Opening Bell

Hurricane Bell: 10.30.12

U.S. Super Storm’s Record Flooding Lands Blackout Blow (Bloomberg)
Record tides from a wintry super storm combined with hours of pounding wind and rain to deal an unprecedented blow at the U.S Northeast’s power grid, flooding electrical substations and shutting down New York City’s financial district. At nightfall, Consolidated Edison Inc., New York City’s utility, killed power in parts of downtown Manhattan and Brooklyn as seawater encroached on crucial electrical equipment and warned more power cuts may be coming. Crews in Connecticut threw up a dike around a substation serving downtown Stamford and stood ready to shut down four others should floodwaters rise by the forecast 11 feet. “The last time we saw this threat was never,” Connecticut Governor Dan Malloy said at a press conference yesterday, warning the worst seawater flooding in 70 years could have tides lapping at the base of at least one inland dam. As of 8 p.m. in New York, the storm had knocked out power to some 3.6 million homes and businesses, according to the U.S. Energy Department. That figure may increase overnight. Power blackouts that may eventually affect as many as 10 million people in the region for as long as 10 days left homes in the dark, closed the stock market, and disrupted operations at refineries, pipelines and power plants. Damaged power lines, substations and other infrastructure will contribute to the $20 billion in total storm costs estimated by Eqecat Inc., a risk- management company in Oakland, California.

NYU Hospital Evacuated As Generator Goes Down (CBS)
New York University Langone Medical Center was evacuated Monday night, after power went out as a result of Superstorm Sandy, and generators subsequently began to go down. As CBS2’s Dick Brennan reported, power went down across Manhattan from 39th Street south to the southern tip of the island – a region that includes the hospital. Backup generators were in operation, but started to fail in the 11 p.m. hour, and an evacuation began.

Massive Transformer Explosion Rocks ConEd Plant (WP)
The explosion happened shortly before 8:30 p.m. at the building located in Stuyvesant Town…”There was an explosion about 5 minutes ago and I could see Blue sparks coming from the plant! The plant is dark and smoke stacks are not lit up!” Mario Camilla said in an email. Con Ed has since confirmed the spectacular blow out, which was also captured on video, and said it was a substation equipment failure. The utility said at more or less the same time it lost power at its central command station but it has now been restored.

Building Collapses On 14th Street (NBC)
A four-story multiple-unit residence at 92 8th Avenue between 14th and 15th streets collapsed Monday evening, according to the FDNY and witnesses. Susan Milyavsky was standing on the balcony of a friend’s apartment just across the street from the building when its front collapsed. “It was like it just melted off,” Milyavsky said. “It crumbled down.”

Idled Stock And Bond Traders Watch, Wait, And Position (WSJ)
Even with the U.S. stock market closed, investors found ways to trade. “You can work around it to a certain extent,” said Nanette Buziak, head of equity trading at ING Investment Management. On Monday morning, “where I would have been trading in stocks, we ended up trading what we needed to in futures. We’re also still trading where we need to in international markets.” […] But activity in the municipal-bond market ground to a halt Monday, as issuers postponed deals and trading wrapped up early. Some of the week’s biggest deals are being pushed back to later in the week or are on a day-to-day schedule, if they aren’t postponed indefinitely…A handful of other markets stayed active, but trading was thin and many people could not get to their desks. As a result, those who were around found themselves buzzing with activity, as traders hunted for scarce counterparties. “Actually, we are very busy today. Can I hang up now?” said Mamoru Arai, senior currency trader at Mizuho in New York, who said his firm was operating with only two traders on the floor today, compared with more than a dozen on a normal day.

NYSE To Test New Contingency Plan Tuesday (WSJ)
The broader plan outlined Monday night by NYSE and rival exchange groups BATS Global Markets Inc. and Direct Edge Holdings LLC would see the Big Board operator’s all-electronic NYSE Arca platform handle critical opening and closing auctions. The New York Stock Exchange and the smaller NYSE MKT exchange would remain closed under the plan being discussed, The plan deviates from a proposal floated Sunday by NYSE Euronext, which involved operating the New York Stock Exchange using Arca’s systems. This drew concerns from brokerage officials worried that they weren’t properly prepared for the unconventional approach. Under the plan outlined late Monday, all trading in NYSE-listed securities would execute on the Arca exchange, according to the notice from NYSE Euronext.

Labor Department Says Hurricane May Affect Jobs Report (Bloomberg)
The U.S. Labor Department will wait to gauge the impact of Hurricane Sandy before determining the status of the October jobs report, the last before next week’s presidential election. The monthly employment data are scheduled to be released Nov. 2 at 8:30 a.m. in Washington. The median forecasts of economists surveyed by Bloomberg call for payrolls to rise by 125,000 workers in October and for the jobless rate to increase to 7.9 percent from 7.8 percent. “We will assess the situation when the weather emergency is over and notify the press and public of any changes at that time,” Labor Department spokesman Gary Steinberg said in an e- mailed statement today.

As Sandy strengthens, Connecticut governor issues ‘Katrina-like’ warning (MN)
Governor Dannel P. Malloy called a quick press briefing at 9:15 p.m. after consulting with town officials and getting updates from the situation on Long Island. His biggest worries were for region one, which extends from Bridgeport to Greenwich, but he also has substantial concerns for residents along the Shoreline from Old Saybrook to West Haven. The governor said he was issuing “a Katrina-like” warning, telling residents to get to the highest place in their homes if they are already experiencing flooding, or if necessary to their roofs.

Behind Decision To Close Markets (WSJ)
Even if traders no longer flock to the exchange floors to buy and sell stocks and other securities, the software engineers and other technology staff who are responsible for maintaining those electronic systems still must be connected. And like the hundreds of thousands of East Coast residents immobilized by the storm, many traders couldn’t find transportation to take them to their firms’ trading floors. That issue took on added importance late Monday when parts of lower Manhattan flooded and were without power. Opening the U.S. stock markets without the New York Stock Exchange wasn’t an option, according to one person involved in the discussions over the weekend. While other, all-electronic exchanges could have opened for business, the Big Board’s role as the official opening and closing price-setter for many benchmark stocks would have posed problems for firms catering to retail investors and mutual funds that calculate their valuations against prices set on the NYSE. Some customers worried they didn’t have enough time to address any technical problems that may have surfaced as they rerouted systems to send orders to NYSE’s Arca electronic exchange. Others faced the prospect of not being able to handle any trades whatsoever, due to not having adequate backup plans, according to people close to the matter.

UBS To Reveal Investment Bank Exit Plans Tuesday (Reuters)
The move will focus Zurich-based UBS around its private bank and a smaller investment bank, ditching much of the trading business that saw it lose $50 billion in the financial crisis and one rogue trader lose $2.3 billion last year…Investors are keen for details on how the Swiss bank will wind down the fixed income unit without incurring big losses. Employees complain they have been in a state of limbo after months of rumors of cuts. “It’s becoming like torture, especially for those that don’t think they will be compatible with the new Orcel team,” said one employee, referring to Andrea Orcel, a close ally of Ermotti from Bank of America who arrived in July and is expected to run the investment banking unit’s remaining businesses. Bankers were already anxiously awaiting news of an initial 400 job cuts set to hit this week, though that will likely be just the beginning of a cycle of layoffs that will hit those in fixed income trading the worst.

Nomura Trails Goldman in Return on Equity Amid Losses Abroad (Bloomberg)
“The current levels of net income are absolutely not adequate,” Nomura’s Co-Deputy Chief Financial Officer Jonathan Lewis said in a phone interview yesterday. “Return on equity of 0.5 percent for the second quarter is not where we want to be.”

Investors Play Lehman Claims Games (WSJ)
In the Lehman case, some big investors have been buying the claims against the London unit for more than 100% of their original value, according to buyers and sellers, as well as the administrator for the subsidiary. This stands out, as IOUs from bankrupt companies typically fetch severely discounted prices of half or less than their original value. Claims against other Lehman units are selling for far less.

Milken’s Past Invoked In Gupta Sentencing (Dealbook)
Judge Jed S. Rakoff, the presiding judge in Mr. Gupta’s case, made a surprising reference to Mr. Milken during the hearing. It came after Mr. Gupta’s lawyer, Gary P. Naftalis, made a plea for a lenient sentence. Mr. Naftalis cited the hundreds of letters of support for Mr. Gupta, who in addition to his business accomplishments has played a leading role in fighting global disease. He read a letter from Barry Bloom, the former dean of the Harvard School of Public Health. “Dr. Bloom stated, ‘To my knowledge, as someone who has worked in global health for 40 years, with the sole exception of Bill Gates, no leader of the private sector or corporate world has invested so much of his time, energy, and personal credit to do so much for the poorest people of the poorest countries than Rajat Gupta,” Mr. Naftalis said. “I’m glad he didn’t say except for Michael Milken,” Judge Rakoff responded.

Storm Overwhelms Atlantic City (NYT)
“The city is under siege,” said Thomas Foley, the city’s chief of emergency management. “Sandy is pretty furious at Atlantic City. She must have lost a bet or something. As we say in our slogan, ‘Do A.C.’ She’s doing A.C., all right.”

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62 Responses to “Hurricane Bell: 10.30.12”

  1. West Coast says:

    Prayers with ya'll.

    Stay safe out there.

  2. guest says:

    Dealbreakers Obsolete X86 servers still running during Sandy and all the "Big Boys" systems can't be up and front running to better American values? Glad my $$$ are in Canada with Sprott.

    Go long on Grainger's supply where the trades buy their sump pumps…………..

  3. Swiss Hedge says:

    MS 15'000 staff "remote computing" during a blackout….mmmmm

  4. Chiarb says:

    Good luck guys, my thoughts are with you

  5. UBS Sucks Guy says:

    Those were some pretty spectacular winds. Looks like the city got slammed harder than us folks in CT.

    Look like I'll be avoiding downtown for a few days.

  6. London says:

    Good luck all in NY/East Coast.

  7. Low Income Housing says:

    Merry (early) Christmas !!!

  8. VonSloneker says:

    Good luck, we're all counting on you…stay safe

    – Hurricaine Alley

  9. Guest says:

    Scientists now believe most of the flooding was because of Chris Christie going for a swim in the Hudson.

  10. Matt's mom says:

    who is up for trading some soy today?

  11. Bejujular says:

    Well atleast the Jersey Shore flooding should provide cheap and easily accessible heating/generator oil for inland areas.

  12. Guest says:

    I'm working remotely, and plugged in my computer, yet it still says less than 2 min of battery life left.

    -Jefferies Analy

  13. Guest says:

    I didn't know they redid the memorial pools to be multi-tiered now.

  14. guest says:

    Gawddammit! I guess it's off to the burbs of Chicago, no way that I could handle Omaha.

    • Omaha Gas Pro says:

      Omaha is a great place to work and raise a family. Here are some tips for surviving working in Omaha if you're from some other part of the country:

      1. Tell all the locals how much you love Mannheim Steamroller.
      2. Have 6 sets of white turtlenecks with red sweatshirts to wear.
      3. To Omahans, a pond is a "lake".
      4. Don't ask what the giant tube of sand is in the back of the bed of pickup trucks.
      5. Make fun of people from Iowa.
      6. Be prepared to listen to everyone talk about their 1 share of Berkshire Hathaway.
      7. Residents who put clear tape over their exterior windows in October aren't weird.
      8. People who say they had Runzas at lunch aren't telling you they're sick.

      • guest says:

        Yea, but how was Omaha in the 80s?

        • Omaha Gas Pro says:

          I didn't get there until the 1990, when natural gas markets were decontrolled. There were no topless clubs, only "bikini bars" and most of those were in Council Bluffs. On night, some guys from Tenaska asked us to go with them to a "gentleman's club" located 20 or so miles away in a town called Fremont. Everyone was pretty excited about that and as we neared the club we saw a huge amount of cars lined up to get in the club's parking lot. Unfortunately, our hosts –as well as those of us who worked at Zubaz Energy Marketing–were unaware that the traveling division of the Chippendale Male Dancer Review (from Denver) were making their way across Nebraska, enchanting the hearts of farmers wives and daughters across the Platt River Valley's fertile lands that night.

          I know. "Cool story, bro"..

  15. guest says:

    Hiring with premium pay: divers for the Budensbank. Come join our team and be on the cutting edge of asset recovery.

  16. NakedShort says:

    I wont get any of you guys started on your Monday night.

  17. resident poet says:

    Hey Sandy – get the fuck out,
    said New Yorkers,
    Before our streets become filled with Orcas.
    It's pouring and it gets quite boring
    to talk about Nomura every morning.
    Fuck Japan anyway, 'Merica's where it's at –
    how funny is it when Asian chicks get fat?
    Wait – are we seriously supposed to rely on BATS?
    And the streets are flooded, I see life less and less
    Guess that's what it's like to work for UBS

  18. Guest says:

    Flooding damage is bad but hardly the horrific end-of-days damage it was hyped up to be.

    • guest says:

      15 people (and counting) are dead, two hospitals where generators failed had to be evacuated in the middle of the night, Lower Manhattan is underwater, subways won't be functioning for days, and hundreds of thousands are without power and will probably stay that way for a week. But thanks for your two cents re: "hype."

  19. Guest says:

    Hey Sandy! Stop doing god’s work, THATS MY JOB!

    -L Blankfein

  20. Guest says:

    If you're having Thomson issues this morning try this:

    1. Open Thomson ONE Folder:
    C:Program FilesThomson FinancialThomson ONE

    2. Select "RDCSetup.exe"

    3. Put a check mark "Swap Server Settings" then Click on Apply and Ok.

    I figure we'll crash the secondary server soon, be meh, I like you guys.

  21. Guest says:

    Remember folks, after a hurricane, don't go chasing waterfalls please stick to the rivers and the lakes that you're used to.

    UBS Safety Quant

  22. Hobbes says:

    I think UBS would prefer if the lights were off when they fired people in Stamford.

  23. Guest says:

    You should be ashamed if you're an adult who doesn't know how to swim.

    -Sandy

  24. LetsBreel says:

    Connecticut Governor must've been watching CNN

  25. Swiss Hedge says:

    Is Sandy one of the lost Kardashian sisters?

    (…just asking since news reports in Europe here are limited and they're talking of ferociously wet blow…. ahh never mind)

  26. James J. Cramer says:

    HEY GUYS JIM CRAMER HERE AND ALL I HAVE TO SAY IS BOOOOOOOOOOOYAAAAAAA SKEEEEEEEEEE DADDYYYYYYYYYYYYY FUCK THIS HURRICANE! IT'S INTERRRRRRRUPTING MY SHOWWWWWWW BUT I JUST WANTED TO REACH OUT TO YOU GUYS AND SAY FB IS A BUY BUY BUY!!!!

    • guest says:

      Jim, my portfolio is long many Manhattan financials should I diversify? My broker is offering me a ground floor stake in a casino with Jersey beach front access, he said its a "ten bagger " for sure, what's your take on AC?

    • They Be Floodin says:

      I was hoping you were stuck in the subway but I guess we cannot be that lucky.

  27. Guest says:

    I can't see CBS letting you get away with that one