New York Stock Exchange
It didn't take long for mainstream economists to provide us with some inane commentary regarding the latest natural catastrophe. Allegedly, the massive destruction of wealth hurricane 'Sandy' will leave behind has a 'silver lining'. We believe the main reason behind this stance is the unquestioned acceptance of one of Keynes' great fallacies: namely the idea that all economic activity – even unproductive activity – is somehow 'good'. Naturally, if it were really true that we could create economic progress by breaking windows or digging ditches (we will admit that pyramids at least render what one might term 'monument services', even if the expense seems hardly justified by this), then the government should pay half the population for digging ditches and hire the other half to wreak wanton destruction. The loss of wealth the hurricane has inflicted is very real; the wealth destroyed by it is most definitely gone.
UPDATE: *CBOE TO CLOSE EXCHANGES OCT. 29 BECAUSE OF HURRICANE SANDY
Late Updates - after a day of consultation and realization that if the algos were left alone to play then things could go a little pear-shaped - NYSE and NASDAQ will now be totally closed tomorrow:
*U.S. EQUITY MARKETS TO CLOSE ON OCT. 29 FOR STORM, SEC SAYS
The NYSE has just released a statement clarifying its hours tomorrow - due to the storm:
*NYSE TRADING FLOOR TO CLOSE TOMORROW; ALL TRADING TO BE ON ARCA
So, hold tight as all those low-lying humans will have left the building in the calm thoughtful hands of Johnny-5 and his friends.
- China May Forgo Easing as Economy Rebounds, Survey Shows (Bloomberg)... or as food and house inflation has never gone away
- China Edges Out U.S. as Top Foreign-Investment Draw Amid World Decline (WSJ)
- Fed to keep buying bonds despite firmer U.S. growth (Reuters)
- Bernanke Seen Attacking Jobless Rate With QE Until His Term Ends (Bloomberg)
- Mortgage applications plunge 12%, down for third week in a row (Dow Jones)
- Exchanges Retreat on Trading Tools - Fund Managers, Regulators Say Certain Orders Are Risky, Aid High-Speed Firms (WSJ)
- Europe Bank Chief to Defend Bond-Buying Plan (WSJ)
- Japan, China Envoys Met Last Week for Talks on Island Feud (Bloomberg)
- Goldman’s Pill Says ‘Guerrilla’ ECB to Impose Losses on Skeptics (BBG)
- Chance rise of an Obama defeat (FT)
- King Says BOE Is Ready to Add to QE If U.K. Recovery Fades (Bloomberg)
- Rajoy Sees Case for Slowing Spain’s Austerity as Economy Shrinks (BusinessWeek)
- Hong Kong Intervenes to Defend Peg as Upper Limit Tested (Bloomberg)
Full FBI Statement On Arrest Of Fed-a-Bomber Suspect Quazi Nafis, Who Worked "On Behalf Of al Qaeda"Submitted by Tyler Durden on 10/17/2012 16:22 -0400
Quazi Mohammad Rezwanul Ahsan Nafis (Nafis), 21, was arrested this morning in downtown Manhattan after he allegedly attempted to detonate what he believed to be a 1,000-pound bomb at the New York Federal Reserve Bank on Liberty Street in lower Manhattan’s financial district. The defendant faces charges of attempting to use a weapon of mass destruction and attempting to provide material support to al Qaeda. The arrest of Nafis was the culmination of an undercover operation during which he was closely monitored by the FBI New York Field Office’s Joint Terrorism Task Force (JTTF). The explosives that he allegedly sought and attempted to use had been rendered inoperable by law enforcement and posed no threat to the public. The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Lisa Monaco, Assistant Attorney General for National Security; Mary E. Galligan, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Raymond W. Kelly, Commissioner, New York City Police Department (NYPD).
Update: we now have the suspect's name: Quazi Mohammad Rezwanul Ahsan Nafis, who in addition to Plan A had Plan B: "If Nafis felt his attack was about to be thwarted by cops, he would invoke the back-up plan, which involved a suicide bombing operation"
NBC 4 New York has learned that federal authorities have arrested a man they say was plotting to attack the Federal Reserve in New York City. The man is in custody in New York. Sources tell NBC 4 New York that he lives on Long Island. Law enforcement officials stress that the plot was a sting operation monitored by the FBI and NYPD and the public was never at risk. "According to the report, the suspect drove a van he believed to be loaded with explosives from Long Island to Lower Manhattan. He then placed the van near the Federal Reserve and was then arrested by the FBI and NYPD. The suspect, whom sources said is from the Jamaica Queens section of New York City, is currently in custody in New York. Sources say he was acting alone." And "New York terror suspect is a 21-year-old Bangladeshi citizen who traveled to the U.S. in January to carry out terror attack." At least all that tungsten gold lying on the Manhattan bedrock is safe and sound and John McClane will not be called out of retirement just yet.
A rare glimpse inside "probably the world's biggest" 'market-maker' GETCO as it provides estimates of over 20% of 'liquidity' to the daly trading volume on US stocks. Meet the people that stand ready to feed the machines (oh wait) that stand ready at all times (except when most needed) to bid or ask...
Chinese local governments are facing the prospect of major unemployment problems should the swathe of solar panel makers, that have been subsidized from birth to now-near-death, continue to suffer from US and European tariffs (as well as simple gross mis-allocation of capital amid massive over-capacity). However, as is the way of the mal-investing world today, no barrier to rational economic theory is too low for government status-quo maintenance as it would appear that local banks have been strong-armed into extending loans to keep them alive. As Reuters reports, debt-laden (NYSE-traded) SunTech Power Holdings - which is close to removal from the exchange due to its dismal equity price - has just received new 'bailout' loans. First, it was a race to debase. Now, we have the race to bailout the world's most worthless companies (especially in channel-stuffed industries) as the New Normal trade wars continue.
With tomorrow's CDS roll (when indices change composition and on-the-run maturities are extended) and Friday's major equity option expiration and S&P index reweightings, it would appear, as UBS' Art Cashin notes, that the action of the last few days (and even last week) will be largely driven by the creation of complex strategies to "milk out every ounce of profit that might be available in such huge [technical] shifts." Combine this technical factor with the Autumnal Equinox, of W.D.Gann infamy, and the stage is set for fireworks as we approach Friday.
I just finished reading Octopus by Guy Lawson, and it's one of those that fit the "I Couldn't Put It Down" category, much like Den of Thieves, published in 1992. It is the tale of Sam Israel, whom you may remember in 2006 was on the lam from his failed hedge fund/Ponzi scheme. He faked his suicide, was captured, and is now hanging out for the next couple of decades (with none other than Bernie Madoff) in a state prison named, of all things, Valhalla.
- What's wrong with this headline: Obama authorizes secret support for Syrian rebels (Reuters)
- Hilsenrath promptly dusts off ashes of sheer propaganda failure, tries again: Fed Gives Stronger Signals of Action (WSJ)
- Fed Hints at Fresh Action on Economy (FT)
- Fed Poised to Step Up Stimulus Unless Economy Strengthens (Bloomberg)
- IMF Chief Lagarde Praises Greece, Spain for Efforts (Bloomberg) - efforts to beg as loud as possible?
- US sanctions against bank 'target' China (China Daily)
- Trimming China's Financial Hedges (WSJ)
- ganda central bank cuts key lending rate to 17 pct (Reuters)
- Greece Agrees €11.5bn Spending Cuts (FT) - Agrees? Or does what a good debt slave is told to do
- Germany Retains Stable AAA Outlook at S&P After Moody’s Cut (Bloomberg)
- Spain’s Bond Auction Beats Target as Borrowing Costs Rise (Bloomberg)
For all the drama surrounding Wall Street bonuses in a year in which Wall Street profitability was cut in half to just $13.5 billion, the worst since the collapse and bailout of 2008 and 2009 (and compared to $27.6 billion in 2010 and $61.4 billion in 2009), one would think that the average banker would see zero bonus in 2011, or in some cases, especially if they worked at a Greek bank, be told to pay for the privilege of working. The truth is that according to official data from the NY City Comptroller, the average bonus dipped by just 13% in 2011, declining modestly from $138,940 to $121.150. In fact, while a number of large firms announced reductions in cash bonuses for 2011 (with several firms reporting reductions in the range of 20 to 30 percent), personal income tax collections indicate a smaller decline in the overall cash bonus pool. A big reason for this is deferred bonuses from prior years hitting this year's payroll and thus smoothing the impact. Still, bankers being forward looking people, are looking forward and probably not liking what they see. Yet while 2011 data for comprehensive pay is still not available, in 2010 the average salary rose by 16% to $361,180 as more firms shifted to a base-heavy comp structure. Indicatively, the average Wall Street salary is 5.5 times higher than the rest of the private sector at $66,100. And no matter how one feels about them, one thing is true: the New York economy would founder without taxes paid by bankers: "the securities industry in New York City accounted for 23.5 percent of all wages paid in the private sector despite accounting for only 5.3 percent of all private sector jobs" and more importantly, "each job created (or lost) in the securities industry leads to the creation (or loss) of almost two additional jobs in other industries in the City. OSC also estimates that each new Wall Street job creates one additional job elsewhere in New York State, mostly in the City’s suburbs." Hence - Wall Street's bonuses have become "Too Big Too Fall", as the entire economy of NY City and the state is now held captive by Wall Street's exorbitant bonuses.
Just as market regulators were finally getting wise to the fact that they have no clue how how modern market works, what modern market topology is, or how High Frequency Trading impacts the stock market (think Flash Crash), here comes Certichron, the supplier of a time service center at a Savvis market center in Weehakwen, which says it has now mastered sub-nanosecond readouts which are now "compliant with the FINRA Order Audit Trail System and is likely to be compliant with any Consolidated Audit Trail that might be specified by the Securities and Exchange Commission." In other words, here come sub-nanosecond markets.
The Chairman of the Fermentation Committee takes the fizz out of the market once again.