S&T interview: industry outlook question

Interested as well.

Depends on the desk. Lots of different ways to approach this

Maybe this is too general but I would say the economy. Future regulation as well the performance of specific markets will all depend on the economy. I would do some reading on how economies in our position have performed in the past and then explain how a future bull market in the next 1-2 years would affect the industry and how a bear market in the next 1-2 years would affect the industry.

Of course most people agree our economy is just going to stagnate for the next few years, so maybe just surviving and having the wisdom to initiate policies of avoiding moral hazards. That would have a long-term affect of restoring credibility to the financial industry.

I think you could also mention that the equity markets will start to substantially pick up as more investors drop their fixed income and enter the stock market. I read an article in the WSJ that noted that the last few weeks was one of the biggest ever as investors put their money back into mutual funds and ETFs. The bond rally is over, now it's time to start making some real money.

For equities, I would say not regulation but rather the fact that people just arent invested.

Take your pick from the 3...

1/ Regulations (obvi) 2/ Politics (in the past couple years all markets have been much more macro driven due to headline risk) 3/ Technology (more algo, more HFT, obvi) leading to much more efficiency in many markets (esp derivs because cash equities & FX is already very efficient), hence leading to less "edge" to be found (edge = how much less/more you can buy/sell something for than its theoretical value).

Honestly seeing how a lot of options market makers operate and try to arbitrage the market, I don't see how they could survive after the next 5 years. I'd say technology personally if you could only list one.