I am traveling this morning will look at ISM and other data this afternoon. Meanwhile here a a few quick hits on propriety trading, bizarre charts of robo trader patterns, walking away from boats, Blogger fees in Philadelphia, birth rate demographics, and other potpourri.
JPMorgan to Shut Proprietary Trading Unit over Volcker Rule
Bloomberg Reports JPMorgan Said to Shut Proprietary Trading to Meet Volcker Rule
JPMorgan Chase & Co., the second- largest U.S. lender by assets, told traders who bet on commodities for the firm’s account that their unit will be closed as the company begins to shut down all its proprietary trading, according to a person briefed on the matter.
The bank eventually will end all proprietary trading to comply with new curbs on investment banks, said the person, who asked not to be identified because JPMorgan’s decision isn’t public. The New York-based bank will shut proprietary trading in fixed-income and equities later, the person said.
Closing the prop trading desk for commodities affects fewer than 20 traders, including one in the U.S. and the rest in the U.K., the person said.
This is a baby step in the right direction.
Developer Sells Zero of 141 Luxury Condos
The Press Enterprise reports Lack of sales spurs developer to lease
After two months of marketing his 141 luxury condos with not one sale, Mark Rubin said he has given up wooing buyers to the Raincross Promenade project in downtown Riverside that cost him $40 million to build.
Prospective buyers kept trying to beat down his prices, even after he shaved $30,000 off the initial list prices ranging from $240,000 for a one-bedroom, one-bath condominium to $475,000 for a two bedroom, 2 ½-bath townhouse. “There were no sales,” Rubin said. “Everyone wants a bargain. They read about foreclosures and think they can buy for distress prices.”
Rubin paid cash for the property and is now looking to lease units.
Walking Away From Boats
The USA Today reports Abandoned boats litter waters in tough economy
States across the USA are taking steps to deal with an armada of derelict boats abandoned by their owners in a tough economy:
In Massachusetts,Democratic Gov. Deval Patrick signed a bill this month that gave local governments the power to seize abandoned vessels. The problem was growing faster than the state’s ability to deal with it, says Michael Nichols, legal counsel to Democratic state Rep. Antonio Cabral, who introduced the bill.
“The recession was affecting people’s ability to keep and maintain a boat,” Nichols says. “To have abandoned vessels taking up valuable space in the marinas and harbors was a problem.”
Fines for abandoning boats in state waters vary. In Massachusetts, it’s $10,000. In South Carolina: $475.
In the San Francisco Bay Area, as many boats were reported abandoned by the Coast Guard in the first quarter of 2009 as in all of 2008, says Deb Self, executive director of San Francisco Baykeeper, an environmental group. The number of eyesores, many of them leaking fuel and chemicals, continued to grow this year, from 64 in February to 76 this month, even after 12 boats were hauled away, Self says.
Twelve states, including Kansas, Missouri and Tennessee, have passed laws on abandoned boats in the past five years, according to the National Conference of State Legislatures. Most streamline the process of taking title and disposing of boats when owners cannot be found.
If you are going to walk away from your boat, do it in South Carolina, not Massachusetts which has a $10,000 fine. Better yet, donate the thing or haul it to the dump.
Birth Rate Drops Second Year
Physorg reports Recession may have pushed US birth rate to new low
The U.S. birth rate has dropped for the second year in a row, and experts think the wrenching recession led many people to put off having children. The 2009 birth rate also set a record: lowest in a century.
Births fell 2.7 percent last year even as the population grew, numbers released Friday by the National Center for Health Statistics show. “It’s a good-sized decline for one year. Every month is showing a decline from the year before,” said Stephanie Ventura, the demographer who oversaw the report.
The birth rate, which takes into account changes in the population, fell to 13.5 births for every 1,000 people last year. That’s down from 14.3 in 2007 and way down from 30 in 1909, when it was common for people to have big families.
“It doesn’t matter how you look at it – fertility has declined,” Ventura said.
The situation is a striking turnabout from 2007, when more babies were born in the United States than any other year in the nation’s history. The recession began that fall, dragging stocks, jobs and births down.
The US looks more Japanese every month.
Philadelphia Imposes $300 Blogger License Fee
The Washington Examiner reports Philly requiring bloggers to pay $300 for a business license
Between her blog and infrequent contributions to ehow.com, over the last few years she says she’s made about $50. To [Marilyn] Bess, her website is a hobby. To the city of Philadelphia, it’s a potential moneymaker, and the city wants its cut.
In May, the city sent Bess a letter demanding that she pay $300, the price of a business privilege license.
“The real kick in the pants is that I don’t even have a full-time job, so for the city to tell me to pony up $300 for a business privilege license, pay wage tax, business privilege tax, net profits tax on a handful of money is outrageous,” Bess says.
When Bess pressed her case to officials with the city’s now-closed tax amnesty program, she says, “I was told to hire an accountant.”
To say that these kinds of draconian measures are detrimental to the public discourse would be an understatement.
The Broad Street Hockey Blog comments on City of Philadelphia Charging Bloggers
We don’t get into politics on this blog often. In fact, I don’t believe we ever have. This, however, is an issue that could directly impact this blog and, honestly, any one of you.
When I started blogging two years ago, I wouldn’t have been able to afford a $300 fee. Yet at the same time, I needed to keep ads on my pre-SBN site to earn enough to cover the server costs and the domain registration. None of the money went into my pocket. It wasn’t a lot of money and the small ads were enough to cover costs, but without them, I wouldn’t have been able to run the site.
By enforcing this law on bloggers who make little-to-no-money off of their sites, the City of Philadelphia is robbing its citizens of the opportunity to create. It’s robbing them — and the city itself, really — at a change to innovate.
Philadelphia is amazingly desperate. Any city that would take this action is clearly in deep trouble.
401K withdrawals spike
CNN Money reports 401(k) Withdrawals Spike
Hardship withdrawals from 401(k) retirement saving plans rose to the highest level in 10 years during the second quarter, Fidelity Investments said on Friday, in the latest sign of a dismal economy.
Fidelity reported that, as of the second quarter, 2.2% of all 401(k) participants had made a hardship withdrawal at some point over the preceding 12 months. That’s up from 2% in the prior year, and was the highest level in 10 years.
At the same time, the percentage of 401(k) participants that had an outstanding loan from their account rose to a record high of 22% in the second quarter. The average loan amount was $8,650 at the end of the quarter.
Borrowing against IRAs to meet unsustainable lifestyles or to pay mortgages on underwater homes are both horrendous ideas.
Market Data Firm Spots the Tracks of Bizarre Robot Traders
The Atlantic says Market Data Firm Spots the Tracks of Bizarre Robot Traders
Mysterious and possibly nefarious trading algorithms are operating every minute of every day in the nation’s stock exchanges.
What they do doesn’t show up in Google Finance, let alone in the pages of the Wall Street Journal. No one really knows how they operate or why. But over the past few weeks, Nanex, a data services firm has dragged some of the odder algorithm specimens into the light.
No matter why the bots end up executing these behaviors, the Nanex charts offer a window onto a kind of market behavior that’s fascinating and oddly beautiful. And we may never have seen them, if not for the mildly obsessive behavior of one dedicated nerd.
“Who looks at millisecond charts?” Donovan said. “You’d never see those patterns in any other fashion. The SEC and CFTC certainly weren’t.”
Here are a few more bots at work with explanations of what’s going on.
Here we see a “flag repeater” being executed on the BATS Exchange, the third-largest equity market after the NYSE and NASDAQ. 15,000 quote requests were made in 11 seconds in a repeating pattern. Each iteration upped the quote a penny until $9.36, and then the algorithm went down the same way, a penny at a time.
This chart shows a different kind of strategy. It represents 56,000 quotes in one second all at the same price (the top chart) but with the size of the order increasing by one (i.e. 100 shares) all the way up to 40,000.
There are several other interesting patterns in the article, some with explanations of what they mean. Does anyone think this serves an legitimate purpose? If so what purpose?
Mike “Mish” Shedlock
Click Here To Scroll Thru My Recent Post List