
T. Rowe Price Voted for the Dell Buyout by Accident - evanpw
http://www.bloomberg.com/view/articles/2016-05-13/t-rowe-price-voted-for-the-dell-buyout-by-accident
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eganist
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
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
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
How is this the government's fault? Mostly this seems to be awkward financial
machinery built by the industry.

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hendzen
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
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
_> 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.

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toyg
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.

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bsimpson
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.

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dmoy
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.

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someguydave
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.

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cam_l
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..

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rayiner
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
>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?

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walterbell
Imagine Matt Levine writing a story on your favorite heisenbug.

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B1FF_PSUVM
> 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.)

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

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jlj
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?

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simoncion
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).

~~~
shuzchen
So what I imagine when we talk about a single database is just some mapping of
stock shares to owner. So to keep track of who owns what share, when some
shares gets transferred you just update each row accordingly. (Imagine a stock
with 10 total shares and X sells to Y shares #1, #2, #3, you'd just update the
table and set owner=Y where share id is in (1, 2, 3))

But for such important financial data you don't want to just update your table
and throw away your history. You'd like to also keep a record of what changes
occurred. Maybe you'd like to audit your database, and find out the path of
ownership from which a current owner obtained their shares. Maybe you'd like
to make your history immutable, so as to not have headaches later on trying to
validate the current state, or to discourage tampering with the database.

So now you have a datastore where the current state relies on an ever-growing
stack of immutable changesets. This sounds exactly like what we talk about
when we talk about blockchains. There are people who define a blockchain more
strictly (e.g, The Blockchain(TM) with decentralization and crypto), but I
think the author was going for the former meaning.

That is to say, you can implement a blockchain and still be using a single
well-designed and well thought-out database.

~~~
simoncion
> So what I imagine when we talk about a single database is just some mapping
> of stock shares to owner.

Mmhmm. Keep simple things as simple as possible.

> So now you have a datastore where the current state relies on an ever-
> growing stack of immutable changesets. This sounds exactly like what we talk
> about when we talk about blockchains.

Well, if _that 's_ what a "blockchain" is, then git [0] was doing blockchains
_way_ before they were cool.

> There are people who define a blockchain more strictly (e.g, The
> Blockchain(TM) with decentralization and crypto)

I can see not having a distributed ledger, but if you eject the cryptographic
part of it then you don't get any of the tamper resistance. Without that, all
you have is a linked list. And -as we all know- "linked list" is a much less
sexy phrase than "blockchain".

[0] And -if we drop the cryptographically verifiable history part- pretty much
_every_ VCS _ever_.

