Morning Report 9/27/12

Vital Statistics:

  Last Change Percent
S&P Futures  1434.2 7.3 0.51%
Eurostoxx Index 2507.7 9.2 0.37%
Oil (WTI) 91.23 1.3 1.39%
LIBOR 0.36 -0.002 -0.55%
US Dollar Index (DXY) 79.74 -0.141 -0.18%
10 Year Govt Bond Yield 1.64% 0.03%  
RPX Composite Real Estate Index 194.5 0.1  

 

Markets are higher this morning on speculation of further stimulus measures out of China, in spite of some lousy economic data. Bonds and MBS are down.

2Q GDP was revised down to +1.3% from +1.7%. Big revision downward. Durable goods slumped 13% on a decline in aircraft orders.  Revisions were down across the board. About the only bright spot was a drop in initial jobless claims to 359k.  While some might dismiss the drop in durables as just normal volatility, I would point out that Caterpillar has already warned.  Speaking of which, we are getting pretty close to pre-announcement season, when companies that are going to miss their quarter fess up to the Street.  

Yesterday’s report from the Commerce Department noted that sales of new single-family houses in August were at a seasonally adjusted rate of 373k, up 28% from Aug 11.  The shocking statistic from the report was that the median sales price of a new home was 257k, up 17% from a year ago. The homebuilders aren’t reporting price increases like that –  KB Homes said sales prices were up 5% YOY in their 3Q results, while Lennar reported a 4% price increase.  Is it perhaps that bigger houses are being sold now and that accounts for the increase?  Nope – McMansion builder Toll Brothers reported prices increased only 1%, and we all know that the remaining problems in the real estate market are at the high end, where it is cheaper to buy than build. And if prices really were increasing 17% YOY, housing starts wouldn’t be 750k, half of the 1959-2002 average run rate.  So something fishy is going on – perhaps Commerce is trying to put out good statistics to help Obama’s campaign and intends to quietly revise the numbers downward once he gets elected.

The first time homebuyer is still struggling to get involved in the real estate market.  The latest NAR Confidence Index Report showed that first time homebuyers were only 31% of all sales, much lower than their typical 40% share.  Tight credit and cash buyers account for the drop. Buyer traffic has jumped considerably over the past year, while seller traffic has remained flat. 

 

Robots Are Coming! (To Take Our Jobs)

I love optimistic futurism, and, frankly, I think it’s generally correct. Technology makes things better (well, everything except the human ability to greet tremendous, global improvements with bitter disappointment, because they still aren’t haaaappppyyyyy). Andrew MacAffee has it right, I think. Robots are coming to take our jobs, but the net result is it’s a good thing.

For a counter point, I direct you to The Android Sisters 1984 song, “Robots are Coming”.

“Robots are coming. Give us your jobs.”

Bites and Pieces: Macaroni and Cheese

Comfort food doesn’t get any more comforting than macaroni and cheese. Millions of harried parents crack open a box of Kraft Mac & Cheese and have an easy dinner that they know will be gobbled. I once ran into a financial emergency in graduate school. I miscalculated my expenses and ran out of money before I ran out of month. [How quaint. Someone in his mid-20s without a credit card.] I sold a text book and made plans to eat mac & cheese for a week. Not content with boxes, I bought a pound of dry macraoni, a block of Velveeta, and a few additions such as a can of diced green chiles.

Fifteen years later, I was introduced to a better approach. My girlfriend’s room mate used to work at the New England Conservatory of music. There would often been left-over (good) cheese from receptions, which she would use to make the mac and cheese recipe from Best Recipe, a complication of favorites from Cooks Illustrated. Their recipe is adapted from John Thorne’s book Simple Cooking. I’ve been making a slightly tweaked version of it ever since.

Home made macaroni and cheese usually consists of pouring a Mornay sauce (white sauce with cheese) over cooked macaroni, possibly topped with toasted bread crumbs. Good, but not necessarily rich. I like rich. This one is akin to a custard, so it is thickened with eggs, not flour. Here is the base recipe:

Ingredients

2 large eggs

1 can of evaporated milk (or 1 ½ cups of milk)

½ teaspoon salt

¼ teaspoon ground pepper (black is fine, though white is nice for color)

¼ teaspoon hot sauce

1 teaspoon dried mustard, dissolved in 1 teaspoon of water

4 tablespoons unsalted butter, cut into pieces (half an inch or so is fine)

12 ounces sharp cheddar cheese, shredded

8 ounces of dry macaroni

Method

  1. Bring two quarts of water to a boil, add macroni and 1 teaspoon of salt. Cook until not quite done (it finishes cooking later).
  2. Meanwhile, whisk the eggs and combine with one cup of milk, salt, pepper, hot sauce and mustard. Shred the cheese.
  3. Pour macaroni into a colander to drain. Return to pot and toss with butter. Turn burn to medium and add the egg & milk mixture and 8 ounces of cheese. Stir until the cheese melts. Gradually add the remaining milk and cheese, stirring until the mixture thickens.
  4. Top with bread crumbs if you like. Did I forget to mention the bread crumbs?

The original recipe calls for evaporated milk, which makes a terrific sauce, but one very high in fat. I think whole milk works fine. You could probably use 2%, but I wouldn’t go lower in fat content. When I first used regular milk, my sauce took ages to thicken. I’ve found that I can obtain the right texture by undercooking the macaroni and stirring under medium high heat. You can also get away with dropping down to two or three tablespoons of butter. Don’t go underboard, though. CI later published a low fat version of the recipe, which just goes to prove that some things don’t work.

Variations

I’ve recently started varying the recipe a bit, mainly with the spicing. I was at my brother’s lake house in July and spotted some KC Masterpiece barbeque sauce. I replaced the spices with BBQ sauce to taste, probably about about a quarter cup. It was a hit. Another time, I tried using a teaspoon five spice powder instead of the mustard. It gave the dish a subtle twist.

The Competition

Post your favorite recipe in the comments section or email me and I’ll add it to the main post. Perhaps we can do a mac and cheese cook-off!

BB


Michigoose’s contributions:

Stove-Top Mac-n-Cheese

from Alton Brown

Ingredients

1/2 lb elbow macaroni

4 T butter

2 eggs

6 oz evaporated milk

1/2 t hot sauce (I like to use Cholulu Sauce)

1 t kosher salt

3/4 t dry mustard

10 oz sharp cheddar cheese, shredded (I usually use a mixture of cheeses here, much like FB’s girlfriend’s roommate)

In a large pot of boiling, salted water cook the pasta to al dente and drain.  return to the pot and melt in the butter.  Toss to coat.

Whisk together the eggs, milk, hot sauce, salt, pepper to taste and mustard.  Stir into the pasta and add the cheese.  Over low heat continue to stir until creamy, about 3 minutes.

Very, Very Bad for you Baked Macaroni and Cheese

from Giada De Laurentiis

Ingredients

12 oz wide egg noodles

2 cups heavy cream

2 1/2 cups whole milk

2 t flour

2 cups grated Fontina cheese (packed)

3/4 cup grated Parmesan cheese (packed)

3/4 cup shredded mozarella

4 oz pancetta, diced and cooked crisp

2 T Italian parsley, chopped

Italian bread crumbs

Preheat the oven to 450 degrees and butter a 13 x 9″ baking dish and set aside.

Cook the noodles until tender but still firm; drain well.  Whisk the cream, milk, and flour in a large bowl, then stir in half of each of the cheeses, the pancetta and the parsley.  Add the noodles and toss to coat.

Pour the noodle mixture into the prepared baking dish, sprinkle the remaining cheese over the top, then dust with bread crumbs.

Bake until the sauce bubbles and the cheese and crumbs on top begin to brown, about 20 minutes.  Let stand for 10 minutes before serving.

Michigoose’s Dad’s Macaroni and Cheese Supreme

I never actually got to eat mac and cheese when I was growing up unless it was at somebody else’s house.  My Dad had developed a serious aversion to it after he and my Mom had to eat it for weeks on end when they were first married and still poor college students.  After working on his own recipe for several years he finally developed one he could eat.  And like all my Dad’s recipe’s, it’s very, very involved!

Ingredients

1 cup macaroni, cooked and drained

1 1/2 T butter

1/2 small onion, chopped

1/2 cup mushrooms, sliced

1 T flour

3/4 cup skim milk

3/4 cup ham, fully cooked and cubed

1/4 t dry mustard

1 dash ground black pepper

1/4 t salt (he uses table salt, so adjust if you use something else)

1/2 t Worcestershire sauce

1 dash hot sauce (here he undoubtedly means Tabasco)

1/2 cup frozen peas, thawed

1/2 cup grated cheddar cheese

1/2 cup grated Swiss cheese

1/2 cup bread crumbs

2 T butter

2 T green pepper, chopped (I think he means a jalapeno here)

Heat oven to 375 degrees; cook macaroni to al dente, drain and set aside.

Melt butter over medium heat and saute onions until light golden in color.  Add the mushrooms and saute another 4 minutes.  Add the flour and cook, whisking continuously, for 1 minute.  Gradually add the milk, stirring constantly.  Bring to a boil and cook for 1 minute.  Remove from the heat.

Stir the ham, mustard, pepper,salt, Worcestershire sauce, hot sauce, peas and cheese into the milk mixture and stir until the cheese is melted.

Toss together the sauce and macaroni, then spoon into a buttered baking dish.  Bake covered for 20 minutes.  Uncover, dot the top of the casserole with the remaining 2 T of butter and cover with bread crumbs.  Bake another 10 minutes.

Garnish with the pepper and serve.


Morning Report 9/26/12

Vital Statistics:

  Last Change Percent
S&P Futures  1433.8 -3.4 -0.24%
Eurostoxx Index 2512.3 -56.2 -2.19%
Oil (WTI) 89.94 -1.4 -1.57%
LIBOR 0.362 -0.001 -0.34%
US Dollar Index (DXY) 79.93 0.376 0.47%
10 Year Govt Bond Yield 1.64% -0.03%  
RPX Composite Real Estate Index 194.5 0.0  

Markets are weaker this morning as Europe sells off and commodities weaken. Spanish bond yields are back above 6%.  Perhaps the late summer lull in European news is over and it will take center stage again.  If so, the markets didn’t have much time to bask in the glow of QE infinity. This is pushing yields down on the 10 year, and MBS are up slightly. Volumes should be light today for the Jewish holiday.

The FHFA House Price index increased 3.7% annually in July. This index focuses on Fan and Fred conforming loans, so it is more of a “core” index than Radar Logic or Case-Schiller which are affected by sales at the extremes of valuation.  This index is much more stable – the peak to trough drop for the FHFA index was only 20%, vs. something like 33% for the other indices.

 

Unsurprisingly, Philly Fed President Charles Plosser doesn’t think much of QE Infinity. Plosser hits at the Fed’s credibility in an unusual way – “Conveying the idea that such action will have a substantive impact on labor markets and the speed of the recovery risks the Fed’s credibility.”  It is unusual in that we typically mean “inflation fighting” when we mention credibility.  Plosser is one of the most hawkish members of the Fed. He forecasts the economy will expand by 3% in 2013 and 2014, which is an aggressive forecast, to say the least. 

If noted that actual borrowing rates have not been affected by GE Infinity, even though MBS have moved, you would not be alone. This has been a continuing theme in the press, which brings with it the predictable questions of price gouging.  Part of the problem is that so much capacity has been taken out of the banking sector in the last 5 years that they cannot handle the volume.  Since most of these loans are refis, the banks view this boomlet as temporary and are reluctant to hire for fear that they will end up being overstaffed when rates start rising. 

Real “inside baseball” stuff, but University of Chicago professor Casey Mulligan discusses how our redistributive social safety net is skewing incentives to work, and also challenges Paul Krugman’s “Its the demand, stupid” argument.  

Morning Report 9/25/12

Vital Statistics:

  Last Change Percent
S&P Futures  1454.8 3.4 0.23%
Eurostoxx Index 2553.3 -4.6 -0.18%
Oil (WTI) 92.97 1.0 1.13%
LIBOR 0.364 -0.004 -1.02%
US Dollar Index (DXY) 79.5 -0.015 -0.02%
10 Year Govt Bond Yield 1.71% 0.00%  
RPX Composite Real Estate Index 194.5 -0.2  

Markets are up slightly on no real news. Caterpillar issued a profit warning based a drop in capital expenditures from the miners, which is a bad sign for the world economy, particularly China. Nevertheless, commodities are up this morning. Bonds and MBS are up small.  

The S&P / Case-Schiller index showed a 1.2% annual increase in July. They note the recent strength of the housing market and that inventory is down.  FWIW, the strategist at Radar Logic (the publisher of the RPX index) believes the strength is a head fake due to the large amount of shadow inventory.  One big question regarding shadow inventory is how much has been picked over?  Is the remaining shadow inventory the least salable garbage that nobody wants?  If so, will its liquidation matter that much to prices? How much of it is vacant dilapidated blight in places like Detroit and Toledo, which will never sell and will probably get demolished?

Chart:  Case-Schiller:

 

The Romney campaign has released its plan for the housing market. The most significant departure from the Obama administration is an end to REO-to-rentals.  A President Romney, observing that a ton of money has been raised to invest in resi, would simply sell the property as opposed to using various strategies like REO to rental to keep it off the market.  He would end TBTF Fan and Fred (he doesn’t say how) and he would usher in “sensible, but not overly complex financial regulation to allow banks to approve loans to families with good credit rather than rejecting their mortgage applications.”  I take it the last statement means we will finally learn what the government considers a “qualified mortgage.” Basically, the plan boils down to “hit the bid, stop trying to manipulate the real estate market, and make some decisions on how we are going to regulate the banks.”  

RBS has been implicated in the LIBOR scandal, along with Barclay’s. This time, it looks like RBS was not simply falsely reporting LIBOR during the financial crisis to prevent a bank run, it was doing it over a longer period to benefit positions.  Regulators might let the first case slide; they certainly won’t let the second one.

Yet another unintended consequence of ZIRP – the death of the “free” checking account. 

Flip Flopper in Chief?

I just don’t see how someone with so many different opinions or statements on one subject can realistically believe he can or even should be President.

A quote from Romney’s book “No Apology”;

After about a year of looking at data — and not making much progress — we had a collective epiphany of sorts, an obvious one, as important observations often are: the people in Massachusetts who didn’t have health insurance were, in fact, already receiving health care. Under federal law, hospitals had to stabilize and treat people who arrived at their emergency rooms with acute conditions. And our state’s hospitals were offering even more assistance than the federal government required. That meant that someone was already paying for the cost of treating people who didn’t have health insurance. If we could get our hands on that money, and therefore redirect it to help the uninsured buy insurance instead and obtain treatment in the way that the vast majority of individuals did — before acute conditions developed — the cost of insuring everyone in the state might not be as expensive as I had feared.

It’s not as if this interview with Glenn Beck was while he was in college, it was in 2007.

When they show up at the hospital, they get care. They get free care paid for by you and me. If that’s not a form of socialism, I don’t know what is,” he said at the time. “So my plan did something quite different. It said, you know what? If people can afford to buy insurance … or if they can pay their own way, then they either buy that insurance or pay their own way, but they no longer look to government to hand out free care. And that, in my opinion, is ultimate conservativism.

And in a 2010 interview on Morning Joe he was asked if he believed in universal health coverage and said;

Oh sure. Look, it doesn’t make a lot of sense for us to have millions and millions of people who have no health insurance and yet who can go to the emergency room and get entirely free care for which they have no responsibility, particularly if they are people who have sufficient means to pay their own way.

And then surprise of surprises last night on 60 Minutes he reversed course.

“Well, we do provide care for people who don’t have insurance,” he said in an interview with Scott Pelley of CBS’s “60 Minutes” that aired Sunday night. “If someone has a heart attack, they don’t sit in their apartment and die. We pick them up in an ambulance, and take them to the hospital, and give them care. And different states have different ways of providing for that care.”

h/t Sam Stein & Amanda Terkel

My oldest daughter finally convinced one of her friends to apply for the CA PCIP enacted as part of the ACA. Her friend Sara completely lost the ability to speak and also lost control of many motor skills while in graduate school about three years ago. Her medical insurance expired as she was forced to quit school and was also unemployable. Luckily, her partner was able to support the two of them, but just barely. Sara was unable to purchase health insurance and had no medical diagnosis so was also denied disability.

She has spent the last three years in emergency rooms and trying to get care and a diagnosis through the health department but most tests were denied and no one seemed able to make a diagnosis even though she has gone down hill dramatically in the past three years. At one point the state sent her to a mental health expert as they thought she was making herself sick or something. She now walks with the help of a walker, can no longer drive and barely leaves the house as it’s too much effort.

About a month ago she received her insurance through PCIP and was finally able to see both a GP and the neurologist he sent her to and now has a likely diagnosis and even medication to improve her condition. Her tests were ordered on an emergency status and she was diagnosed with PLS a very rare (only 500 cases in the US) and degenerative form of ALS (Lou Gehrig’s) that is not as deadly or rapidly progressive. There are treatments and while it is debilitating it isn’t a death sentence and can be mitigated while improving her quality of life.

We had a similar experience with our niece who died in 2008. We waited a very long time for her insurance company to approve the tests she needed but the approval never came. Instead she received a notice that her insurance had been terminated. We couldn’t get in to see a neurologist until we could prove we had the money to pay for whatever tests and treatment she might need. We converted our IRA’s to cash and put our rental house on the market but we were too late. While I was on the way to bring her home from Albuquerque to see the neurologist I’d found to treat her she had a seizure and died.

Mitt Romney can’t even seem to figure out if we have an obligation to help people in these circumstances or not.

Morning Report 9/24/12

Vital Statistics:

 

Last

Change

Percent

S&P Futures 

1446.6

-5.3

-0.37%

Eurostoxx Index

2553.6

-23.5

-0.91%

Oil (WTI)

91.84

-1.1

-1.13%

LIBOR

0.367

-0.002

-0.54%

US Dollar Index (DXY)

79.59

0.265

0.33%

10 Year Govt Bond Yield

1.72%

-0.03%

 

RPX Composite Real Estate Index

194.5

-0.2

 

 

Markets are lower after a disappointing German business sentiment survey and some German officials criticized Spanish Prime Minister Rajoy’s foot-dragging on an aid package.  The financial industry jobs bleed continues – after BOA announced it would cut 16,000 jobs late last week, RBS is cutting another 300 and Nomura is reorganizing (read cutting jobs) in its Asian Finance Unit. According to Olivetree financials strategist, this is just the start. Bonds and MBS are up.

The Chicago Fed National Activity Index deteriorated in August, which was the 6th consecutive month activity was below trend. The number came in at – .87, which is below the – .7 mark.  If the 3 month moving average falls below .7, it typically means a recession has already started. FWIW, employment was not the big driver – it was production.

Lennar reported better than expected sales and profits this morning. Stuart Miller characterized the housing market as “The housing market has stabilized and the recovery is well underway.  Low mortgage rates, affordable home prices, increased buyer confidence and an extremely favorable rent-to-own comparison are driving growth in each of our markets.  Additionally, reduced foreclosures and declining distressed home inventory are further contributing to the improvement in the housing market.”  Granted, the homeboys are the biggest cheerleaders of real estate there is, but still…  BTW, KB Homes was up 16.5% on Friday after it reported a good quarter.  LEN is up 4% pre-open.

After the fact, Shelia Bair thinks Hank Paulson’s bazooka was too big.

Saturday Football Open Thread, Week 4 (a.k.a. The Last Week of [Mostly] Meaningless Games)

It’s the last weekend before conference play begins, and I, for one, think that this pre-conference play lasts at least one–if not two–weeks too long.  But then, I’m a fuddy duddy when in comes to collegiate football, and I’d bag the BCS and the playoff system for a return to the traditional five Real Bowl Games (all but one of which began before my parents were born, let alone me, which truly qualifies me for fuddy duddy-hood) played on New Year’s Day.  Hey–you kids!  Outta my stadium!!

Pop quiz:  who can name the original five bowl games without resorting to The Google?

Anyway, to get back on track, Boise State barely squeaked by BYU on Thursday 7 – 6, and I’m not sure if that means that BSU has fallen off of its BCS-busting pedestal or if going independent has made BYU that much better.  I suspect the former.  Once again, LA-Monroe just barely lost to a major conference team when Baylor beat them 47 – 42 last night; if they stick to this form I can’t think of a team in their conference that can slow them down.  What’s what in ATiM world:

UAB is at osu (line: osu, spread 36.0)  This is one of those crazy pre-conference games that just doesn’t really have a good reason for happening.  Maybe a sinkhole will open up midfield and prevent osu from winning, but I’m not holding my breath.  [Update: osu wins 29 – 15]

UTEP is playing Wisconsin (line: UW, spread 16.0)  Go, Badgers!  [Update: UW wins 37 – 26]

Miami (FL) is at Georgia Tech (line: GT, spread 12.5)  Go, Yellow Jackets!  [Update: Miami upsets GT 42 – 36 in OT]

Hapless Eastern Michigan is at MSU (line: MSU, spread 31.5)  I’m still feeling just a tad bitter about last week, but Go State!  [Update: MSU wins 23 – 7]

Idaho State is playing Nebraska (line: Nebraska, spread 0.0)  Another one of those conundrums.  Go Huskers, nonetheless! [Update: I’ve highlighted both teams–see Fairlington Blades’ comment below][Update 2: Nebraska smushes ISU with mega #RomneyStrength, 73 – 7]

Temple vs Penn State (line: PSU, spread 9.0)  Go, Nittany Lions!  [Update: PSU wins 24 – 14]

USF is playing Ball State (line: USF, spread 13.0)  Da Bulls!  [Update: Ball State wins in a upset, 31 – 27]

Cal is at USC (line: USC, spread 16.0)  Why they’re bothering to rank USC when they can’t play in the post-season continues to be beyond me. . . [Update:  see Mike’s comment below][Update 2: USC wins 27 – 9]

The Big Game this week is Michigan vs Notre Dame (line: Notre Dame, spread 6.0)  C’mon, Wolverines, give me some pay-back here!  [Update: Notre Dame in a blowout 13 – 6.  The score doesn’t really reflect how ND absolutely dominated UM]

Kansas State takes on Oklahoma (line: OU, spread 16.0)  What’s that Sooner cheer again, okie??  🙂 [Update: KSU also wins in an upset 24 – 19]

Syracuse is at UMinn in intra-ATiM play (line: Syracuse, spread 1.0)  I’ll let Scott and bsimon duke it out over this one, but it sounds like it should be a good game. [Update: Minnesota 17 – 10]

Utah vs Arizona State (line: ASU, spread 4.0)  I think this one’s a toss-up.  Go, Utes! [Update: ASU in a walk, 37 – 7]

Arizona is playing Oregon(line: Oregon, spread 21.5)  OK, ‘Cats, prove them wrong!  [Update: Oregon 49 – 0. Ouch!]

Off this week are BC, Stanford, and Texas.  This week feels more like the pause before the storm than real football, but here’s hoping all the “right” teams win!  I’ll be out of the loop at a Race for the Cure luncheon for a chunk of the day, so anyone who wants to should feel free to edit this to update scores and provide commentary.

Note to lms:  at least your Angels have a 9% chance of making the playoffs–the Mariners have a 0.0% chance!

Morning Report 9/21/12

Vital Statistics:

Last Change Percent
S&P Futures 1459.3 5.5 0.38%
Eurostoxx Index 2569.4 16.4 0.64%
Oil (WTI) 93.42 1.0 1.08%
LIBOR 0.369 -0.004 -1.01%
US Dollar Index (DXY) 79.11 -0.303 -0.38%
10 Year Govt Bond Yield 1.79% 0.02%
RPX Composite Real Estate Index 194.5 0.0

Markets are higher this morning on no real news.  Today is Triple Witching (the expiration of Sep index options and futures) so sometimes you get funny moves pre-open and on the close. There is no economic data this morning. Bonds are down a few ticks, while MBS are up a few.

KB Home reported good numbers last night, with 16% increase in revenues and a 33% increase in backlog. “It is clear that the recovery in housing is gaining momentum across the country as inventory levels are declining and home prices are on the rise.  In particular we are seeing dramatic improvement in California, where we are the state’s largest homebuilder, as the continued strengthening in the coastal markets is now spreading inland to Sacramento, the Central Valley, and the Inland Empire.”  The stock is up 2.5% pre-open.

While housing is definitely improving here, Europe still has to contend with its slow-motion bank run.  Which means that banks in Spain or Italy have to increase deposit rates to prevent capital from leaving, which naturally gets passed on to borrowers.  Which contracts credit in spite of what the ECB is trying to do.

The Senate is looking into high frequency trading. The regulators are looking into whether HFT increases volatility, which is the wrong question to ask.  The correct question to ask is if they are front-running orders – meaning if you enter your order to buy 200 shares of Apple stock via your Charles Schwab account, does someone see your buy order before it hits the exchange and are they stepping in front of you and buying the stock that is out there in the hopes of selling to you a penny or two higher?  Arbitraging the different exchanges is one thing – front running is another.  To put it in perspective, if I did that as a block trader, I would probably lose my job and maybe my Series 7 license if the regulators found out. This could become a battle royale, because the NYSE loves HFT because it is such a money maker.  And it is a private entity. However as Jack Reed points out, the capital markets are also a public good.  Meh, as much as I used to gripe about the specialists on the floor of the NYSE, they did serve a purpose.  But market-making, at least in the equity markets, is long gone.

Warfare and Technology

I just assumed our technology was superior than the Taliban’s.  And it is.  But that doesn’t necessarily mean better.

A key realization: the enemy uses cheap night vision gear in the form of cameras that have night functions.  When our IR lasers, our IR strobes, our IR illumination or our IR spotlights are radiating, they can easily be seen using cheap digital cameras.  I recently told this to some Norwegian soldiers, who were as surprised as our soldiers to learn it.  I learned this from the enemy, not from our guys.  The Taliban even use smart phone cameras to watch for invisible lasers.  The enemy in Afghanistan has been caught using cameras for night vision.  It is just a stroke of common sense: I have been doing it for eight years since I noticed an IR laser one night in Iraq.

 

Whole thing here.