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While No One Was Looking, Congress Took A Huge Step Toward Fixing The Economy

Deregulation: Former FBI director James Comey‘s testimony before the Senate Intelligence Committee was the fixation of Washington on Thursday. But the big story was on the House side of Congress, which passed a bill to repeal the ruinous Dodd-Frank banking law.

The Financial Choice Act, approved in the House by a 233-to-186 vote (no Democrats voted for the bill), has generated almost zero attention. But it has the potential to be the most economically beneficial legislation Congress will consider this year.

Put simply, Dodd-Frank has been a complete failure. Signed into law by President Obama almost seven years ago in the wake of the financial crisis, this massive law was supposed to, in his words, “be good for the economy … foster innovation … stop taxpayer bailouts once and for all.”

It has lived up to zero of those promises.

Dodd-Frank’s 22,000 pages of regulations, which cost $36 billion to comply with in the first six years, has choked competition in the banking industry, made banking more expensive, harmed economic growth and, to top it off, failed to make the banking system safer or end “too-big-to-fail.”

Since Dodd-Frank became law, for example, more than 1,700 banks have disappeared — more than one a day, on average. The banking industry got more concentrated.

Left in place, Dodd-Frank will cut the nation’s GDP by nearly $900 billion by 2025, according to the American Action Forum. Read the rest of this entry »

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Hong Kong and China Stocks Decline in Monday Morning Trading 

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The Hang Seng Index was down 0.77 per cent or 168.87 points to 21,851.88 on Monday morning session close.

Shares in Hong Kong and mainland China declined at the mi-day trading pause, following retreats in most Asian equity markets as rate increases announced last week by the US Federal Reserve and Hong Kong Monetary Authority lead to capital outflow back to American shores.

The Hang Seng Index fell 168.87 points, or by 0.8 per cent, to 21,851.88, while the Hang Seng China Enterprises Index dropped 1 per cent to 9,374.09. The CSI 300 Index fell 0.2 per cent to 3,339.42.

“With the higher rates in US,Hong Kong stocks could be under pressure as capital could flow out of Hong Kong ,” said Ben Kwong Man-bun, executive director of KGI Asia.

China bond-market selloff shows risks of Beijing’s efforts to restrain credit

China bond-market selloff shows risks of Beijing’s efforts to restrain credit

Insurers led losses among Chinese companies on the Hang Seng China Enterprises Index, amid concerns that mainland regulators will further place their market investments under scrutiny.

Ping An Insurance Group Co. fell 1.7 per cent to a four-month low of HK$39.75 while AIA Group Ltd fell 1.5 per cent to HK$43.75.

China Vanke Co. fell in Shenzhen and Hong Kong after the country’s largest property developer scrapped a white knight rescue plan involving Shenzhen Metro, which was intended to help defend it from a hostile takeover.

[Read the full story here, at South China Morning Post]

Vanke shares fell by as much as 6.3 per cent, closing 4.5 per cent lower at HK$18.48 during the lunch pause. In Shenzhen, Vanke’s shares fell as much as 5.3 per cent, dropping 4.7 per cent to 21.40 yuan.

The Shanghai Composite Index dropped 0.1 per cent to 3,119.65. The Shenzhen Component index dropped 0.26 to 10,307.48, while the Shenzhen Composite Index declined 0.21 per cent to 1,987.49.

The Nasdaq style ChiNext closed 0.60 per cent lower at 1,986.22.

China’s monetary policy will be pursued in a “neutral” manner in the coming year, a departure from last year’s “flexible” stance, according to an analysis by Macquarie Capital’s Larry Hu, parsing the Communist Party’s Central Economic Work Conference last Friday. Read the rest of this entry »


Paul Krugman Says Markets Will ‘Never’ Recover From Trump; Dow Hits Record High

krugman

‘When will markets recover? Never.’

Blake Neff reports: New York Times opinion writer and economist Paul Krugman predicted early Wednesday morning that the stock market will “never” recover from Donald Trump’s presidential victory, only to be proven spectacularly wrong in less than a day. Instead of collapsing, the Dow Jones Industrial Average surged to an all-time high shortly before the closing bell.

“It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover? If the question is when markets will recover, a first-pass answer is never.”

Futures markets imploded Tuesday night as soon as it became apparent Trump was likely to win. At their nadir, futures for the Dow Jones Industrial Average had dropped 750 points.

“We are very probably looking at a global recession, with no end in sight. I suppose we could get lucky somehow. But on economics, as on everything else, a terrible thing has just happened.”

— Paul Krugman

At that point, Krugman chose to release a blog post in which he predicted these jitters represented a new permanent reality in the U.S. economy. Read the rest of this entry »


Fear & Loathing: S&P 500’s 9-Day Losing Streak Longest Since December 1980

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The S&P 500 index finished lower on Friday for the ninth-straight session, its longest stretch of declines since December 1980. Stocks rose after the open as investors digested a strong report on October jobs growth. But they soon erased their gains as uncertainty surrounding next week’s presidential election rattled markets.

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The S&P 500 SPX, -0.17% fell 3.44 points, or 0.2%, to 2,085.22, with consumer staples shares seeing the largest drop. The Dow Jones Industrial Average shed 41.84 points, or 0.2%, to 17,888.83, with Procter & Gamble Company PG, -1.76% and Travelers Companies Inc. TRV, -0.99% emerging as the biggest losers on the blue-chip gauge. Read the rest of this entry »


[VIDEO] REWIND: ‘The Big Short’ and the 2008 Financial Crisis 

The arrival of The Big Short in 2015 – available on streaming services now – and its subsequent nominations at the 88th Academy Awards, has reignited interest in the causes of the 2008 financial crisis.

[Armond White Reviews The Big Short]

The film would have you think that private greed on Wall Street and a lack of regulation caused the economic crash. While stories like this might make for a fun movie, The Big Short fails to align with the facts.

the-big-short-review

[The Big Short Spins Historical Lead into Oscar Gold]

Learn more about the 2008 financial crisis in Peter’s book “Hidden in Plain Site: What Really Caused the World’s Worst Financial Crisis and Why It Could Happen Again


Tighter Monetary Policy Signal Spooks Markets, Global Stock Selloff Continues

Loose Money Party Peaks, Hangover Anticipation Looms.

Rica Gold reports: Global stocks started the week sharply lower amid concerns about tighter monetary policy, resuming declines that have halted two months of calm summer trading.
millen-anguish

“Central banks get most of the credit for the calm and upward-moving market over the summer, but I don’t think we can depend on that going forward.”

— Jeff Layman, chief investment officer at BKD Wealth Advisors

Markets in Europe and Asia retreated Monday amid signs the world’s central banks will be less accommodative than previously expected.APPROVED-non-stop-panic

“Bourses in Asia closed with steep declines, with shares in Hong Kong off around 3.3%, Shanghai down 1.9%, Japan down 1.7% and Australia down 2.2%.”

“Central banks get most of the credit for the calm and upward-moving market over the summer, but I don’t think we can depend on that going forward,” said Jeff Layman, chief investment officer at BKD Wealth Advisors.

The Stoxx Europe 600 shed 1.9% early in the session, while futures pointed to a 0.6% opening loss for the S&P 500 after its biggest daily drop since the U.K.’s EU referendum.

Bourses in Asia closed with steep declines, with shares in Hong Kong off around 3.3%, Shanghai down 1.9%, Japan down 1.7% and Australia down 2.2%.

The Federal Reserve Building in Washington, U.S. There are heightened expectations for an interest rate rise by the Fed later this year.

The Federal Reserve Building in Washington, U.S. There are heightened expectations for an interest rate rise by the Fed later this year. Photo: Reuters

Stocks and long-dated government bonds sold off on Friday after comments from Federal Reserve Bank of Boston President Eric Rosengren heightened expectations for an interest rate rise later this year. Read the rest of this entry »


Circuit Breaker! China Halts Stock Market Fall 

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Yifan Xie and Shen Hong report: China’s stock market regulator announced last month that come the New Year it would introduce a circuit breaker–a forced pause to trading–if shares fell too precipitously. On the first trading day of the year, officials had to reach for the newly installed system, twice.

 “The U.S. adopted the circuit breaker system in 1988, and it was only triggered once. The history of China’s circuit breaker is one day, and we’ve triggered it twice.”

An index of the 300 biggest stocks listed in Shanghai and Shenzhen plunged Monday, triggering the circuit breaker and leading first to one 15-minute pause in trading and then a second halt, which closed the markets for the remainder of the day 80 minutes earlier than scheduled.

“Excessive interference with trading will affect market efficiency and become counter-productive.”

— Chief economist Lin Caiyi

The markets opened in negative territory and stayed there as a flurry of bad news arrived: a weaker-than-expected gauge of manufacturing activity and a further slide in the value of the country’s currency. Adding to the bearish mood are worries among investors about the lapse this Friday of a six-month ban on selling shares by major shareholders–those holding 5% stakes or larger in a listed company. The ban was imposed in July last year to stem a meltdown in the stock markets, and its end may lead to more selling.

An investor at a brokerage firm in the Chinese city of Heifi on Wednesday. Individual investors who began selling in mid-June helped unleash a downward spiral of more selling. Photo: Reuters

Markets turned critical 12 minutes into the afternoon session, as the CSI 300 Index fell 5%, prompting the 15-minute suspension. Six minutes after trading resumed, at 1:27 p.m.,the hemorrhaging continued. The CSI 300 index dived further, hitting a 7% limit and bringing the trading day to an end.

[Read the full story here, at China Real Time Report – WSJ]

At the close at 1:34 p.m, the Shanghai Composite Index slumped by 6.9% at 3296.66, and the smaller Shenzhen Composite Index shed 8.2% at 2119.90.

Caught off guard by the plunge, traders speculated that the securities regulator was conducting a test of the new circuit breaker mechanism. Read the rest of this entry »


Debt Distress Level at Highest Since Recession

Sparkly-Obama-Unicorn-Gold-Coins

The number of companies with the lowest credit ratings and negative outlooks jumped to 195 in December, the highest level since March 2010, says Standard & Poor’s.

Matt Krantz reports: Nomura Head of U.S. Rates Strategy George Gonclaves discusses Fed policy and the U.S. economy. He speaks on “Bloomberg Surveillance.” Bloomberg

Higher interest rates are about to hit companies – just when many are ill prepared to handle them.

obama-money

The Federal Reserve this month took interest rates up for the first time in nearly a decade – ending the days of free money. It might take a few years for higher rates to hit companies – as they look to refinance debt. But the troubling part is many companies aren’t in great shape to eat the higher costs.

The number of companies with the lowest credit ratings and negative outlooks jumped to 195 in December, the highest level since March 2010, says Standard & Poor’s. The biggest culprit for the jump in these so-called “weakest links” is the oil and gas sector, which accounts for 34 of them. But financial companies are close behind, representing 33 of the weakest links, says S&P….(read more)

Source: USAToday


Apple is Having its Worst Year Since the Financial Crisis

APPL is still on track to log its worst performance in six years.

 reports: Apple has done better than the broader market this year, rising 1.5 percent while the S&P 500 has fallen more than 2 percent.

“Some of the bloom is off the rose. I think that’s a little bit unfair. We still think it’s a great story, we still think its going to have a good six months, but some of the excitement and momentum traders have backed off, probably in part because of a risk-off general attitude in the markets.”

However, the stock is still on track to log its worst performance in six years.

In 2008, Apple shares fell more than 50 percent. Since then, the stock has consistently risen 5 percent or more.

“We tend to see a little bit of a trail down in Apple going into earnings, we tend to see people be worried. And then we see the shares strengthen after the earnings are reported.”

Max Wolff, chief economist at Manhattan Venture Partners, said the stock’s lackluster performance this year is likely due to concern about the completion of the Apple car, sales of the new Apple watch and more risk-averse investors.

“Some of the bloom is off the rose,” Wolff said Friday on CNBC’s “Trading Nation.” “I think that’s a little bit unfair. We still think it’s a great story, we still think its going to have a good six months, but some of the excitement and momentum traders have backed off, probably in part because of a risk-off general attitude in the markets.”

However, Wolff said Apple’s third-quarter earnings report, which is scheduled for Oct. 27, could bring some of that excitement back. Read the rest of this entry »


Dow, Nasdaq Plunge 3% into Correction

drudge-stock-dow
U.S. stocks closed deep in the red on Friday as global growth concerns accelerated selling pressure to push the Dow and Nasdaq into correction territory.
The major averages had their biggest trade volume day of the year and posted their worst week in four years.

The Dow Jones industrial average closed at session lows, off nearly 531 points and in correction territory for the first time since 2011 as all blue chips declined. The last time the index closed more than 500 points lower was on Aug. 10, 2011. In the last five years, the index has only had four instances with closing losses of more than 400 points.

gettyimages-460807232

“For investors the momentum and the drive of the market is now lower (than) it used to be because there’s no place to hide,” said Lance Roberts, general partner at STA Wealth Management. “Every time we hit the major technical points we kept selling.”

A trader noted that investors stopped looking at technicals and were plowing through them.

“It’s an expiration day and it looks like they’re to have for sale on the close maybe as much as a billion dollars,” said Art Cashin, director of floor trading for UBS.

The Nasdaq Composite lost 3.5 percent, also closing in correction territory and joining the other major averages in negative territory for the year.

Apple declined 6 percent, in bear market territory, and the iShares Nasdaq Biotechnology ETF (IBB) plunged 3.1 percent.

“Right now there is a feeling of fear in the marketplace and all news is interpreted negatively and it’s interpreted indiscriminately,” said Tom Digenan, head of U.S. equities as UBS Global Asset Management…(read more)

Read the rest of this entry »


U.S. Stocks Drop on Media Meltdown

market-panic-media

Fears of ‘cord-cutting’  jolt stocks of traditional media firms.

Austen Hufford And Saumya Vaishampayan report: Stocks slumped on Thursday in a selloff led by shares of media companies, which have reported a flurry of disappointing earnings amid concerns about the shift away from traditional television.

“Media stocks are getting slaughtered. It’s been the long-running fear that we would eventually see cord-cutting. Everyone thought it would be a slow-moving train wreck, but Disney’s comment woke people up.”

— Aaron Clark, a portfolio manager at GW&K Investment Management

A 15% decline in Viacom Inc. dragged down the Nasdaq Composite Index, which was 1.9% lower at 5044. Before the opening bell, the media giant reported a decline in second-quarter profit and revenue, fueling worries that more consumers are cutting the cable cord and turning to the Internet for their viewing.

Kitchen-Planet

Shares of Walt Disney Co. tumbled for a second day after Chief Executive Robert Iger late Tuesday noted subscriber losses at ESPN.

That again weighed on the Dow Jones Industrial Average, which declined 154 points, or 0.9%, to 17386.77. The S&P 500 fell 1% to 2079.

Disney was down 4.8% on Thursday after falling 8.4% Wednesday. 21st Century Fox Inc. declined 11% after lowering its expectations for full-year profit for fiscal 2016.

Picture showing the logo of the NBC Tele

“Media stocks are getting slaughtered,” said Aaron Clark, a portfolio manager at GW&K Investment Management, which manages $25 billion in assets. “It’s been the long-running fear that we would eventually see cord-cutting. Everyone thought it would be a slow-moving train wreck, but Disney’s comment woke people up.”

[Read the full text here, at WSJ]

Thursday’s losses come against the backdrop of tepid growth in the U.S. and around the world. Many investors are also concerned that elevated valuations on some stocks aren’t supported by earnings growth.

As well, investors are skittish ahead of the July U.S. jobs report, due out Friday, as they try to gauge the path of interest rates in the U.S. Read the rest of this entry »


NOW WHAT DO WE DO? Americans Have Completely Stopped Signing Up for #Twitter

LiberalsDestroyEarth

Twitter must look abroad for ever-important user growth

Twitter on Tuesday posted second quarter earnings of $0.07 per share, beating expectations of $0.04 per share. That good news sent Twitter’s stock up over 4% in after-hours trading early Tuesday afternoon.APPROVED-non-stop-panic

But Twitter’s full earnings presentation reveals something else interesting about the service: Americans have pretty much stopped signing up for it.

The number of new American Monthly Active Twitter Users has been gradually getting smaller for a while now, even flatlining once before at the end of last year. Now that’s happened for a second time, with no new U.S. user growth from Q1 2015 to Q2 2015:

screen-shot-2015-07-28-at-4-09-47-pm Read the rest of this entry »


Volatility, Chaos, Panic, Despair: Greeks Freak

greel-freak-brietbart

Sarkis Zeronian reports: The value of the euro compared to major peer currencies is already dropping as the financial effects of the Greek ‘No’ vote in Sunday’s referendum filter into the global market. With analysts predicting banks facing funding crises and individuals unable to take their money from ATMs, volatility is set to reign for some time.

“It was not the only currency to lose value. The Aussie fell 0.9 per cent to 74.52 U.S. cents, the first time it’s broken 75 cents since 2009, and New Zealand’s dollar slipped 0.6 per cent.”

Bloomberg reports analysts are tipping the investment winners in the situation to be Treasuries and German bunds, benefiting from a “flight to safety”.

“This was also related to regional difficulties involving China where initial public offerings were suspended, as brokerages pledged to buy shares and the state media tried to limit investor panic as officials intensified efforts to stop the steepest plunge in equities the country has seen since 1992.”

With currencies trading throughout the day, the euro began to fall as soon as the outcome of the referendum became clear, even with most traders in Tokyo and Hong Kong yet to reach their desks. The drop is said to herald the start of what is expected to be a volatile week for global financial markets as institutions such as JPMorgan Chase & Co say Greece exiting the eurozone is now the base-case scenario.

The euro lost 1.1 per cent to $1.0992 by 6:12 a.m. Tokyo time, its weakest level since 29 June, also slipping 1.7 per cent against the yen and 1 per cent versus the pound. Greece may only account for less than 2 per cent of eurozone output, but a ‘Grexit’ risks setting a precedent of reversible membership.

It was not the only currency to lose value. The Aussie fell 0.9 per cent to 74.52 U.S. cents, the first time it’s broken 75 cents since 2009, and New Zealand’s dollar slipped 0.6 per cent. This was also related to regional difficulties involving China where initial public offerings were suspended, as brokerages pledged to buy shares and the state media tried to limit investor panic as officials intensified efforts to stop the steepest plunge in equities the country has seen since 1992. Read the rest of this entry »


PANIC: U.S. Stocks Lose Sense of Humor

stock-tumble

The decline in oil prices has proved a mixed blessing for stocks in recent months. Though it has led to lower gasoline prices and boosted the fortunes of ordinary consumers, the slide has also curbed profits within the once-booming energy sector, which makes up a growing piece of the U.S. economy amid resurgent domestic oil production.

The Dow industrials tumbled more than 300 points Monday, kicking off the new year on a sour note as a renewed slide in oil prices sent energy shares sharply lower.

The Dow Jones Industrial Average fell 329 points, or 1.9%, to 17504 in late afternoon trading. The S&P 500 index slid 37 points, or 1.8%, to 2021.

“Oil is first and foremost on everybody’s mind. People are thinking if it’s going to $40, where does that leave the economy?”

— Jesse Lubarsky, senior vice president and equity trader at Raymond James in New York

The Nasdaq Composite Index declined 73 points, or 1.6%, to 4654.

Monday’s losses began at the opening bell and picked up steam as oil prices plumbed new lows, with beleaguered shares of energy companies leading the push lower. U.S. oil prices fell below $50 a barrel for the first time in nearly six years Monday, sending shares of S&P 500 energy companies tumbling nearly 4%.

The euro tumbled to a nine-year low Monday as new worries flared over Greece, where a woman in Athens passed a currency-changing business. Associated Press

The euro tumbled to a nine-year low Monday as new worries flared over Greece, where a woman in Athens passed a currency-changing business. Associated Press

“It seems like everyone is taking a step back instead of running into the new year,” said Viren Chandrasoma, managing director of equity trading at Credit Suisse . “There hasn’t been a real buying-on-the-dip mentality today.”

The decline in oil prices has proved a mixed blessing for stocks in recent months. Though it has led to lower gasoline prices and boosted the fortunes of ordinary consumers, the slide has also curbed profits within the once-booming energy sector, which makes up a growing piece of the U.S. economy amid resurgent domestic oil production.

“Oil is first and foremost on everybody’s mind,” said Jesse Lubarsky, senior vice president and equity trader at Raymond James in New York. “People are thinking if it’s going to $40, where does that leave the economy?”

Despite Monday’s rout, Wall Street trading desks said activity was relatively light given the scale of the move lower. Rather than sell en masse, many investors started the new year with a more cautious posture following double-digit gains in major indexes last year. Read the rest of this entry »


Obama: Okay, Maybe This Wasn’t the Best Week To Fundraise on Economic Good News

Image source: Mad Magazine

Image source: Mad Magazine


Here, Hold My Drink While I Count My Money: Number of Billionaires Hits Record High

moneyocare

The combined wealth of the world’s billionaires increased by 12 percent to $7.3 trillion, higher than the combined market capitalization of all the companies that make up the Dow Jones Industrial Average

For CNBC reports: The world economy is going through a rough patch, yet the world’s billionaire population is at an all-time high.

money-bags

“The fastest growing segment of the billionaire population, in terms of wealth source, are those who inherited only part of their fortunes and became billionaires through their own entrepreneurial endeavors.”

A new survey shows that 155 new billionaires were minted this year, pushing the total population to a record 2,325 – a 7 percent increase from 2013.

Joker-billionaire-burning-money

Credit goes to the United States – home to the most billionaires globally – where 57 new billionaires were recorded this year, according to the Wealth-X and UBS Billionaire Census 2014 released on Wednesday.

obama-toast

Asia and Latin America and the Caribbean were also large contributors, with 52 and 42 new entrants, respectively.

“The fastest growing segment of the billionaire population, in terms of wealth source, are those who inherited only part of their fortunes and became billionaires through their own entrepreneurial endeavors,” the report said, noting that 63 percent of all billionaires’ primary companies are privately held. Read the rest of this entry »


[VIDEO] Fireworks Filmed With a Drone

Fantastico! Flying through a firework show with a DJI Phantom 2 and filming it with a GoPro Hero 3 silver. The quad was not damaged. Here’s one in HD.


Stocks Unravel After factory Report; Dow sinks 325 points

drudge-325CNBC‘s  reports:  U.S. stocks were battered on Monday, with benchmark indexes falling through key support levels after a gauge of factory activity disappointed, heightening concern about the economy before Friday’s monthly jobs report.

Stocks had wavered ahead of the report that had U.S. manufacturing expanding at a substantially slower pace in January, driving overall factory activity to an eight-month low.

“A report like this scares people ahead of the payroll number on Friday,” said Andres Garcia-Amaya, global market strategist at J.P. Morgan Funds, who added the report’s soft new orders component was of particular concern.

Read the rest of this entry »


Who to Thank for Increased Income Inequality?

obama_Obama_Barack

You’re welcome

Jeffrey H. Anderson writes: President Obama has declared his renewed commitment to fighting income inequality. But we now have five years of evidence to draw upon, and it’s clear that Obama’s methods in this regard have failed miserably. In fact, they’ve worked about as well as Obamacare.

Obama’s approach to addressing income inequality, of course, is to funnel ever more money and power to Washington, while promoting a culture of cozy cronyism between Big Government and Big Business (especially Big “Green” Business). When having a well-positioned team of Washington lawyers and lobbyists becomes a necessary prerequisite to getting ahead, that’s hardly conducive to Main St. prosperity.

The utter failure of Obama’s trickle-down-government approach is perhaps best captured by two contrasting stats. When he took office, we were a full year into a major recession. Economically, there was almost nowhere to go but up. And, indeed, that’s what the Dow Jones Industrial Average, which tracks the stock prices of 30 very large companies, has done: gone up. In January 2009, the Dow was at about 8,000. It’s now at about 16,000. It has essentially doubled on Obama’s watch.

Read the rest of this entry »


Dollar Slips as Fed Worries Continue

Expectations that the Federal Reserve will have to keep its easy-money policies in place for longer following the partial U.S. government shutdown pushed the dollar close to its lowest point of the year against the euro and U.S. Treasury debt prices to their highest point since July.

Yields on the 10-year Treasury note, which move inversely to prices, were down to 2.55%, while the dollar continued its slide against the euro, which rose to $1.3695 from $1.3675 late Thursday in New York, edging closer to this year’s high of $1.3711 reached on Feb. 1. The dollar fell further against the pound, which traded just above the $1.62 level for the first time in two weeks, and resumed its drop against the yen, fetching ¥97.65 from ¥97.93.

About three hours before the start of trading, U.S. futures pointed to a relatively subdued open on Wall Street, where stocks staged a late-session comebackThursday that helped push the S&P 500 to a record close of 1733.15. The front-month contracts for the Dow Jones Industrial Average and the S&P 500 were both up 0.1%, at 15331.00 and 1729.80, respectively. Changes in futures don’t always accurately predict early market moves after the opening bell.

Read the rest of this entry »


Can charities accurately measure their effect on society?

Harlem’s Promise Academy graduates all its disadvantaged students, making it a cost-effective investment for the Robin Hood Foundation.

Harlem’s Promise Academy graduates all its disadvantaged students, making it a cost-effective investment for the Robin Hood Foundation. MARY ALTAFFER/AP PHOTO

Guy Sorman writes: On October 19, 1987, the Dow Jones Industrial Average plunged 22.6 percent, a single-day loss unequaled before or since on Wall Street. To most observers, the Black Monday crash came without warning and remained deeply mysterious ever after. The stock market, many concluded, was like the weather: from time to time, an unpredictable convergence of phenomena would have catastrophic effects.

Yet at least one man believed that the crash was coming. In Greenwich, Connecticut, money manager Paul Tudor Jones had been studying the accelerated methods of buying and selling stocks that computers had made possible. The speed of transactions, he felt, had inflated prices, and a major correction was inevitable. Through his hedge fund, Tudor Investment, Jones bet everything on a downward turn. Black Monday tripled his stake, making him one of the country’s richest financiers. In the world of stock-market speculation, a single big win is enough to attract a clientele, whose holdings one can then manage without taking excessive risks, and that’s just what Jones did. Read the rest of this entry »