Eideard

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No, that’s not Cooperman and Schwartz

Click on photo for Leon Cooperman, Marvin Schwartz on topic
[The real conversation starts at 2 minutes into the video]

The best thing to be said of the recent stomach-churning turmoil on Wall Street is that it’s taking place in August, a time of year when many people are lounging at the beach or camping in the woods and not paying attention to stocks…

“Everyone felt this was idiotic,” says Susan Kaplan, president of Kaplan Financial Services, referring to last week’s volatility. “Most clients didn’t want to deal with the markets anymore and went back to their summer vacations,” said Kaplan, whose firm manages about $1.3 billion in customer money…

Thursday brought another August storm. The S&P500 plunged 4.46 percent and the benchmark 10-year Treasury note yield fell below 2 percent for the first time in 70 years. And the trouble is this turmoil may not be some temporary anomaly.

Experts say investors should expect even more volatility in stocks, as herd trading by hedge funds, knee-jerk trader reaction to news and lightning fast computer programs combine to make for a new and uncomfortable normal on Wall Street.

This new trading frontier even has its own signature milepost, something called “a liquidity black hole.” It’s a trading phenomenon in which there’s so much intense selling pressure in big-cap stocks that it sucks all the oxygen out of the market and stocks plunge precipitously – as on August 8 when every single stock in the S&P500 ended the day in the red…

There’s a concern that frenzied trading could drive people further away from stocks at a time when, other than gold, there are few assets generating any kind of substantial return.

And that’s something that could have long-term ramifications for the ability of investors to build retirement nest-eggs, especially given the historic poor ability of retail investors to time market swoons and surges…

Also if investors flee stocks it could make it harder for small, niche companies, such as ones in the biotech or clean energy sectors, to tap the public markets for capital. Or more of those companies might take their capital-raising business overseas to places like Hong Kong, which would be another blow to Wall Street.

I’m fed up for the same reasons Messrs Cooperman and Schwartz declare. High frequency trading adds nothing to the stock market except no sense of direction and qualitatively dangerous volatility. It’s the ultimate in day trading with no one investing in the companies traded and adding value.

The Securities and Exchange Commission, the regulatory body for these shenanigans is doing what they did to prevent the subprime meltdown that gave us the Great Recession. Nothing, nada, nuttin’ honey! They’d rather not risk offending the moneyboys invested in platforms profiting profit for the trading corporations – not investors. But, that’s not what a stock market is for.

Veteran journalist Mark Haines, a fixture on CNBC for 22 years, died unexpectedly Tuesday evening. He was 65 years old.

Haines, founding anchor of CNBC’s morning show “Squawk Box,” was co-anchor of the network’s “Squawk on the Street” program, providing insight and commentary sometimes humorous and occasionally acerbic.

CNBC President Mark Hoffman called Haines a “building block” of the financial network’s programming. Hoffman said Haines died at his home. “With his searing wit, profound insight and piercing interview style, he was a constant and trusted presence in business news for more than 20 years,” Hoffman said in a statement to CNBC employees. “From the dotcom bubble to the tragic events of 9/11 to the depths of the financial crisis, Mark was always the unflappable pro.

“Mark loved CNBC and we loved him back. He will be deeply missed.”

Haines may be best remembered for his calming and commanding presence during the 9/11 tragedy when he reacted unflappably to the furious stream of incoming rumor and even more astonishing truth with a professionalism that rivaled any television anchor, said CNBC senior economics reporter Steve Liesman…

Haines served as a news anchor for KYW-TV in Philadelphia, WABC-TV in New York, and WPRI-TV in Providence, before joining CNBC.

Haines held a law degree from the University of Pennsylvania Law School and was a member of the New Jersey State Bar. In 2000, he was named to Brill’s Content’s “Influence List.”

His death quickly reverberated through the financial community…

Traders at the normally bustling New York Stock Exchange paused for a moment of silence…

Haines was known for a lawyer-like determination to get at the truth, pressing guests for answers if they tried to avoid his pointed questions. CNBC reporters and anchors remembered Haines holding them up to the same standard…

I’m an old fart who didn’t get serious about investing till this last Great Recession pissed me off. Between incompetent mutual fund managers and the ever-increasing blather of “news” channels – I found myself watching the two professional financial channels to see what was going on in the real world.

Tears fill our eyes, sadness our hearts. He will be missed.

Regulators should stem the growing tide of anonymous stock-trading and consider imposing fees on high-frequency traders, said a panel of experts advising how to avoid another “flash crash.”

The panel’s 14 recommendations for U.S. securities and futures regulators contained far-reaching ideas to overhaul the high-speed electronic market. Yet many of the ideas issued on Friday called only for “consideration” or “further study” — potentially raising more questions as the first anniversary of the May 6 flash crash nears.

“I don’t think it’s possible to prevent another one from happening,” said Adam Sarhan, chief executive of Sarhan Capital in New York…

The unprecedented May 6, 2010, market crash sent the Dow Jones industrial average down some 700 points before rebounding, all in a matter of minutes. It rattled investors, exposed flaws in the structure of markets, and set regulators on a mission to fix the system and restore confidence.

Since then, individual stocks have experienced what some refer to as “mini” crashes, where shares unexpectedly move on a sudden burst of volume, absent of any news…

“What market regulation now has to do is limit uncertainty,” said Maureen O’Hara, professor of finance at Cornell University and member of the flash crash panel. “You limit uncertainty by limiting the amount of movement a price can have before it falls off the map…”

Some of the recommendations, such as expanding and modifying the “circuit breaker” trading pauses, had been anticipated and mostly endorsed by traders and exchanges such as NYSE Euronext and Nasdaq OMX Group…

Following the flash crash, some lawmakers called for a crackdown on traders who use algorithms to execute complex trading strategies across markets.

But the panel’s report focused on structure and liquidity issues, and did not blame high-frequency trading, said Overdahl, who is also an advisor to the Futures Industry Association’s Principal Traders Group, which includes some of the largest high-frequency traders in the market.

Even if you’re not an investor you should RTFA. The consequences of something like the uncontrolled – and barely understood – Flash Crash could conceivably shove us into another recession for no reason other than an endless loop in corrupted software.

Not to mention corrupt practices by financiers.