UBS AG’s U.S. brokerage unit stopped selling leveraged exchange-traded funds, a fast-growing segment of the asset-management market that some regulators say might be inappropriate for individual investors.
UBS Wealth Management Americas suspended sales of inverse and leveraged ETFs immediately, citing the “short-term nature of these securities,” the New York-based unit said yesterday in a statement.
Tuesday, July 28, 2009
Monday, July 27, 2009
Naked short selling banned permanently
The Securities and Exchange Commission on Monday made permanent a rule designed to curtail abusive "naked" short selling. "The new rule, Rule 204, requires broker-dealers to promptly purchase or borrow securities to deliver on a short sale," the SEC said. A temporary rule meant to curtail the practice was set to expire on July 31. The SEC said it is also working together with several self-regulatory organizations to make short sale volume and transaction data available.
Schumer Asks SEC to Ban Flash Orders Used by High-Speed Traders
Senator Charles Schumer asked the U.S. Securities and Exchange Commission to ban “flash orders,” saying the transactions give high-speed traders an unfair advantage over other investors.
Nasdaq OMX Group Inc., Bats Exchange Inc. and Direct Edge Holdings Inc. hold these orders for milliseconds, giving their customers the opportunity to gauge demand before traders on other exchanges get the chance to bid, Schumer said in a letter to SEC Chairman Mary Schapiro. Brian Fallon, a spokesman at Schumer’s office, confirmed the authenticity of the letter.
“Flash orders allow certain members of these exchanges to obtain access to order flow information before that information is made available to the public,” Schumer wrote. That allows “those members to use rapid trading programs to trade ahead of those orders and profit from advanced knowledge of buying and selling activity,” he added.
The senator said that if the SEC doesn’t prohibit flash orders, he will introduce legislation that would.
Nasdaq OMX Group Inc., Bats Exchange Inc. and Direct Edge Holdings Inc. hold these orders for milliseconds, giving their customers the opportunity to gauge demand before traders on other exchanges get the chance to bid, Schumer said in a letter to SEC Chairman Mary Schapiro. Brian Fallon, a spokesman at Schumer’s office, confirmed the authenticity of the letter.
“Flash orders allow certain members of these exchanges to obtain access to order flow information before that information is made available to the public,” Schumer wrote. That allows “those members to use rapid trading programs to trade ahead of those orders and profit from advanced knowledge of buying and selling activity,” he added.
The senator said that if the SEC doesn’t prohibit flash orders, he will introduce legislation that would.
Saturday, July 25, 2009
Javier Bardem leaves ‘Wall Street’ sequel
Javier “Friend-O” Bardem is leaving the sequel to the hit 1987 film “Wall Street,” which is tentatively titled “Money Never Sleeps.”
Javier Bardem (on the left) and his doppelganger, Jeffrey Dean Morgan (right).
The original starred Michael Douglas and Charlie Sheen. This one will see Douglas reprise his role as Gordon Gekko, and will add Shia LeBeouf to the mix.
The movie is to begin filming in August, but Bardem won’t be part of it.
Bardem apparently has “five or six other offers,” according to one of his representatives.
I’ve got a suggestion for a replacement: Jeffrey Dean Morgan. I’m not convinced they aren’t the same person anyway.
High Frequency Trading
It is called high-frequency trading ‘ and it is suddenly one of the most talked-about and mysterious forces in the markets. Powerful computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange, enable high-frequency traders to transmit millions of orders at lightning speed and, their detractors contend, reap billions at everyone else’s expense. These systems are so fast they can outsmart or outrun other investors, humans and computers alike. And after growing in the shadows for years, they are generating lots of talk.
http://www.nytimes.com/2009/07/24/business/24trading.html
http://www.nytimes.com/2009/07/24/business/24trading.html
Wednesday, July 22, 2009
Tuesday, July 21, 2009
Is Goldman Sachs Front Running the Entire Market?
Goldman Sachs just raised the S&P target for 2009 to 1,060. Why? It's not because things are "really" getting better. And it's not because they would be buyers in this market. No, it's because they need to pump this market, so they can dump their shares to you . . . at inflated prices that will be big losers for you.
Monday, July 20, 2009
NYSE Begins Extensive Renovation of Trading Floor
NYSE Euronext has launched a major renovation of its stock-trading floor.
Over the next 18 months, the exchange operator plans to demolish much of its Main Room where NYSE-listed securities are traded and build large sit-down trading areas for brokers.
The goal is to encourage brokers with existing floor operations to situate all or some of their upstairs trading operations on the floor, giving them a unified trading environment and, hopefully, generate more volume for the NYSE.
"We are going to create a refreshed look for the floor trading community and create traditional trading desks," Bob Airo, a senior vice president for NYSE market operations. "A floor-based firm could bring its whole upstairs trading desk down to the NYSE floor."
Currently, in the Main Room, broker booths ring the perimeter while specialist posts fill in the center. The booths are old--"decrepit," according to NYSE senior executive Larry Leibowitz--and require traders to stand up while working.
The NYSE plans to demolish many of the old booths and build large open trading areas that will be able to accommodate as many as 40 traders each.
The exchange also plans to upgrade its network, add new wallboards, outfit a booth for a major news organization and build a food court. It will also renovate the specialists' posts by making them more open.
The finished product will likely resemble NYSE Euronext's brand new NYSE Amex trading floor. The floor is more open with wide countertops; a stark contrast to the closed-in environment of the Main Room.
The work will mostly be done on the weekends, so as not to disrupt trading. After the exchange finishes work on the Main Room, it will undertake a similar renovation of the Garage, its second trading room for NYSE-listed securities.
The exchange has divided the project into quadrants. It expects to be able to put about 15 firms in all four quadrants when the work is completed. It has firm commitments from five firms for the first quadrant, including one bulge bracket firm. It is in talks with six others. The rebuild is expected to appeal mostly to small and growing floor brokers trying to balance a floor presence and an upstairs operation.
The exchange would not divulge the cost of the project although it says it is partnering with the brokers to pay for it. Sources say the exchange is picking up the lion's share.
Behind the move is the realization that most activity on the floor takes place at the opening and the close. In between those time periods, most trading is done upstairs. The exchange believes that many, mostly independent, firms would benefit by being able to do all their trading in one place. They would save on real estate costs and generate efficiencies by having all personnel in one place.
The exchange also hopes to see more trading happen on the floor. "A sales trader on the floor might be less likely to throw an order into an upstairs algorithm," Airo explains. "He would work it on the floor."
One of the firms with which the exchange is in talks is Rosenblatt Securities. With seven traders on the floor, Rosenblatt operates the largest NYSE-listed trading operation at the exchange. Rosenblatt has had an upstairs desk for twenty years
Dick Rosenblatt, chief executive of Rosenblatt Securities and an NYSE executive floor governor, says he's not currently planning to move his upstairs operation down to the floor, but sees the benefit for some firms. "I think it's most appealing for a firm that is trying to launch or expand an upstairs business," he says. "In growing anything, you are absorbing a lot of costs. Here the exchange is offering to help you defray that expense."
Rosenblatt also notes that floor brokers benefit from unique order types provided by the exchange that upstairs traders use through their floor brokers. A combined facility would ease that coordination.
Over the next 18 months, the exchange operator plans to demolish much of its Main Room where NYSE-listed securities are traded and build large sit-down trading areas for brokers.
The goal is to encourage brokers with existing floor operations to situate all or some of their upstairs trading operations on the floor, giving them a unified trading environment and, hopefully, generate more volume for the NYSE.
"We are going to create a refreshed look for the floor trading community and create traditional trading desks," Bob Airo, a senior vice president for NYSE market operations. "A floor-based firm could bring its whole upstairs trading desk down to the NYSE floor."
Currently, in the Main Room, broker booths ring the perimeter while specialist posts fill in the center. The booths are old--"decrepit," according to NYSE senior executive Larry Leibowitz--and require traders to stand up while working.
The NYSE plans to demolish many of the old booths and build large open trading areas that will be able to accommodate as many as 40 traders each.
The exchange also plans to upgrade its network, add new wallboards, outfit a booth for a major news organization and build a food court. It will also renovate the specialists' posts by making them more open.
The finished product will likely resemble NYSE Euronext's brand new NYSE Amex trading floor. The floor is more open with wide countertops; a stark contrast to the closed-in environment of the Main Room.
The work will mostly be done on the weekends, so as not to disrupt trading. After the exchange finishes work on the Main Room, it will undertake a similar renovation of the Garage, its second trading room for NYSE-listed securities.
The exchange has divided the project into quadrants. It expects to be able to put about 15 firms in all four quadrants when the work is completed. It has firm commitments from five firms for the first quadrant, including one bulge bracket firm. It is in talks with six others. The rebuild is expected to appeal mostly to small and growing floor brokers trying to balance a floor presence and an upstairs operation.
The exchange would not divulge the cost of the project although it says it is partnering with the brokers to pay for it. Sources say the exchange is picking up the lion's share.
Behind the move is the realization that most activity on the floor takes place at the opening and the close. In between those time periods, most trading is done upstairs. The exchange believes that many, mostly independent, firms would benefit by being able to do all their trading in one place. They would save on real estate costs and generate efficiencies by having all personnel in one place.
The exchange also hopes to see more trading happen on the floor. "A sales trader on the floor might be less likely to throw an order into an upstairs algorithm," Airo explains. "He would work it on the floor."
One of the firms with which the exchange is in talks is Rosenblatt Securities. With seven traders on the floor, Rosenblatt operates the largest NYSE-listed trading operation at the exchange. Rosenblatt has had an upstairs desk for twenty years
Dick Rosenblatt, chief executive of Rosenblatt Securities and an NYSE executive floor governor, says he's not currently planning to move his upstairs operation down to the floor, but sees the benefit for some firms. "I think it's most appealing for a firm that is trying to launch or expand an upstairs business," he says. "In growing anything, you are absorbing a lot of costs. Here the exchange is offering to help you defray that expense."
Rosenblatt also notes that floor brokers benefit from unique order types provided by the exchange that upstairs traders use through their floor brokers. A combined facility would ease that coordination.
Saturday, July 11, 2009
Who's Jordan Belfort?
Jordan Belfort is the biggest Wall Street crook you've never heard of. He was the king of funny business (not in the ha-ha way) during the bull market of the '90s, nicknamed "The Wolf of Wall Street." Belfort hired young, hungry brokers. Some hadn't even graduated from high school. All they had to do was swear loyalty to him, read his scripts over the phone while cold calling, and everyone would get rich. It was a classic pump and dump scheme where brokers would drive up the price of stocks, and then Belfort would dump the large chunks he and his partners controlled, cashing out. Then the stock prices would collapse.
And everyone at Stratton Oakmont did get rich. And then they all did a lot of drugs, drank a lot of expensive wine, bought a lot of outrageous toys, and threw outrageous parties populated by a lot of hookers. You have to hear this guy tell his own story. More details are in his new book "The Wolf of Wall Street," which has now been optioned for a movie, naturally. Leonardo Di Caprio is interested!
He says he flew his own helicopter while high, sank his 167-foot yacht (once owned by Coco Chanel) in the Mediterranean while high, drove with his 3-year-old daughter unbuckled beside him though a garage door while high. Belfort says at the height of his drug problem, he was taking 22 different medications: 20 quaaludes a day, balanced out by cocaine, the morphine, xanax, valium, etc. You name it, he abused it.Even if half of this is true (skeptical as always) how are you alive? He says he was just really good about balancing it all out.
Belfort was finally arrested and convicted. And, in keeping with the insanity of it all, his cellmate turned out to be Tommy Chong, of Cheech and Chong fame. Chong was apparently serving time for selling bongs over the internet
Wednesday, July 8, 2009
Monday, July 6, 2009
Shanghai Wants its Own ‘Wall Street Bull’
New York’s charging bull statue that sits near Wall Street in lower Manhattan is a symbol of wealth, power and dominance ; a status that China desperately seems to want to achieve. According to Chinese state media reports on Saturday, Mainland’s financial capital, Shanghai, has decided to build a relatively similar version of New York’s charging bull. It will be twice as big as the one in NYC.
From Reuters:
Shanghai, plans to install its own version of the Street’s famed charging bull statue, casting in metal its hopes to eventually rival New York.
[The statue] will sit on the city’s famous Bund riverfront, across from the Pudong financial district, weighing 6 metric tonnes, compared with Wall Street’s 3.2 tonne beast.
Xin Yaqin, an official in Shanghai’s Huangpu district, said the statue was intended to “bring confidence and fortune to the Chinese people in times of economic uncertainty,” the paper reported.
“Shanghai is different from New York, so we’ll ask the artist to add Chinese characteristics to the sculpture,” Xin said.
The giant bull statue will weigh more than 13,000 pounds compared to the 7,000 pound bull in New York, according to China Daily.
China’s growing business hub, Shanghai, is home to China’s biggest stock exchange and the regional base of many multinationals.
From Reuters:
Shanghai, plans to install its own version of the Street’s famed charging bull statue, casting in metal its hopes to eventually rival New York.
[The statue] will sit on the city’s famous Bund riverfront, across from the Pudong financial district, weighing 6 metric tonnes, compared with Wall Street’s 3.2 tonne beast.
Xin Yaqin, an official in Shanghai’s Huangpu district, said the statue was intended to “bring confidence and fortune to the Chinese people in times of economic uncertainty,” the paper reported.
“Shanghai is different from New York, so we’ll ask the artist to add Chinese characteristics to the sculpture,” Xin said.
The giant bull statue will weigh more than 13,000 pounds compared to the 7,000 pound bull in New York, according to China Daily.
China’s growing business hub, Shanghai, is home to China’s biggest stock exchange and the regional base of many multinationals.
Ex-Goldman Programmer Must Post $750,000 Bail
A former Goldman Sachs computer programmer accused of stealing secret trading codes from the investment bank was being held in federal custody Monday, pending the posting of $750,000 bail.
Sergey Aleynikov, 39, was ordered by U.S. Magistrate Kevin Nathaniel Fox in Manhattan on Saturday to post a $750,000 personal recognizance bond to be secured by three financially responsible people.
The bond also was to include $75,000 in cash, and Aleynikov was ordered to surrender his passport.
Aleynikov, a Russian immigrant living in New Jersey, was arrested on Friday night by FBI agents at Newark Liberty International Airport after returning from Chicago, according to court documents.
He is accused of "theft of trade secrets" related to computer codes used for automated stock and commodities trading at an unspecified financial institution.
Sources familiar with the situation have told Reuters columnist Matthew Goldstein that the financial institution is Goldman Sachs
A Goldman representative declined to comment Monday. A lawyer for Aleynikov, Sabrina Shroff, also declined to comment.
Authorities contend that Aleynikov improperly copied a financial institution's proprietary computer code and then uploaded it to a computer server in Germany.
In court papers, an FBI agent said Aleynikov worked at an unspecified financial institution as a programmer from May 2007 until June 5, when he left to work for a new company focused on high-volume automated trading.
The case could shed light on the intricate trading systems developed by Goldman, and also raises questions about the security of Wall Street's proprietary trading operations.
Aleynikov's wife, Elina, told Reuters on Sunday that her husband is innocent.
Speaking in a phone interview from the couple's New Jersey home, she said her husband worked hard for Goldman and has been a good citizen who has lived in the United States for 19 years.
Aleynikov was being held at the Metropolitan Detention Center in Brooklyn as of Monday morning, according to the federal Bureau of Prisons website and an officer at the jail.
Sergey Aleynikov, 39, was ordered by U.S. Magistrate Kevin Nathaniel Fox in Manhattan on Saturday to post a $750,000 personal recognizance bond to be secured by three financially responsible people.
The bond also was to include $75,000 in cash, and Aleynikov was ordered to surrender his passport.
Aleynikov, a Russian immigrant living in New Jersey, was arrested on Friday night by FBI agents at Newark Liberty International Airport after returning from Chicago, according to court documents.
He is accused of "theft of trade secrets" related to computer codes used for automated stock and commodities trading at an unspecified financial institution.
Sources familiar with the situation have told Reuters columnist Matthew Goldstein that the financial institution is Goldman Sachs
A Goldman representative declined to comment Monday. A lawyer for Aleynikov, Sabrina Shroff, also declined to comment.
Authorities contend that Aleynikov improperly copied a financial institution's proprietary computer code and then uploaded it to a computer server in Germany.
In court papers, an FBI agent said Aleynikov worked at an unspecified financial institution as a programmer from May 2007 until June 5, when he left to work for a new company focused on high-volume automated trading.
The case could shed light on the intricate trading systems developed by Goldman, and also raises questions about the security of Wall Street's proprietary trading operations.
Aleynikov's wife, Elina, told Reuters on Sunday that her husband is innocent.
Speaking in a phone interview from the couple's New Jersey home, she said her husband worked hard for Goldman and has been a good citizen who has lived in the United States for 19 years.
Aleynikov was being held at the Metropolitan Detention Center in Brooklyn as of Monday morning, according to the federal Bureau of Prisons website and an officer at the jail.
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