Dumbest Solution to the Flash Crash

Professor Larry Harris of the USC Marshall School of Business penned an article for the Wall Street Journal. It may be the dumbest article I have ever read in the Journal. That is saying something, since Thomas Frank writes there …

Hearing Before the Financial Services Committee 5-11-2010

Today they had a hearing on the Flash Crash from May 6. Very interesting the statements, and the positioning of all the players. First, the politicians got to make statements. Some clearly don’t understand what the heck is going on. …

The American Taxpayer and the European Bailout

There are politicians that are playing politics with the European bailout. What a surprise. The US is part of the International Monetary Fund(IMF). We happen to be the biggest backer of the fund. The EU and the ECB bailed out …

Circuit Breakers?

The big exchanges met the SEC. No one was taken out to the woodshed. Instead of actually changing the structure of the market, they decided to try and keep the old backroom games alive. Circuit breakers on individual stocks. This …

Liquidity, Who Has It, and Who Doesn't

One term everyone is throwing around these days is liquidity.  Different people define liquidity differently.  To a risk taking trader, it’s the amount of contracts bid for, and offered at, plus the width of the spread between the bid and …

CFO Talk

After seeing the “flash crash” of last week, you have to wonder what is going through the minds of US Chief Financial Officers(CFO). Suppose you were a CFO at a growing company that was beginning to analyze a major decision …

Tumultuous

Wow, what a week.  Never underestimate the power of a bear market.  The real rough ride is going to continue.  Hope you brought your dramamine. First, let’s clear up some misconceptions out there.  This was not caused by a fat …

From a Squawk Box next to the CME S+P Pit

This is how it used to be.  Crazy.  If the market was all open outcry, the break would have been much slower-and it may be doubtful that it would have happened at all.  Tip of the hat to zerohedge.com http://www.zerohedge.com/sites/default/files/Market%20Crash.mp3

Snicker Going Around the Floor

Hey, that’s what you get with government employees. They turn millions into billions….. Since Citi is owned by the government now!

This Isn't Sandlot Baseball

Back when I was a little kid, we used to play lots of sandlot baseball.  Sometimes things would happen-a ball would hit a low hanging tree branch-something out of the ordinary.  Someone would shout “Do over”.  Then we’d play it …

Why Would the Dow Plunge Like it Did

Why would the marketDow plunge like it did?  (I have updated this Friday evening, May 7 in italics-information has changed.) Several points.  First, this is happening more and more with the advent of electronic trading.  Electronic programs are not necessarily rational. …

NOVA

Here is a NOVA program on behavioral versus traditional market based Adam Smith notions of economics.  Very interesting. Mind Over Money | NOVA | PBS Video takes about an hour to watch. Some feedback:  First off, the behavioral experiments are …

Figure of the Day-10.6 Billion for Freddie

The CBO reports that by the year 2020, the US taxpayer will have spent 389 Billion bailing out Fannie Mae and Freddie Mac.  Yesterday, Freddie Mac asked for another 10.6 Billion since they lost so much money the last quarter. …

Insider Trading, Washington DC style

Today in the Wall Street Journal, they had an article about insider trading and Congress.  Apparently, Congress wants to go after all insider trading, but not their own.  This doesn’t surprise me, since the Dodd bill does nothing about Fannie …

Why the Euro is Under Pressure

Many people don’t understand why the Eurozone is melting down, and why it cannot work for the long term. Without getting into the politics of the situation, let’s look at it from simply an isolated situation. Greece versus the European …

Now Obama Targets your 401(k)

From Gateway Pundit, the Obama administration is targeting your 401(k) to pay for the bail out of unions. It would act like another layer of social security.  The idea has floated around in hard left circles for a long time. …