 2006, whereas traditional investment banks have lost out over the period. Part of this is simply because the financial crisis thinned out the field as almost all America’s stand-alone investment banks collapsed or were bought up. Titans such as Lehman Brothers, Bear Stearns and Merrill Lynch all had to change their nameplates within a few months, leaving Goldman Sachs and Morgan Stanley as the last of their breed. Yet the biggest universal banks have continued to gain ground over the past five years, for several reasons.
One is that since the financial crisis almost all banks have become stingier about lending. When big corporations had almost unfettered access to credit, they could play one off against another for the cheapest loans. They could also shop around freely for takeover advice. Now that credit is scarce, banks with big balance-sheets are in a stronger position to demand more of the juicy business if clients want to keep borrowing. One potential barrier to the continued rise of universal banks may be regulations such as those that will ring-fence banks’ retail arms.
Credit ratings play their part too. Banks with a spread of businesses have generally been able to hold onto stronger credit ratings and enjoy more implicit government guarantees than those, like Morgan Stanley, that focus more narrowly on investment banking. This can make a huge difference not only to a bank’s cost of borrowing but also its ability to write derivatives contracts and win investment-banking business.
【OBSTACLE OPTION A ENDS – 1249 WORDS】
【THE REST】
Make it stick
Being a prime broker to hedge funds, for instance, is not in itself the most profitable of businesses, but it feeds a flow of trades into banks’ equities and FICC businesses. It is also a sticky and concentrated business. Hedge funds typically enmesh their operations closely with those of their prime broker and will often do much of their trading with the firm. This is to reduce the amount they have to borrow and the collateral they have to post, since many of their trades may partly offset one another (buying shares in one firm, say, and shorting those of another).
Yet since the collapse of Lehman Brothers in 2008, itself a large prime broker, hedge funds have become pickier about which banks they get close to, often preferring to concentrate their trades with the strongest banks backed by their governments. “In the darkest days of the financial crisis, did anyone really believe that the Swiss government would stand behind the prime brokerages of Credit Suisse and UBS to bail out a bunch of foreign hedge funds?” says one hedgie. “Or the French, for that matter?”
Another reason for universal banks’ new pre-eminence is that as big multinational companies have become ever more global, they have become more reliant on very large banks to help them manage cash and payments across many countries. At the same time, regulations such as Basel 3 are increasing the cost to banks of supplying trade finance and derivatives used for hedging. By getting many of these services from a single bank, companies can improve their liquidity by sweeping cash from foreign operations. “Companies are looking for simplicity,” says James Cowles, Citi’s head of Europe, Middle East and Africa. “Global banks are able to knit the world together for their clients.”
Before the crisis this sort of banking, known as global transaction banking or transaction services, was looked down on by most investment banks and their managers, most of whom had built their careers on the hectic trading floors. “When I joined this business we were seen as second-rate bankers by the rest of the bank,” says the head of transaction banking at one large bank. “They thought of us like plumbers,” says another.
Now the plumbers are getting their revenge, with transaction banking seen as offering exciting growth prospects, good returns on equity and stable revenues. Total revenues in this business are probably worth about $200 billion a year, not much less than for investment banking and trading, though far more fragmented. They are also growing steadily. BCG forecasts that by 2020 revenues from global transaction banking will exceed $350 billion a year. More important than the size of the market, says Stefan Dab, a consultant at BCG, is that the business is “sticky”. Big customers usually integrate their own accounting and payment systems with those of the bank, which makes them hesitant to switch. The stickier the business, the more opportunities the bank has to try to cross-sell more profitable business such as derivatives or bond issues. “Transaction banking is in the middle of a decade of love,” says Satvinder Singh, the head of Deutsche Bank’s trust and securities services business, part of its global transaction bank.
Unusually, pay for senior transaction bankers is also rising, whereas in most other areas of banking both pay and other costs are being cut at an unprecedented pace.
【565 WORDS】
Source: The Economist
http://www.economist.com/news/special-report/21577185-investment-banking-increasingly-becoming-game-winner-takes-all-we-happy-few
附：原文图表
OPTION B:
Market efficiency, long-term returns, and behavioral finance
Eugene F. Fama
Graduate School of Business, University of Chicago, Chicago, IL 60637, USA Received 17 March 1997; received in revised form 3 October 1997
Introduction
Event studies, introduced by Fama et al. (1969), produce useful evidence on how stock prices respond to information. Many studies focus on returns in a short window (a few days) around a cleanly dated event. An advantage of this approach is that because daily expected returns are close to zero, the model for expected returns does not have a big effect on inferences about abnormal returns.
The assumption in studies that focus on short return windows is that any lag in the response of prices to an event is short-lived. There is a developing literature that challenges this assumption, arguing instead that stock prices adjust slowly to information, so one must examine returns over long horizons to get a full view of market inefficiency.
If one accepts their stated conclusions, many of the recent studies on longterm returns suggest market inefficiency, specifically, long-term underreaction or overreaction to information. It is time, however, to ask whether this literature, viewed as a whole, suggests that efficiency should be discarded. My answer is a solid no, for two reasons.
First, an efficient market generates categories of events that individually suggest that prices over-react to information. But in an efficient market, apparent underreaction will be about as frequent as overreaction. If anomalies split randomly between underreaction and overreaction, they are consistent with market efficiency. We shall see that a roughly even split between apparent overreaction and underreaction is a good description of the menu of existing anomalies.
Second, and more important, if the long-term return anomalies are so large they cannot be attributed to chance, then an even split between over- and underreaction is a pyrrhic victory for market efficiency. We shall find, however, that the long-term return anomalies are sensitive to methodology. They tend to become marginal or disappear when exposed to different models for expected (normal) returns or when different statistical approaches are used to measure them. Thus, even viewed one-by-one, most long-term return anomalies can reasonably be attributed to chance.
A problem in developing an overall perspective on long-term return studies is that they rarely test a specific alternative to market efficiency. Instead, the alternative hypothesis is vague, market inefficiency. This is unacceptable. Like all models, market efficiency (the hypothesis that prices fully reflect available information) is a faulty description of price formation. Following the standard scientific rule, however, market efficiency can only be replaced by a better specific model of price formation, itself potentially rejectable by empirical tests.
Any alternative model has a daunting task. It must specify biases in information processing that cause the same investors to under-react to some types of events and over-react to others. The alternative must also explain the range of observed results better than the simple market efficiency story; that is, the expected value of abnormal returns is zero, but chance generates deviations from zero (anomalies) in both directions.
Since the anomalies literature has not settled on a specific alternative to market efficiency, to get the ball rolling, I assume reasonable alternatives must choose between overreaction or underreaction. Using this perspective, Section 2 reviews existing studies, without questioning their inferences. My conclusion is that, viewed as a whole, the long-term return literature does not identify overreaction or underreaction as the dominant phenomenon. The random split predicted by market efficiency holds up rather well.
Two recent papers, Barberis et al. (1998) and Daniel et al. (1997), present behavioral models that accommodate overreaction and underreaction. To their credit, these models present rejectable hypotheses. Section 3 argues that, not surprisingly, the two behavioral models work well on the anomalies they are designed to explain. Other anomalies are, however, embarrassing. The problem is that both models predict post-event return reversals in response to long-term pre-event abnormal returns. In fact, post-event return continuation is about as frequent as reversal — a result that is more consistent with market efficiency than with the two behavioral models.
Section 4 examines the problems in drawing inferences about long-term returns. Foremost is an unavoidable bad-model problem. Market efficiency must be tested jointly with a model for expected (normal) returns, and all models show problems describing average returns. The bad-model problem is ubiquitous, but it is more serious in long-term returns. The reason is that bad-model errors in expected returns grow faster with the return horizon than the volatility of returns. Section 4 also argues that theoretical and statistical considerations alike suggest that formal inferences about long-term returns should be based on averages or sums of short-term abnormal returns (AARs or CARs) rather than the currently popular buy-and-hold abnormal returns (BHARs).
In categorizing studies on long-term returns, Sections 2 and 3 do not question their inferences. Dissection of individual studies takes place in Section 5. The bottom line is that the evidence against market efficiency from the long-term return studies is fragile. Reasonable changes in the approach used to measure abnormal returns typically suggest that apparent anomalies are methodological illusions.
【OBSTABLE OPTION B ENDS – 815 WORDS】
又完成了一天的悦读有木有！来，让我们奖励自己一个猴头！
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发表于 2013-5-17 15:23:09
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