Wall Street Irony, Charlie Sheen, the SEC, My Son Billy, and the HFT-loving Professor

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We have occasionally dabbled with educational lessons in past Themis Thoughts. We have undertaken history lessons (SOES Bandits è NASDAQ), physics lessons (optimal locations for HFT to collocate è Hell), as well as lessons by example (think my wife’s family at Thanksgiving). Today we move on to English lessons. Specifically, we wish to illustrate the correct usage of irony, and specifically how it finds its way into our beloved industry.

Irony actually has several meanings. It can mean the usage of words to mean something very different from what they mean on the surface. A great example of this would be Jonathon Swift’s A Modest Proposal, in which he advocates the eating of babies as a solution to overpopulation in Ireland. It can also mean an outcome of events contrary to what was, or might have been, expected. A good example of this is when Sarah Palin stood outside a slaughterhouse where turkeys were being killed in mass, on live television, while she advocated mercy, compassion, and giving thanks. But I digress. For today’s Thoughts I want to look at Irony in Wall Street, and highlight four examples of it that jumped out at us just yesterday!

Case One: Which Arnuk?

Irony. A Financial website wants to explain the recent phenomenon on Wall Street called High Frequency Trading. It wants the expertise of an Arnuk. No, I don’t mean me. Although I have been breathing the issues surrounding high frequency trading for a decade, the expertise that the financial website sought out (on its own) was that of my son, William. You see they found an 8th grade civics class youtube video he made on high frequency trading last year, and decided that its was the best explanation of high frequency trading they had seen anywhere. Click Here To See William’s Video on HFT on PlusUltraTech.com

Case Two: Pot, Meet Kettle

 

President Obama grills President Hu Jintao on how his country (China) is manipulating its exchange and interest rates. (Tim guffaws).

Case Three: Kind of Like Appointing Charlie Sheen as Captain of Vice Squad?

 

The SEC, who fined Goldman Sachs $550 million to settle fraud charges just six months ago, just hired former Goldman Sachs employee, Eileen Rominger, to run its Investment Management Division (Wall Street and Technology Article). Yes you read correctly. Now may I please have a hot poker to shove in my eye sockets please?

Case Four:

Professor Angel from Georgetown, and frequent HFT defender, Enters the lobbying business by sending a brand new “research paper” to the SEC that defends HFT on flawed principles and studies (Brogaard assumptions laughable). He does not disclose that he wrote papers and books for Knight. He also doesn’t disclose that he is on the board of Direct Edge, the only exchange that still flashes your orders! Ironic! Wait… this one is not ironic… it is exactly what we would have expected. Scratch Case Four.

 

Where we left off 4:00pm EST:

INDU               11,825.29                                -12.64

SPX                 1,281.92                                  -13.10

CCMP              2,725.36                                  -40.49

Futures now at 7:30am EST:

DJA                             -29 

SPA                             -3.80

NDA                            -5.00

Key Data out today:

 

08:30:              Initial Jobless Claims (expecting 420,000)

08:30:              Continuing Claims (expecting 3,985,000)

10:00:              Existing Homes Sales

10:00:              Leading Indicators

10:00:              Philly Fed

 

Since the prior close, some key stories:

 

–       Earnings front and center, especially high flyers (FFIV), and the ones that may trade in sypmpathy with it: (RVBD, AKAM,APKT, CRM, NTAP, CTXS)

–       EBAY beat

–       Commodities lower on interest rate concerns.

–       Nokia cancels launch of new smart phone with AT&T

–       China GDP 9.8%, CPI 4.6% lead to concern China will raise rates.

–       Brazil raises rates again.

–       India expected to raise rates.

–       Templeton’s Mobius may set up a hedge fund for the emerging markets.

–       FT article points out how investors are returning to stocks in mass! Woo Hoo!

–       Vanguard tops Blackrock in emerging market ETF price war!

–       Everyone wondering why President HU is visiting Chicago, which has 4 Chinese residents.

–       Spain to ramp up bank bailouts.

–       AAPL criticized by Chinese environmental groups.

–       MNKD down 40% (FDA issues)

–       Fitch says USA has worst “AAA metrics” among soverigns.

 

 

Earnings:

 

Pre-market:  MS, COL, FCX, FITB, HBAN, JCI, LUV, MI, PGR, PH, PPG, UNH, UNP 

 

After the Close: AMD, COF, FLEX, GOOG, IGT, ISRG, MXIM, PBCT

 

 

Significant Movers This Morning:

DDS +9.2%, EBAY +2.5% (earnings), WEN +6% (Arby’s for sale), MS 2% (earnings) MNKD -43.1% (FDA issues) FFIV -22.7% (earnings) WSTL -12.5% (earnings) RVBD -10% (FFIV sympathy) NTAP -6.2% (FFIV sympathy) CRM -5.1% (FFIV sympathy) STX -4.7% (earnings) VMW -4.1% (FFIV sympathy) CTXS -3.9% (FFIV sympathy) AINV -3.2% ($150M convert) FITB -2.8% (earnings; $1.7B secondary) RHT -2% (FFIV sympathy).