7 ms·

T. Rowe Price Voted for the Dell Buyout by Accident

166 points by evanpw 10y ago

walterbell 10y ago
Imagine Matt Levine writing a story on your favorite heisenbug.
toyg 10y ago
TL; DR: share management is built on a pile of electronic and legal hacks implemented over several decades. One layer misfired, and people (think they) lost money. Maybe we should rebuild it all but it's such a huge clusterfuck and involves so many entities, it will probably never happen.
- zaroth 10y ago
  But usually it is more complicated than that.
  - foobarian 10y ago
    Sounds like the 20 year old codebase at our $company.
    - deleted 10y ago
      [deleted]
- bsimpson 10y ago
  If Intuit is influential enough to suppress income tax reform, I have no doubt that the cacophony of financial institutions involved will do whatever it takes to ensure they can continue skimming their margins off the tops of their pieces of the machine.
  - deleted 10y ago
    [deleted]
  - dmoy 10y ago
    Intuit is just kinda helping along a system that's already built up to allow politicians to give tax breaks and incentives for political reasons instead of just simply generating revenue.
Overtonwindow 10y ago
That was an extremely entertaining and fascinating article on an extremely complex topic. Thank you!!
eganist 10y ago
I've genuinely never learned so much about a topic from an article that so blatantly buried the lede. I'm actually more intrigued by the emergent complexity in highly regulated systems thanks to the build-up. It's fascinating seeing the layers of abstraction in stock ownership, to the point where I'm wondering if it's all ripe for disruption.
- roymurdock 10y ago
  The complexity is a feature that allows investors to play fun games with each other. Let's not take that away from the investing world.
  - akshatpradhan 10y ago
    Why does the Government place so many layers of regulation just to vote? Don't shareholders want it made easy for them vote on the future of the company?
    - dpark 10y ago
      How is this the government's fault? Mostly this seems to be awkward financial machinery built by the industry.
    - rtpg 10y ago
      The main problem is that technically, the DTC owns all the shares. So there needs to be a system in place so the DTC knows how to vote for the 'for practical purposes' shareholders It's kind of like when you sublet your apartment . you're renting the place, but you are also renting it out, so who is the renter? The simplest idea is that those who hold shares should vote. But that idea leads to the DTC casting all votes.
- nefitty 10y ago
  Capital flight in the tech sector is imminent once again. If the finance sector has a leverage point it's capital. I guess someone could try to distrupt a part of the industry, but I don't see how they would avoid the inevitability of being acquired.
someguydave 10y ago
I disagree with the premise of the article. I don't think that the proxy voting system and share ownership is opaque because it is boring - it is opaque because that is precisely in the mutual interest of all the middlemen you deal with to buy and sell and hold stock.
- cam_l 10y ago
  I see, and make, this argument often in relation to a lot of things.. with one caveat, which I think is important. The 'because' in "it is opaque 'because' it is in the interest of.." does not have to be a causal because, or even an intentional 'because'. Most conspiracies I have known and loathed are, for better or worse, simply emergent. Each party can be relied on to play their part in conspiracy because playing their part is how the conspiracy came to be. As I said, I think this is an important distinction. Not least as the hangup most people have about believing in such complex and wrong behaviour, is that so many people can be so smart and organised and so intentionally evil. But it is a real eye opener when you realise these things can function without organisation or intent..
  - rayiner 10y ago
    Software engineers work in a field where accreted complexity exists at every turn. Windows has 20-years of bug-for-bug compatibility because of the pressures of hundreds of millions of people relying on it every day. And it's also a field where the dangers of rerwrites are well known and appreciated. So why is it that many engineers are so ready to see complexity as the product of conspiracy, rather than organic evolution, in every other field?
    - someguydave 10y ago
      >So why is it that many engineers are so ready to see complexity as the product of conspiracy, rather than organic evolution, in every other field? So you are saying that separating voting rights of millions of shareholders and granting them to the hands of a few elites at banks is just a total evolutionary accident? I don't recall getting the option to restore the voting rights of the shares in my index funds - and nobody appears to offer it?
hendzen 10y ago
If you liked this, you should subscribe to Matt Levine's daily newsletter: Money Stuff. Reading it is the highlight of my morning commute: http://www.bloomberg.com/view/topics/money-stuff http://www.bloomberg.com/view/topics/money-stuff
- rtpg 10y ago
  Second that recommendation. There's a lot of stuff to check out but even just flipping through his analysis is really informative. If you're interested in financial shenanigans (or bond market liquidiry) this is the thing to read. His writing is a national treasure (well for financial news anyways) I don't think he 100% gets the technicalities of bitcoin though, but hey even bitcoiners don't get that...
  - jackgavigan 10y ago
    > I don't think he 100% gets the technicalities of bitcoin though, but hey even bitcoiners don't get that... Whether or not he gets the technicalities, what he writes about bitcoin and blockchain makes far more sense than 99.9% of what's written on the topic.
  - RUBwkVjwLsDKgPw 10y ago
    He's one of the few people in the world with a more nuanced understanding of blockchains than either "it will male bankers obsolete" or "it's useless nerd money", and that writes about it publicly.
- dudus 10y ago
  How does one subscribe to this column? Do you use RSS or do you get this as an email on your inbox? I noticed it has a feed icon next to the <h1> of the page but clicking it leads me to a 404. Perhaps you can share an rss link that works.
  - rtpg 10y ago
    If you scroll down to the bottom of one of his money stuff articles there's a CTA (email signup form). I also noticed the busted RSS recently on Bloomberg. Don't know what's up
jlj 10y ago
As the author mentioned, shareholder voting is ripe for disruption with a blockchain based system. What is the market size at stake for the middle-man companies?
- simoncion 10y ago
  The author also mentioned -you know- building a solution on 1980's-era tech, namely a single database of actual (rather than proxy) shareholders and contact information/voting instructions/other useful info: "You could just, you know, build a big database of who owns shares, and transfer shares on that database, and not rely on a system in which people own shares in brokers' databases and brokers own shares in DTC's database and DTC owns shares in companies' (transfer agents') databases. The big database could send out voting instructions directly to the shareholders, cutting back on the outsourcing. You could build a new system, from the ground up, corresponding to the actual practices of finance rather than to the archaisms that they're built on." [0] No need to go all blockchain and shit, just consolidate the mess of systems into a single well-designed and well thought-out one. [0] That 'graph is -incidentally- the 'graph that immediately precedes the one that mentions The Blockchain(TM).
  - ajdlinux 10y ago
    In countries that aren't the US, things tend to be somewhat closer to this situation... Here in Australia, for example we've basically completely abolished stock certificates for publicly traded companies, and we don't have any equivalent of DTC as far as I am aware. Nominee holdings still exist, but it's significantly less common than in the US, and it's significantly more common for shareholders to be directly registered. http://www.computershare.com/News/TransparencyofShareOwnershipShareholderCommunicationsandVotinginglobalcapitalmarkets_12032014.pdf http://www.computershare.com/News/TransparencyofShareOwnersh... is an interesting read.
    - kasey_junk 10y ago
      When reading that, it's important to recognize it was compiled by Computershare, a transfer agent, who in some ways compete with DTC. Computershare has virtual monopolies in that business globally. I don't think they are wrong, but they aren't a disinterested party.
B1FF_PSUVM 10y ago
> But usually it is more complicated than that. [...] > But usually it is more complicated than that. [...] > But usually it is more complicated than that. [...] > But usually it is more complicated than that. [...] Nice rhetoric there. (Advanced capitalism: it is complicated, it is.)

166 points by evanpw 10y ago

Imagine Matt Levine writing a story on your favorite heisenbug.

toyg 10y ago

TL; DR: share management is built on a pile of electronic and legal hacks implemented over several decades. One layer misfired, and people (think they) lost money. Maybe we should rebuild it all but it's such a huge clusterfuck and involves so many entities, it will probably never happen.

zaroth 10y ago
But usually it is more complicated than that.
- foobarian 10y ago
  Sounds like the 20 year old codebase at our $company.
  - deleted 10y ago
    [deleted]
bsimpson 10y ago
If Intuit is influential enough to suppress income tax reform, I have no doubt that the cacophony of financial institutions involved will do whatever it takes to ensure they can continue skimming their margins off the tops of their pieces of the machine.
- deleted 10y ago
  [deleted]
- dmoy 10y ago
  Intuit is just kinda helping along a system that's already built up to allow politicians to give tax breaks and incentives for political reasons instead of just simply generating revenue.

Overtonwindow 10y ago

That was an extremely entertaining and fascinating article on an extremely complex topic. Thank you!!

eganist 10y ago

I've genuinely never learned so much about a topic from an article that so blatantly buried the lede. I'm actually more intrigued by the emergent complexity in highly regulated systems thanks to the build-up. It's fascinating seeing the layers of abstraction in stock ownership, to the point where I'm wondering if it's all ripe for disruption.

roymurdock 10y ago
The complexity is a feature that allows investors to play fun games with each other. Let's not take that away from the investing world.
- akshatpradhan 10y ago
  Why does the Government place so many layers of regulation just to vote? Don't shareholders want it made easy for them vote on the future of the company?
  - dpark 10y ago
    How is this the government's fault? Mostly this seems to be awkward financial machinery built by the industry.
  - rtpg 10y ago
    The main problem is that technically, the DTC owns all the shares. So there needs to be a system in place so the DTC knows how to vote for the 'for practical purposes' shareholders It's kind of like when you sublet your apartment . you're renting the place, but you are also renting it out, so who is the renter? The simplest idea is that those who hold shares should vote. But that idea leads to the DTC casting all votes.
nefitty 10y ago
Capital flight in the tech sector is imminent once again. If the finance sector has a leverage point it's capital. I guess someone could try to distrupt a part of the industry, but I don't see how they would avoid the inevitability of being acquired.

someguydave 10y ago

I disagree with the premise of the article. I don't think that the proxy voting system and share ownership is opaque because it is boring - it is opaque because that is precisely in the mutual interest of all the middlemen you deal with to buy and sell and hold stock.

cam_l 10y ago
I see, and make, this argument often in relation to a lot of things.. with one caveat, which I think is important. The 'because' in "it is opaque 'because' it is in the interest of.." does not have to be a causal because, or even an intentional 'because'. Most conspiracies I have known and loathed are, for better or worse, simply emergent. Each party can be relied on to play their part in conspiracy because playing their part is how the conspiracy came to be. As I said, I think this is an important distinction. Not least as the hangup most people have about believing in such complex and wrong behaviour, is that so many people can be so smart and organised and so intentionally evil. But it is a real eye opener when you realise these things can function without organisation or intent..
- rayiner 10y ago
  Software engineers work in a field where accreted complexity exists at every turn. Windows has 20-years of bug-for-bug compatibility because of the pressures of hundreds of millions of people relying on it every day. And it's also a field where the dangers of rerwrites are well known and appreciated. So why is it that many engineers are so ready to see complexity as the product of conspiracy, rather than organic evolution, in every other field?
  - someguydave 10y ago
    >So why is it that many engineers are so ready to see complexity as the product of conspiracy, rather than organic evolution, in every other field? So you are saying that separating voting rights of millions of shareholders and granting them to the hands of a few elites at banks is just a total evolutionary accident? I don't recall getting the option to restore the voting rights of the shares in my index funds - and nobody appears to offer it?

hendzen 10y ago

If you liked this, you should subscribe to Matt Levine's daily newsletter: Money Stuff. Reading it is the highlight of my morning commute: http://www.bloomberg.com/view/topics/money-stuff http://www.bloomberg.com/view/topics/money-stuff

rtpg 10y ago
Second that recommendation. There's a lot of stuff to check out but even just flipping through his analysis is really informative. If you're interested in financial shenanigans (or bond market liquidiry) this is the thing to read. His writing is a national treasure (well for financial news anyways) I don't think he 100% gets the technicalities of bitcoin though, but hey even bitcoiners don't get that...
- jackgavigan 10y ago
  > I don't think he 100% gets the technicalities of bitcoin though, but hey even bitcoiners don't get that... Whether or not he gets the technicalities, what he writes about bitcoin and blockchain makes far more sense than 99.9% of what's written on the topic.
- RUBwkVjwLsDKgPw 10y ago
  He's one of the few people in the world with a more nuanced understanding of blockchains than either "it will male bankers obsolete" or "it's useless nerd money", and that writes about it publicly.
dudus 10y ago
How does one subscribe to this column? Do you use RSS or do you get this as an email on your inbox? I noticed it has a feed icon next to the <h1> of the page but clicking it leads me to a 404. Perhaps you can share an rss link that works.
- rtpg 10y ago
  If you scroll down to the bottom of one of his money stuff articles there's a CTA (email signup form). I also noticed the busted RSS recently on Bloomberg. Don't know what's up

jlj 10y ago

As the author mentioned, shareholder voting is ripe for disruption with a blockchain based system. What is the market size at stake for the middle-man companies?

simoncion 10y ago
The author also mentioned -you know- building a solution on 1980's-era tech, namely a single database of actual (rather than proxy) shareholders and contact information/voting instructions/other useful info: "You could just, you know, build a big database of who owns shares, and transfer shares on that database, and not rely on a system in which people own shares in brokers' databases and brokers own shares in DTC's database and DTC owns shares in companies' (transfer agents') databases. The big database could send out voting instructions directly to the shareholders, cutting back on the outsourcing. You could build a new system, from the ground up, corresponding to the actual practices of finance rather than to the archaisms that they're built on." [0] No need to go all blockchain and shit, just consolidate the mess of systems into a single well-designed and well thought-out one. [0] That 'graph is -incidentally- the 'graph that immediately precedes the one that mentions The Blockchain(TM).
- ajdlinux 10y ago
  In countries that aren't the US, things tend to be somewhat closer to this situation... Here in Australia, for example we've basically completely abolished stock certificates for publicly traded companies, and we don't have any equivalent of DTC as far as I am aware. Nominee holdings still exist, but it's significantly less common than in the US, and it's significantly more common for shareholders to be directly registered. http://www.computershare.com/News/TransparencyofShareOwnershipShareholderCommunicationsandVotinginglobalcapitalmarkets_12032014.pdf http://www.computershare.com/News/TransparencyofShareOwnersh... is an interesting read.
  - kasey_junk 10y ago
    When reading that, it's important to recognize it was compiled by Computershare, a transfer agent, who in some ways compete with DTC. Computershare has virtual monopolies in that business globally. I don't think they are wrong, but they aren't a disinterested party.

B1FF_PSUVM 10y ago

> But usually it is more complicated than that. [...] > But usually it is more complicated than that. [...] > But usually it is more complicated than that. [...] > But usually it is more complicated than that. [...] Nice rhetoric there. (Advanced capitalism: it is complicated, it is.)