60% is your new "Black Swan!"

Isn't that special!!
 
Today the NASDAQ said that trades that fell 60% away up or down were "fat finger" trades and had to be cancelled.

Why?

Did the HFT traders make too much money? Let's go over NASDAQ's previous policy--and here it is--what trade is clearly erroneous:

For executions over $1.75, and up to $25, Nasdaq will bust or adjust if that trade price is 10 percent away from the NBBO. For executions over $25, but less than $50, Nasdaq will bust or adjust if that trade price is 5 percent away from the NBBO. For executions over $50, Nasdaq will only bust or adjust if the trade price is 3 percent away from the NBBO.

Today it is now 60%!

60%!

So that will really help Wall Street's confidence! The ruling:

"There is no indication at this time that a Nasdaq market participant experienced a technological failure in connection with this event," said the company in a notice. "There is also no indication that any member firm had a trade error on any NASDAQ OMX system."

(So stocks of $30 billion dollar companies are supposed to trade at two cents or a penny!)

Initial plans called for exchanges to void trades taking place in that period of time at prices more than 30% below or above the pre-2:40 p.m. time period, according to a person briefed on the discussions. This was later amended to the 60% level. A full list of the affected securities can be found at:
http://www.nasdaqtrader.com/TraderNews.aspx?id=ETA2010-30

So if I'm a HFT programmer, just do the same game again, but stop the game at 55%. Take all the stops out, and then take all the stock that the algos brring with it.

Hell, Mary Schapiro,(sorry it's a pre-botox picture) the math wiz and rocket scientist of the SEC, (and those terms are used loosely) will use her august powers to look into it, and she will surely understand high frequency trading, and then, she'll calmly talk from her prepared script, saying that this issue needs to be looked at, and then, like a Madoff tip, it will be put in the closet, and never looked at, so she can remain as Bernie said "a dear friend" of Wall Street and be just another lackey that Wall Street can push around, because everyone knows she doesn't have any balls!

So everybody will know tomorrow's script. Wall Street will buy stocks on the unemployment numbers, and push things up so this looks like a distant memory, and then, the computers will attack again, because they know they have 60% margin to f*ck with the orders and stops left on the screens, even though there isn't any left after today!
And that pullback, will be it.

Because every one with stops was already taken out!

But you were protected only if you lost more than 60%!

With Wall Street math, sanctioned by the regulators!

Got stopped out on your Russell ETF's? You are screwed!

The Nasdaq, in their benevolent wisdom, said that any trade outside the 60% threshold between 2:40 and 3:00 would be cancelled. So what if you had an ETF that you were stopped out of? You got screwed.

Here's the iShares on the Russell Midcap index. IWR. Anyone who sold at a price above $34.52--that trade stands.

How about the Russell 2000 Value Index? IWN Anyone who sold, or was stopped out by the HFT traders at a price above $25.08--that trade stands.

How's that for value added?

And how about the iShares Dow Jones Consumer index? If you made any sale less than $95.69--well that sale stands! You could make 50% on a stock that melted up, and you get to keep that profit!

Isn't that amazing? ETF's which are supposed to be much safer than individual stocks, and whose price, is supposedly linked to the index and thousands of stocks--well you got screwed, or you got paid--while they got paid or screwed. On ETF's!

There was no differentiation, in the eyes of the NASDAQ or the NYSE between ETFs and individual stocks.

Welcome to Wall Street!

HFT style!

Which promised more liquidity and tighter spreads because of  the computers.

And now, you are left with nothing!

The Smithtown Messenger apologizes

They had some before and after pictures of the Presidents, and apparently, some folks got offended that Bo and Michelle were portrayed as Fred Stanford and his aunt Esther. (below bottom right)

Suspicious package found by TSA

A TSA worker in Miami was arrested for aggravated battery after police say he attacked a colleague who'd made fun of his small genitalia after he walked through one of the new high-tech security scanners during a recent training session.

Rolando Negrin, 44, was busted for assault after things got ugly at Miami International Airport between Negrin and some of his fellow Transportation Security Administration workers on Tuesday.

Sources say Negrin stepped into the machine during the training session and became embarrassed and angry when a supervisor started cracking jokes about his manhood, made visible by the new machine.

High Frequency Traders stopped trading during market route

Wait--Weren't these folks liquidity providers?  So now,  these liquidity providers, they said they turned off their rmachines when the market route got going.
WSJ
A number of high-frequency firms stopped trading Thursday in the midst of the market plunge, possibly adding to the market's unprecedented selloff. 

Tradebot Systems Inc., a large high-frequency firm based in Kansas City, Mo., closed down its computer trading systems when the Dow Jones Industrial Average had dropped about 500 points, said Dave Cummings, founder and chairman of the firm.

So isn't that special. These firms, with their co-locations next to the NYSE servers, and all the technology in the world that money can buy--these firms are now saying they panicked, and they stopped trading.

And because of that, Grandma gets $39 for her $60 PG stock.

The two cents "Fat Finger"

Sam Adams? Boston Beer? Went to a penny?

How about Exelon? The 2009 Utility of the year.$30 billion market cap. It went to zero!

But if you bought the 7,254 shares at .41 cents or the 3,450 shares at .0001 from the HFT, your trade gets busted. On Wall Street, the HFT house always wins!

Accenture I covered. A $26 billion dollar company.

Buy it for two cents.

Did they bet all their money on Tiger's latest tournament when he didn't make the cut? Oh that's right. They already dropped him. It was just the machines with their algorithms!

How about Centerpoint Energy? A utility with a $14 billion enterprise value. Buy it for two cents.

Now let's look at Goldman. Why didn't that number break. Wait--If you trade with Goldman, you don't short it's stock. Does anybody think Goldman needed to make some billions for the historic SEC fine it will soon pay?

Wait--why didn't any of the big banks break during the market route?

Does anybody think that maybe, their prop desks were too busy hitting bids of other stocks??

But don't worry--If the stock moved 60%, up or down, the trade gets busted.

Which is why the trades on Sotheby's won't stand.

Sotheby's Common Stock

Day's Range:27.85 - 100,000.00

That number ran to $100,000!!

From 33!

Hit the Bid!

Booyahh!!! Baby!!!!!

Now that was worthwhile action!! Whoa Nellie!!! Panic by the machines!!! They took out every stop, and then they tried covering what they sold--all on the supposed fat finger!!!

But Wall Street will just tell you they were derisking!

And now Cramer, will preach prudence. Heck in 2008 he panicked the masses. Maybe he'll be able to do it again!!

But really--Come on--today was just like any other day with these dark pool high frequency traders--except today--we saw them, in all their glory!!!

At 888 down, I blew out all my puts--and with the spreads--it was work!! Two minutes later we were down another hundo!!! Booyahhh!!!!

So what does this means? It means we really never had that many natural buyers, and the machines were just kiting stocks from one hand to another.

(But Wall Street has your back. If stocks moved more than 60% up or down, between 2:40 and 3:00, Nasdaq said they will cancel those trades. Now isn't that special??)

And it means, that enough people are on edge that you should get some more wild action tomorrow. But look what happens when Uncle Sam doesn't have Wall Street's back!! Let's see how these folks trade when they don't have any inside information!!

And quite frankly, all these folks whining about chaos out there--Big frickin deal. The love affair of their life, the stock exchange, once again, was proven to be just another mistress, pimping herself to whoever had or needed the most money!!

So what happens now? Just look at the fat finger prices today. Everyone will tell you that those are fantasy prices. Says who? Maybe in ACN or PG they were!

How was that ACN? One cent??? Did someone from Citigroup sell billions in this number by mistake too? Who is kidding who?

Denninger had charts on PG--on when it broke to fantasy prices, and then the Dow.

Wait--Maybe Mary Shapiro fropm the SEC will do something about that? Does anybody want that bet???

The market broke down, because stocks were over-priced, and over-owned, and over-kited.  And now, the folks who were thinking about getting in, won't even think about that again. They'll say the whole game is rigged!

But Wall Street wants you to believe it was just a "fat finger." It wasn't that. It was just the machines going out of control!

Well, the game was rigged. But before, Wall Street was in on it. Now they have to eat their young, because no-one trusts anyone again.

All because of a couple riots in Greece? Because no-one knows their exposure??

Or is it more than that?

Let's hope the machines think it is more than that.

So we can take some more money from them!

The action in Greece starts at 1:00

The bailout of Greece, isn't a bailout of Greece. It's just another bailout of the banks who own their debt.

Protests today start at 1:00 eastern.

What happens in the Florida legislature

And in overseas action, Kim Kardashian, got a plague from Operation Iraqi Freedom.

Kim was in the "thoughts" of our troops!

No word if that comes with a sock or a Kleenex.

"Even Greek journalists were on strike, but they later went back to work in order to cover the riots."

ATHENS (MNI) - A building belonging to Greece's Finance Ministry was set afire Wednesday by rioters protesting the stringent four-year austerity plan the Greek government has agreed to accept in exchange for up to E110 billion in aid from fellow Eurozone countries and the International Monetary Fund.

The Finance Ministry issued a statement Wednesday night saying that no crucial documents had been lost, though the damage to the building was extensive.

Check out Portugal's front page. Does anybody think they are next?

And check out Bill Gross. Does anybody think that Spain will soon follow?

But read his entire missive. Does anybody think Bill Gross is just a wee bit peeved because he didn't recommend stocks at the 666 bottom? Or at 800? Or at 900? Or at 1000? Or at 1100? Or at least once so he could at least booked some gains?

Still, as future bond issuers belly up to the bar with their rating agency seals of approval, it is incumbent on the buying public to treat those IDs with a healthy skepticism. Firms such as PIMCO with large credit staffs of their own can bypass, anticipate and front run all three, benefiting from their timidity and lack of common sense. Take these recent examples for instance: S&P just this past week downgraded Spain “one notch” to AA from AA+, cautioning that they could face another downgrade if they weren’t careful. Oooh – so tough! And believe it or not, Moody’s and Fitch still have them as AAAs. Here’s a country with 20% unemployment, a recent current account deficit of 10%, that has defaulted 13 times in the past two centuries, whose bonds are already trading at Baa levels, and whose fate is increasingly dependent on the kindness of the EU and IMF to bail them out. Some AAA!

You also had this from PIMCO:

"Tramp stamp and hooker heels do not begin to describe the sordid, nonsensical role that the rating services performed in perpetrating and perpetuating the subprime craze, as well as reflecting the general deterioration of investment common sense during the past several decades. Their warnings were more than tardy when it came to the Enrons and the Worldcoms of ten years past, and most recently their blind faith in sovereign solvency has led to egregious excess in Greece and their southern neighbors."

Which led to this by williambanzai!

Buffett talks his book--again

Last weekend, Buffett said Blankfein of Goldman Sachs had his 100% support; and that if he had a twin, he would hire him.

He also said he didn't care  who was on the other side of the Abacus deal.

Really? That wasn't one of his rules?

Fortune speculated differently on Blankfein:

• "The start of a probe: Federal, Congressional, or all of the above." Well a criminal probe of the firm is underway; it doesn't get much more serious. A congressional probe and of course an SEC (SEC news) probe are also active.
• A "statement of confidence" from the board or a big investor. Goldman Sachs' top PR guy has maintained that the board fully supports Blankfein. Warren Buffett has also weighed in with enthusiastic support in a high-profile forum.
• "Denials of leaving, thinking of leaving, or knowing the definition of the word 'leave'." On Good Morning America, Blankfein said he had not started thinking about stepping down. For the most part, he's been mum on this issue.

Last weekend, Buffett said that if we bailed out GM, we'll bail out the states also.

"I personally think it would be very hard, in the end, for the federal government to turn away a state that is having extreme financial difficulties when in effect it honored General Motors  and various other entities," he said.

Buffett did fret about potential "contagion" in municipal defaults, where a default by one entity could lead to defaults by others.
Didn't Buffett guarantee billions and billions in municipal debt?

And now Buffett is fretting about municipal contagion?

He used to love contagion!

Then, as if asking a friend to spend an afternoon hunting golf balls, Buffett suggested that Monen drive around the state looking for stock. Sucked in by the Buffett contagion, Monen took off in  a red-and-white Chevrolet for the far corners of Nebraska, waving $100 a share at anyone he saw in a rural courthouse, banks, an dth elike. "It sounds corny," Monen said later, reflecting on his willingness to go. "Warren Buffett is as near to Mr. Perfect as anyone I know." Mr. Perfect and his partner captured 10 percent of the stock and made more than $100,000-Buffett's first big strike."

How about sovereign contagion?

A year ago, Buffett said the economic recovery would be very slow. Now he says its going great guns.

Really?

Let's get some sovereign contagion, and then lets see what he says.

Especially if he has to make good on some of his derivative bets!

Man arrested in Car Bomb

Wait--What a surprise.

His name?

Faisal Shahzad, and he was of Pakistani descent.

And the fingerprints on the crude propane bomb?

Middle Eastern.

That isn't racial profiling is it?

Picower to turn over $2 billion to Madoff investors

The net result is that he gets to keep (his estate--he died in the swimming pool) $4 billion plus from the Madoff scheme, and which gives us another word in the finance lexicon.

He gets to keep the $50 million in 95, the $390 million in 96, the $420 million in 97, the $506 million in 98, the $590 million in 99, the $658 million in 2000, the $821 million in 2001 and the $922 million in 2002!

You've been "Picowered!"

WSJ
The estate of Jeffry Picower, an investor in Bernard Madoff's Ponzi scheme who died last fall, is expected soon to pay at least $2 billion to other Madoff investors burned by the fraud, according to a court order filed on Monday.

Goldman ready to settle

FT
Goldman Sachs is planning to change some of its practices in dealing with institutional clients, a step that could help it settle charges filed last month by US securities regulators. The internal policy revisions come as the US Securities and Exchange Commission steps up demands for corporate governance changes as part of any negotiated settlement. While talks are not under way to resolve the SEC’s allegations that Goldman misled investors during the financial crisis over the sale of mortgage-backed securities, people familiar with each side of the dispute concede a settlement would be in the best interests of both parties. A former top SEC official said the regulator needed to demonstrate there had been real change, while the bank needed to put the uncertainty behind it.

Monster: Job recovery is real

WSJ
Monster Worldwide Inc. Chairman and Chief Executive Sal Iannuzzi said the global job market is improving and appears to be doing so at a sustainable rate, leading him to say that the company has turned a corner as well.

Mr. Iannuzzi, during an interview, said Monster believes that demand for its online job-search services is on solid footing again, a statement that he said he wouldn't have made a few quarters ago as the economic turnaround began.

"It's across the board, it's in virtually every segment, every professional or occupational sector, we are seeing increases in demand," Mr. Iannuzzi said. "The mood, the discussion, for our customers is much more positive than it has been. It looks like it's sustainable."
-------
Maybe some folks resumes looks better online than in person!

The sub-prime multiplier

I suppose you could call it, fractional reserve subprime lending Wall Street style!

WSJ
In one case, a $38 million subprime-mortgage bond created in June 2006 ended up in more than 30 debt pools and ultimately caused roughly $280 million in losses to investors by the time the bond's principal was wiped out in 2008, according to data reviewed by The Wall Street Journal.

This was a central finding of the Senate investigative panel probing Goldman Sachs Group Inc.'s actions in the mortgage market. In a memo last week, panel Chairman Sen. Carl Levin (D., Mich.) said Goldman's work "magnified the impact of toxic mortgages" by replicating mortgage securities in debt pools known as collateralized debt obligations as well as CDO derivatives, and also in an index that tracks subprime bonds.

The subprime mortgages that caused big losses generally were packaged into CDOs, in which dozens of mortgage-backed bonds were pooled together and slices of the CDOs were sold to investors. Another version of these CDOs didn't contain actual mortgage bonds but were linked to them via derivatives called credit-default swaps. Through the use of derivatives, banks created many of these synthetic CDOs using the same mortgage securities, all of which would rise or fall in value depending on how the mortgages were performing. With synthetic CDOs, those who had bet that the loans would perform well were on the hook if their performance deteriorated.

In effect, the documents said, Wall Street was "copying and pasting" what turned out to be the worst-performing securities of the mortgage boom. Such activity helped multiply opportunities for hedge funds and traders who wanted to short the housing market, but magnified the losses of those on the other side of the trades. To short a trade, in this instance, is to bet the housing market will turn down.

Taliban take credit for Times Square car bomb attempt

They had set up a youtube.com channel the day before, that was now taken down.

A top Pakistani Taliban commander took credit for yesterday's failed car bomb attack in New York City.

Qari Hussain Mehsud, the top bomb maker for the Movement of the Taliban in Pakistan, said he takes "fully responsibility for the recent attack in the USA." Qari Hussain made the claim on an audiotape accompanied by images that was released on a YouTube website that calls itself the Tehreek-e-Taliban Pakistan News Channel.

The tape has yet to be verified, but US intelligence officials contacted by The Long War Journal believe it is legitimate. The Tehreek-e-Taliban Pakistan News Channel on YouTube was created on April 30. Officials believe it was created to announce the Times Square attack, and Qari Hussain’s statement was pre-recorded.

All indications are the tape is legitimate. YouTube has pulled the video and shut down the Tehreek-e-Taliban Pakistan News Channel since this article was published.

Homeland Security chief Janet Janet Napolitano said otherwise:

Department of Homeland Security Secretary Janet Napolitano told ABC's Jake Tapper this morning that authorities had not found any evidence that the bomb scare in New York City on Saturday May 1 was part of a larger plot.

"We have no evidence right now that this is anything other than a one off," said Napolitano.

Obama at the White House Correspondents Dinner

"All of the jokes here tonight are brought to you by our friends at Goldman Sachs. So you don't have to worry, they make money whether you laugh or not."

Wall Street's latest scare tactic

Obama Cheating Scandal story gets legs

OBAMA CHEATING SCANDAL

Photo by: splash news online

PRESIDENT OBAMA has been caught in a shocking cheating scandal after being caught in a Washington, DC Hotel

with a former campaign aide, sources say.

And now, a hush-hush security video that shows everything could topple both Obama's presidency and marriage to Michelle!

A confidential investigation has learned that Obama first became close to gorgeous 35 year-old VERA BAKER in 2004 when she worked tirelessly to get him elected to the US Senate, raising millions in campaign contributions.

While Baker has insisted in the past that "nothing happened" between them, the ENQUIRER has learned that top anti-Obama operatives are offering more than $1 million to witnesses to reveal what they know about the alleged hush-hush affair.

Among those being offered money is a limo driver who says that he took Vera to a secret hotel rendezvous where the President was staying.

On the condition of anonymity, the limo driver said he took Baker "from a friend's home in the DC area to the Hotel George where I learned later that Obama would be spending the night."

The driver recalled that he "waited in the lobby while she went to change her outfit. 

"But to the best of my knowledge she did not have a room at the hotel and she was not staying there so I thought that it was a bit odd."

The driver said he then picked up Obama at the airport and drove both he and Baker to various locations while he was campaigning for funds.  Vera accompanied him to each meeting.

"About 10:30 PM, I drove them to the hotel and they went in together!"

"My services for the evening were done - and there was no indication she was going to leave the hotel that night."

A top DC source told The ENQUIRER exclusively that the driver's account had been independently corroborated by investigators who believe the couple spent the night together at the hotel.

The ENQUIRER has also learned that on-site hotel surveillance video camera footage could provide indisputable evidence.

"Investigators are attempting to obtain a tape from the hotel (that) shows Vera and Barack together," the DC insider confided. 

"If the tape surfaces, it will explode the scandal."

DEVELOPING STORY

Blankfein defends Goldman on Charlie Rose

Blankfein went on Charlie Rose last night defending his company, but his biggest endorsement came from Warren Buffett this morning, who said he supported Lloyd 100%.

But look at Lloyd with Buffett's billions. He can't even hide his glee!

“There were some e-mails where some people were projecting I would say, at best indifference, and at worst a callousness,” Blankfein, 55, said in an interview on the “Charlie Rose” television show last night, according to a transcript. While he said those e-mails aren’t representative of the firm, “it’s inexcusable if 10 people think that way or thought that way.”

Oh.

So now its just emails? It isn't about the money? About Goldman offloading their crap to their clients?

Oh.

Its just some rogue emailers!

How about Josh Birnbaum, who couldn't recollect anything about Paulson and Abacus at the Goldman hearing, except to remember that he wasn't a significant player.

Don't his emails show this:

"He's definitely the man in this space, up 2-3 bil on this trade," said an email from Joshua Birnbaum, a top Goldman Sachs trader, in July 2007, about three months after the bank struck the deal now under SEC scrutiny. "We were giving him a run for his money for a while but now are definitely #2," suggesting Paulson & Co.'s success on the trade was exceeding Goldman's

Now he's the man! And Goldman was piggybacking him!

But Lloyd said, "The firm is guiltless."

Oh my!

Get on Charlie Rose because the stock is dropping!

But the executives from Goldman, told us last year, in their previous TARP hearings, that they weren't at all concerned when Goldman's stock was under 60, because they had great confidence in the firm.

And then, only after the stock had rallied to 82, did Charle Gasbags report on that story.



Goldman ostensibly bailed them out, because they didn't want Wall Street to see insider sales of Goldman stock--only because of "perception" issues.

So are we really supposed to believe that Goldman executives weren't concerned when they stock was at $50? Like they told the world? Heck, Secretary Paulson even had to get a secret waiver to work with Goldman because he was so frightened!

So why now is Lloyd now pimping himself on television?

Because does anybody remember at what price Goldman issued stock to its partners for 2009 bonuses? And does anybody really remember how Goldman even gamed that?

Since Goldman had to issue 60% of their 2009 bonus in stock for their employees, instead of cash, Goldman decided to game the price. Back in early February. At $154.16.

In fact, the Goldman partners were even crowing about being paid in stock.


"Cash loses value over time, while Goldman stock gains," one partner said...

"It's made me rethink everything," a Goldman Sachs employee said last night. She was sipping champagne. "I like the new structure even better. My monthly take home just went way up."

So now that these folks are underwater by $9 on their Goldman stock, for their 2009 bonus, Lloyd goes on Charlie Rose.

And then gets the endorsement from "the man" himself, Warren Buffett!

Even though the Goldman bonus babies probably already synthetically locked in a price, while they talk bravely to the world!

While sipping champagne!