There are all kinds of ways to talk in life. You can have biting tone. You can speak very technically, with even tone. You can dance around issues, or you can talk straight. You can talk out of both side of your mouth, or you can call a spade a spade. Interestingly enough, one person whom I admire more than most other folks, and whom I certainly trust more than most other folks, is my elderly neighbor on the Jersey shore, Roberta (sorry for calling you elderly, Roberta, please don’t hurt me). She is a tough lady to be sure, but she has a heart that will melt Hades. If I could only share publicly the things she has done for her family and friends, I would. My mechanic at McCarthy’s Marine described her best: “Some folks call a spade a spade; Roberta calls it a f$%#ing shovel.”

To those who think our tone is too much, I guess we retort that our way of addressing important issues, that are neglected in our world, is to use a grabbing tone. We have done that from Day One, and we have done so because we take very seriously our duty to protect our clients. Even so, as we are human, we recognize that on occasion we should proof read one extra time, and I guess it would be wise for us to do that.

Speaking of tone though, and calling a spade a f$%@#ing shovel, Did anyone else read the piece in Wall Street and Technology, entitled “The Industry Must Educate The Public and Lawmakers About The Markets”? The piece takes a very condescending and disrespectful tone towards Senator Ted Kaufman. The author, who is also editor-in-chief, talks about his “embarrassing lack of knowledge”, while quoting an HFT firm as an expert and authority on the market structure and ethical issues our markets have. He closes by making this editorial statement: “If the industry wants to continue to have the most liquid and efficient markets in the world, it had better start to educate the public and Congress about how today’s markets work, what HFT really is and how it actually benefits investors.” So I guess the article is not journalism, but rather an editorial that takes one very pro-HFT stance to please its HFT-related advertisers. Well, I guess it is one thing to be a mouthpiece and shill for a specific industry, for profit motive, but it is another to attack a Senator in the process, and call it journalism (Merriam-Webster: writing characterized by direct presentation of facts or description of events without an attempt at interpretation).  The article was/is placed right on top in the home page, and sent out in email as “Featured Article”.   By the way, Senator Kaufman is a one-term senator by choice. That means he is not beholden to lobbyists and special interests. His informed views come from talking to industry participants from all sides of the issue, something that would shock the WST editor-in-chief, as opposed to just spewing one side’s party line week after week. Senator Kaufman has a long public service record of tirelessly working on the side of our military, common folks, and those whose voice all too often gets drowned out in a Washington game dominated by access for hire.

Here is an example to emulate: USA Today in its opinion/editorial section has a piece we agree with, entitled “Our View on Wall Street: Time to Put on the Brakes on High-Frequency Stock Trades”: USA Today anti-HFT. In the same editorial it links to James Angel’s opposing view, entitled “Safe at any Speed”: USA Today pro-HFT. Both sides presented. Journalism.

Oh, and this part is editorial on our part, and not journalistic (something I never think we are anyway): The first USA Today link is intelligent. The second USA Today link teaches us about supply and demand (yawn), but is yet another piece by a non-trader and someone with an agenda (in our opinion).

From a trading perspective, the markets often seem to key off of one specific cue. On some days it is whether or not GS will hold $1xx, or if the S&P 500 will hold 1121. Yesterday it keyed almost tick by tick with the movement in the Euro. And if we can be humorous for a moment, we have deduced that a certain HFT Firm typed “HF STOP” into their screens in the morning, and “HF GO” late in the day (see NYT Article : http://dealbook.blogs.nytimes.com/2010/05/17/speedy-new-traders-make-waves-far-from-wall-st/ to get the joke).

Where we left off 4:00pm EST:

INDU                      10,625.83              +5.67

SPX                        1136.94                 +1.26

CCMP                    2354.23                 +7.38

Futures now at 7:30am EST:

DJA                        +40.00

SPA                        +6.20

NDA                       +10.00

Key Data out today:

8:30:       PPI (estimate +0.1%)

8:30:       Housing Starts/Permits (estimate .650m)

10:00:     Retail Sales

Since yesterday’s close, some key stories:

–          Agilent Q2 beats Street, sees strong Q3.

–          Greece receives first payment and pays out a 14^th month’s pay to all citizenry.

–          Macarthur rejects Peabody takeover bid.

–          U.S. airlines sue to block union vote rule change.

–          UK inflation is stronger than expected.

Earnings Today:

Ticker               Estimate                 Actual

ANF                        -.14                         -.13

EDAP                     -.11                         -.35

HD                          0.40                        0.45

KIRK                       0.13                        0.32

SCR                        0.08                        0.05

Expected Earnings Later:

ADI, APP, GRRF, HPQ, SKS, SVN, SYPR, TJX, TNP, WMT, WSTL.