Anchovies in the Shark Tank?

On this sleepy news Monday morning, with little to no news around the globe that we can see, we would like to recommend a book for your summer reading list: Crapshoot Investing, by Barron’s Jim McTague. You can buy it easily on Amazon: Crapshoot Investing. This week marks the first anniversary of the May 6th, 2010 Flash Crash, and it is fitting that Barron’s over the weekend featured an excerpt of this book, which you can examine here, in their online edition.

We enjoyed the excerpt, as well as the book, as it does feature Themis, and our role in warning of the Flash Crash months before it occurred:

“The charges by Arnuk and Saluzzi were sensational and potentially explosive. The markets were being manipulated. Regulators had been asleep. This was outrageous, because the SEC and Finra were supposed to be cleaning up their act after missing abuses like Bernie Madoff’s Ponzi scheme. But after the two traders disseminated the white paper, nothing happened—nothing at all. Investors in December 2008 had other things on their minds. They were consumed by bailouts, failures, bankruptcies and the incoming administration of Barack Obama.

 

Arnuk and Saluzzi were not quitters. In a follow-up white paper in July 2009 they warned of the possibility of a lightning-fast market collapse induced by high-frequency traders. Once again, few people paid attention. It sounded shrill and far-fetched. But this would change on May 6, 2010, when the robots would abet the fastest, deepest market crash in history—the Flash Crash. “

 

I myself bought three copies of this book, and members of my family bought another sixteen thousand four hundred and twelve. It is a great book, aside from mentioning Themis.

Jim was great to work with; he is extremely thorough and very probing. In an age of content farms passing as journalism, Jim is old school. He dots the I’s, crosses the T’s, and looks at facts nineteen different ways, through prisms and kaleidoscopes, before he will accept them. He taught us a great deal, and we are grateful to have worked with him.

Jim has a flaw, however. His command of the English language is weak. In the first draft of his book, and in the first chapter, he described Arnuk as “chunky”. His editor wisely caught this gross lack of command, and so Jim changed “chunky” to “sturdy”. I personally didn’t even notice the “chunky” description, and certainly there was no email exchange discussing the use of the word chunky. Really. I mean that would be petty on my part if I had, and it would never have happened. Right? On board? Good.

Phew.

Please grab a copy of this book , as it is timely, gripping, and it describes the forest through the trees.

And I am not chunky, Jim.

We close by saying that we are so proud, yet again, of the prowess, courage, and expertise of our armed forces. Amazing news.

Where we left off 4:00pm EST:

INDU              12,810.54                                +47.23

SPX                 1,363.61                                  +3.13

CCMP             2,873.54                                  +1.01

Futures now at 7:00 am EST:

DJA                             +70 

SPA                             +7.10

NDA                           +12.25

Key Data out today:

 

10:00:              ISM Manufacturing

 

Since the prior close, some key stories:

 

–       Osama Bin Laden killed in his mansion in Pakistan 100 yards from a military compound, in a rich Pakistan neighborhood of retired military generals.

–       Chinese economy slowing? PMI Weak.  End of tightening soon?

–       Silver plunges.

–       Jens Weidmann replaces Axel Weber as head of the Bundesbank. 

–       Terex Corp (TEX): Press reports TEX is bidding for Demag Cranes (German crane manufacturer) for $1.3 B.

–       Return on Equity hits 10yr high.

–       Facebook Numbers Feed IPO Outlook – WSJ

–       Russian President Dmitri Medvedev is trying to retain his post in the Kremlin against the wishes of Prime Minister Vladimir Putin.

–       Google says location data is VALUABLE; nothing wrong.

–       Barron’s positive articles on IP, KND, M, RIMM, CSCO, EXPE, HPQ, EBAY, RHT.

 

Earnings:

 

Pre-market:  EIX, HUM, LYB, UGI

After the Close: ADP, AMX, APC, BGC, CHK, CNO, HIG, PFG

 

Significant Movers This Morning:

ICO +30%, TIVO +20%, TOL +9%, DISH +8%, EME +6%, FNFG +5%, JBLU +5%, CEPH +5%, TLCR +5%, PCX +5%, THC -7%, VRX -7%, SLV -7%, L -6%,