Opening Bell

Opening Bell: 02.18.14

FX Traders Facing Extinction as Computers Replace Humans (Bloomberg)
Electronic dealing, which accounted for 66 percent of all currency transactions in 2013 and 20 percent in 2001, will increase to 76 percent within five years, according to Aite Group LLC, a Boston-based consulting firm that reviewed Bank for International Settlements data. About 81 percent of spot trading — the buying and selling of currency for immediate delivery — will be electronic by 2018, Aite said. “Foreign-exchange traders are much like stock floor traders: a rapidly dying breed,” said Charles Geisst, author of “Wall Street: A History” and a finance professor at Manhattan College in Riverdale, New York. “Once the banks realize they are costing them money, the positions will dwindle quickly.”

Bankers Reap Benefits of 2013 Rally (WSJ)
All benefited from a steep rise in bank stocks over the past year—shares of the top six U.S. banks on average rose 41% last year, compared with a 30% gain for the Standard & Poor’s 500 stock index.

Former Barclays Employees Charged by U.K. Over Libor Rigging (Bloomberg)
Three former Barclays Plc employees were charged by U.K. prosecutors with conspiring to manipulate Libor, bringing the number of people accused in global probes to more than a dozen. Peter Charles Johnson, 59, Jonathan James Mathew, 32, and Stylianos Contogoulas, 42, were charged with conspiring to defraud between June 2005 and August 2007, the Serious Fraud Office said in an e-mailed statement today. The charges are the first related to manipulation of U.S. dollar Libor, the agency said, while previous cases were linked to interest-rate benchmarks tied to the Japanese yen.

Summers: US faces a ‘Downton Abbey’ economy (CNBC)
The U.S. is at risk of becoming a “Downton Abbey” economy, as the gap between the top 1 percent and the poor widens, former US treasury secretary Larry Summers has warned. In a comment piece for the Financial Times, Summers highlighted that the share of income going to the top earners in the U.S. has increased sharply, while real wages and family incomes remain stagnant. These conditions will last beyond the normalisation of the economic cycle and budget deficits, Summers added. “The cumulative effect of all these developments is that the U.S. may well be on the way to becoming a Downton Abbey economy. President Barack Obama is right to be concerned. Those who condemn him for ‘tearing down the wealthy’ and engaging in un-American populism are, to put it politely, lacking in historical perspective,” Summers wrote.

How a Big Bet on Racing Suits Left U.S. Skaters in the Cold at Sochi (WSJ)
To be sure, no one knows what role, if any, the Mach 39 played in the team’s performance. Some insiders say that once doubts about the suit were planted in the team’s psyche, the skaters’ collective mental focus was broken. Team U.S.A. itself has pored over a multitude of other factors that could have contributed to their poor showing: race tactics, skate blades and the decision to hold their pre-Olympic camp at high altitude…The dramatic turnabout, meanwhile, has created a crisis for Under Armour. With revenues of $2.3 billion, the Baltimore-based company has skyrocketed to prominence in recent years with sleek skin-gripping sports apparel that made it a darling of athletes and investors alike. Long term effects are yet to be known, but on Friday, the stock fell 2.38%. In an interview, Matt Mirchin, the company’s director of marketing, said Monday the company still believes the skinsuit gave the skaters “the strongest chance of winning.” But the controversy hit the company where it hurt most—its credibility in high quality athletic apparel—exactly when it needed to shine on the world stage. With more than 90% of its revenues coming from North America, its partnership with the U.S. speedskating squad was supposed to help the company vault into new international markets.

Nike is actually making Marty McFly’s self-lacing shoes (NYP)
When Marty and Doc set a course for 2015 to blend in they needed to dress like futurites. Marty slipped on a self-adjusting jacket and put on a pair of awesome runners that automatically laced themselves up. Before our very eyes they fastened to his feet. “Power laces!” Marty cried. Now you could be doing the same next year after Nike designer Tinker Hatfield confirmed at an event in New Orleans that power laces were coming for 2015. “Are we gonna see power laces in 2015? To that, I say YES!” Hatfield said. Further information such as what models will get the special lacing system was not disclosed.

White House, Republicans Rekindle Feud Over 2009 Stimulus (WSJ)
The White House on Monday released a report that said the law “saved or created an average of 1.6 million jobs a year for four years” and raised the country’s gross domestic product by between 2% and 3% from late 2009 through mid-2011. The spending “initiated” 15,000 transportation projects and helped with the construction or improvement of nearly 6,000 miles of railway lines, the report said. On one of the most polarizing points, the White House report said the law “had at most a minimal impact on the long-run debt,” arguing that the legislation resulted in economic growth that offset or eliminated its costs. Republicans had a much different view, with several party leaders Monday proclaiming the law a total failure. For years, GOP leaders have said the White House’s promises of “shovel ready” projects underestimated the federal bureaucracy that goes into large-scale spending programs. Republicans also criticized a loan guarantee funded by the stimulus law that went to Solyndra LLC, a solar-panel manufacturer that filed for bankruptcy in 2011.

Soros cuts J.C. Penney, trims Herbalife, others follow (Reuters)
The New York-based firm, which ranked as J.C. Penney’s second biggest investor, sold 6.15 million shares during the last three months of 2013, according to a regulatory filing on Friday. At the end of the quarter, the firm owned 13.8 million shares, down 30 percent from what it held at the end of the third quarter. It also cut its stake in Herbalife, where it was the fifth biggest investor.

Hedge Funds Raise Gold Bull Bets as Paulson Holds (Bloomberg)
Investors’ return to gold after the bear market in 2013 is driving prices to the longest rally since 2011. U.S. factory output unexpectedly fell in January, and emerging-market equities and currencies weakened. Paulson, the biggest owner of the largest exchange-traded product backed by the metal, left his holdings unchanged in the fourth quarter, a government filing showed.

Here’s the Skinny on NBC’s Olympic Latte Secret (WSJ)
Starbucks isn’t an Olympic sponsor and is therefore forbidden to have an official presence here. The nearest Starbucks is about 350 miles away by car in a little-known city called Rostov-on-Don. The only branded coffee player is supposed to be McDonald’s Corp, which has been gaining grounds globally with its McCafé outlets. Olympic sponsors such as McDonald’s usually defend their turf more fiercely than a Team Canada goalie…The media giant, which paid $775 million for exclusive U.S. broadcasting rights for the Games, has erected the Sochi Starbucks in its cordoned-off area of the Olympic media center. Baristas serve the free java 24-hours-a-day to the roughly 2,500 people NBC says it sent here…Bringing in the joe is a delicate exercise. NBC flies in a rotating crew of some 15 baristas from Starbucks coffee shops in Russia, sets them up with accommodations in Sochi, and pays their regular wages. As with past Games, Starbucks has gladly cooperated with the effort…NBC says its Starbucks doesn’t run afoul of Olympic rules, which prevent nonsponsor companies from showing their brands or offering products at Games facilities. Their logic: The secret coffee shop is secluded within an NBC facility and isn’t open to the public. “It’s a personal item,” says Mr. Fritsche, who calls the drinks perk “a huge morale booster.”

Cops: Ohio Woman Assaulted Supermarket Worker With Pair Of “Special Cut Filets” (TSG)
While shopping with her family at the Giant Eagle store in Brunswick, a city 25 miles south of Cleveland, Slyman “went to the meat counter to retrieve some special cut filets,” according to a police report. “At some point,” cops noted, “Slyman threw 2 of the filets” at Alzbeta Barath, a 64-year-old woman working the meat counter. The filets went flying “over an alleged comment Barath made earlier toward Slyman’s husband,” according to investigators. The derogatory comment–which Barath denied making–purportedly involved the weight of Slyman’s spouse. A witness told cops that she did not hear Barath say anything to the Slymans to prompt the filet assault.

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48 Responses to “Opening Bell: 02.18.14”

  1. Guest says:

    Just check out how well the robo trading works for equities. It's not like equity traders have become extinct.

  2. guest says:

    Bess: What are you looking at? You see something? Huh?

    Shazar: Wh- What did I do?

    Bess: What did you do? You know what you did! You did nothing!

    Shazar: If you want me to do something, just tell me!

    Bess: You've got to change the diet, I've told you about that. I don't like the red meat, you're eating the red meat. I don't like that!

    Shazar: I'm doing the best I can.

    Bess: My birthdays coming up. You going to get a card?

    Shazar: Okay.

    Bess: You're not going to get a card! You're not going to do a fawking thing!

    Shazar: I'll try and do better. I will.

    Bess: TV! TV! TV! That's what you like to do! Read a fawking book!

    Shazar: Okay, yeah, you're right! You know everything!

    Bess: Who the fawk do you think you're talking to!

  3. Guest says:

    *WHIZ* *WHIR* *BEEP*

    • Knight Capital says:

      Too soon.

    • C3P0 says:

      I see nothing wrong with this.

    • UFO says:

      Commense massive, global currency panic, followed by regulatory requirements of
      A) mandatory market close after designated percentage loss
      B) mandatory human execution
      C) worst case scenario involving a bit of both

      ……whoopsie, someone is off a decimal point and now there's a riot in Sao Paolo

  4. Beef Boras says:

    The Asslobsterclops is among us……you've been warned……….

  5. Penn says:

    If I just buy level 1 of the Rosetta Stone for Mandarin will I learn enough to tell a shy Chinese woman in the library I want to scream into her ass?

    • Quant me maybe... says:

      Don't waste your money.

      Wǒ xiǎng jiān jiào dào nǐ de pìgu
      or if you want to slip her a note:

      Used Google translate. Would love to know what it really says.

    • Laxbro says:

      Now I'm not saying knowing their language can't get you laid, but since I am not bilingual, I think it's desperate to try and talk to foreign girls in ILR Level I proficiency. They already assume we're arrogant Americans, so just assert dominance by refusing to utter even a greeting in their native tongue. No nonsense, this alpha strategy has worked across Europe, Montreal, Thailand and Australia.

  6. marty mcfly says:

    I wish we were facing a "Seinfeld" economy, or even a "Big Bang Theory" economy, because I think that blonde chick is hot sometimes

  7. UFO says:

    In Soviet Ohio, meat beats YOU!