Some Thoughts:

Well, our paper has caused a stir. We are glad that it did, although we did not expect it to be as big as this. We are less than comfortable with the attention, but feel the issues we raise have to be raised. Often times we are amazed that folks much smarter than us, at firms with so much more resource, have not been more proactive at addressing some of these inherent conflicts in our system.

Our suggestion for all those on the buy-side and buy-side friendly firms (and there are certainly some brokers with impeccable reputations for looking out for buy-side interests): Call every market destination you send order flow to. Ask them if they do (a), (b), and (c). If they do, please ask them why. And please ask them to stop. To quote Jon Stewart in one of my favorite TV moments (no… not the Daily Show Cash Cow video, but rather his CNN Crossfire skirmish with Tucker Carlson a few years back): Stop hurting America.

Greece. Like the Energizer bunny. Still going… And the euphoria over the EU’s nuclear option of last weekend has waned. Folks are starting to become worried over the state of public finance in the Euro zone. The spread between 3mo Libor and the overnight risk rate has been spiking, and is hitting 9 month highs.

As a daily reader of our morning note, you probably know by now that we love baseball.  Sal and Vic are Yankee fans, Joe is a long suffering Mets fan and we think Paul is just a fan of the Democratic Party.  Baseball is actually a game where if you fail 7 times out of 10, you are still considered a very good hitter.  Since 1941, the only player to bat over .400 was Ted Williams when he hit .406 for the Red Sox.

Could you imagine if a player was able to hit 1.000 for 3 months straight?  Even better, what do you think the odds are of 4 players on the same team hitting 1.000 for 3 months straight?  Well, what is virtually impossible to do in baseball is very possible in the banking field.  Four of the largest banks (Goldman, JP Morgan, BofA and Citi) made money every day for the first 3 months of the year.  This seems almost like a statistical impossibility.  In fact, the very inquisitive reporter Jonathan Weil over at Bloomberg made this point here: http://www.bloomberg.com/apps/news?pid=20601039&sid=ax0kTsl0dBXw

The big difference between banking and MLB baseball is that Ben Bernanke is a meatball pitcher.  As long as he keeps serving up meatballs, the banks and their highly paid lineup should continue their heavy hitting.  But it looks like a relief pitcher has come in now that Big Ben has officially stopped buying mortgage backed bonds.  Let’s see how those big hitters can do now that a real pitcher is on the mound.

Where we left off 4:00pm EST:

INDU                      10,782.95              -113.96

SPX                        1157.44                 -14.23

CCMP                    2394.36                 -30.66

Futures now at 7:30am EST:

DJA                         -68.00

SPA                        -8.20

NDA                        -11.2

Key Data out today: Get Ready. Phew!

08:30:                     Retail Sales (estimate +0.2%)

09:15:                     Industrial Production (estimate +0.6%)

09:55:                     Michigan Sentiment (estimate 73.8)

10:00:                     Business Inventories (estimate +0.4%)

10:30:                     Weekly Index

Since yesterday’s close, some key stories:

–          Blockbuster Q1 loss in-line.

–          U.S. Same Store Sales down 7.8%.

–          CA Q4 profit trails street, 2011 revenue forecast misses estimates on software-investment cost.

–          NVDA dips on weak Q2 forecast.

–          Fed balance sheet rises $2.34 trillion on central bank swaps.

–          U.S. junk bond funds see $1.69 billion outflows.

–          U.S. muni bond funds post $280 million weekly inflows.

–          Senate passes measures for Credit-Rating body.

–          5 platforms shut due to Gulf oil spill.

Movers Since Yesterday’s Close:

TOPS +10% (earnings), HAIN +6.2% (Icahn).  BBI -22% (earnings), TSTC -11.2% (earnings), SVA -8% (earnings), CA -5.8% (earnings), AGNC -4.5% (secondary), NS -4.1% (secondary), NVDA -3.6% (earnings)

Earnings Today:

Ticker               Estimate                 Actual

CPC                       0.20                        0.21

CTFO                     0.06                        0.08

EURX                     -.10                         0.01

SORL                     0.15                        0.17

Expected Earnings Later:

FBR, JCP, MASC, NEXS, SBS, TNE, VOXX, ZSTN.