Emergency Multicasting Synchro System

Emergency procedures during NMM server outage: Tune your solar battery powered radio to

del.icio.us/marketmachine

and stay tuned. RSS is here. IRC channel is #marketmachines on FreeNode. AIM: blindtangerine. I'm trying out a demonstration of WetPaint here.

And see this update.

I'm actually less insufferable when limited to 25 words or less.

Boogying with Lesbians: Lessons Learned

Ms. Purple & Ms. Blue: Schnorrers straight out of Reservoir Dogs.

It is not normally my procedure to use this blog for settling purely personal scores, but in this case I might make an exception.

Actually, I mean both to settle somebody else's personal score, on behalf of a good friend, and at the same time derive more provisional NMM-Brasil Maxims for the Martian enterprise anthropologist looking to do business on Planet Brazil.

Such as

Beware the aggressively friendly Brazilian

In my experience, Brazilians who take a long time to warm up to you, and tend to treat you with icy correctness, as if they are willing to put up with your but do not like you and never will, are more likely to turn out to be gente fina with a mens sana in corpore sano in the end.

Not always. But it is starting to turn into a release-candidate rule of thumb.

We had a really great, relatively quitely little New Year's bash at Sasá's apartment over by Astor, an Italian cantina frequented by Globo soap opera actors, right here in the neighborhood this year.

From our house, you just walk up the hill, past that scary-looking house with the Rottweiler and armored gates spraypainted "kokka da vila é nossa" -- but Neuza always says not to worry, so I try not to -- until you get to that lovely corner where the Capim Santo restaurant used to be.

Sasá, remembering all that Jose Cuervo I had treated her to when she slept on our couch in Brooklyn that time, was even so kind as to stock up on Famous Grouse, knowing that I am a Brechtian-Morrisonian (Van) whiskey-bar man.

At one point, I do believe that the grrrrls were offering to stuff onças -- R$50 notes -- into my cuecas as I worked out to "Street Fightin' Man" ...

Just a small gathering of friends and former lovers sleeping with friends and, incongruously, one big fat Zebu Cavaco. Our intimate crowd. A better bunch of crazy mixed-up human beings you could not find. We love them.

Then Ms. Purple and Ms. Blue arrived.

Read more »

DoS Attacks Continue

Interesting: Denial of service attacks seem to be following me around, this time to my blog at WordPress.com.

It is beginning to seem like someone really does not like what I have to say.

NMM Business Continuity

NMM Business Continuity has weathered the first onslaught of the DoS attack against it and has relocated to cushier quarters.

Read more at cbrayton.wordpress.com/

Hacked!

Well, it's official: The NMM is the target of a denial of service attack.

I kind of figured.

I'm honored, in a way. I had a more or less useless PHP-Nuke test installation defaced once by crazy Turkish hackers--not that it was difficult; I don't know why they were so proud of themselves--but this is fairly industrial-strength.

Do you think maybe They came to the same resolution as Mussolini did about Gramsci--"We must stop this brain from working for 25 years"?

Cue "Twilight Zone" theme.

I'll try to get the host to redirect the domain here while we work out the bugs. I have the database backed up and current here on the safety of my own modest box, in any event.

Fed Appeal Gives Hedges the Edge

Ruling Sets Back Effort to Regulate Hedge Funds | New York Times:

A federal appeals court today set back efforts to regulate hedge funds, the highly secretive investment pools for wealthy and institutional investors, by striking down a Securities and Exchange Commission rule that tightened government oversight of the funds.

Under the rule, the funds would have been required to register with the commission and would have been subject to inspections. But an opinion by Judge A. Raymond Randolph of the United States Court of Appeals for the District of Columbia called the rule 'arbitrary' and told the commission to reconsider.

Because of the vast amounts of money at their disposal, hedge funds can quickly move markets for stocks, bonds and commodities with just a few trades. In times of sharp market fluctuations, their activities are often given the blame.

By some estimates, 10 to 20 percent of all stock trading in the United States involves hedge funds. Universities use them to expand their endowments, and corporations invest pension funds in them, making hedge funds a considerable force in American economy.

As hedge funds have grown, and as some have collapsed because of fraud or excessively risky investments, pressures to regulate them have grown. But fund managers have protested that the vast majority of the funds have acted responsibly and should not be subjected to what James McCarroll, a lawyer with Reed Smith, a New York law firm, said today were 'the regulatory overlays and burdens' faced by mutual funds.

The ruling does not leave hedge funds totally above the law. They are treated like any other investor when it comes to conduct. As a result, the appeals court decision does not affect the commission's investigation into possible insider trading by a major hedge fund manager, Pequot Capital Management, which was disclosed in The New York Times today.

Christopher Cox, who became chairman of the commission after the rule was adopted, said in a statement: 'The S.E.C. takes seriously its responsibility to make rules in accordance with our governing laws. The court's finding, that despite the commission's investor protection objective its rule is arbitrary and in violation of law, requires that going forward we re-evaluate the agency's approach to hedge fund activity.'

"

Rather Be Fishing

AlterNet | MediaCulture | Dan Rather's Raw Deal:

They finally put Dan Rather out of his misery at CBS. CEO Leslie Moonves put on his best mourning face, offering upon Rather's departure, 'He had a very distinguished career. I'm sorry he's leaving us.' However sorry Moonves may be, he still sent Rather to the glue factory -- all for reporting the truth. But not all of it.

Rather's 'unsubstantiated story of Bush's military service' (says USA Today) got him canned. Yet, all the poor man did was repeat a story the Brits put on BBC Television a year earlier -- that Poppy Bush put in the fix to get his son out of 'Nam and into the Texas Air Guard, spending his war years guarding Houston from Viet Cong attack.

But Dan never reported this: the documentation from inside the US Department of Justice detailing the fix. Why not? Because it opened up a far more serious charge: that those who kept Little George out of war's way ended up very well rewarded. The BBC, the world's biggest network, ran that full story -- from the evidence of the fix to the evidence of the lucrative pay-backs -- and the BBC never retracted a comma of it. Nor, by the way, has the White House denied our accusations despite our repeated offers to respond.

George's slithering out of combat turned into big pay-days for those in on the fix and its cover-up: Harriett Miers (remember her?), Karen Hughes and Texas lobbyists.

Yes, I was aware of that report. I go along with the "raw deal" theory to an extent, but I think the lesson to be learned lies in what Rather did to bring it on himself.

Rather killed the story by allowing himself to become the story. He rose to the bait and fell victim to his own vanity.

If there's a better case study for the risks of sub-par fact-checking and rushing to publish, I'd like to know about it.

Black Boxes for Dummies

CCH Wall Street:

A district judge in Vermont has ordered Terry F. Allen $220,000 in disgorgement and fines for running Terry's Tips, Inc. an autotrading program. According to the SEC’s case, Terry’s Tips neglected to tell investors of the risks involved, or the actual, and disappointing, returns delivered by the program.

When investors sign on to an autotrading program, they effectively give an outside advisor or a newsletter control over their brokerage accounts. The broker then accepts trading instructions directly from the newsletter or advisor and executes trades in their accounts without the investor’s further permission.

Terry’s Tips lured in roughly 1,200 investors by boasting 100% annualized returns. But even as it made those promises, the portfolios following Terry’s Tips were experiencing substantial losses, according to the Commission.

Those 1,200 clients had entrusted roughly $14 million to Allen as of September 2004. And they paid between $119.95 and $49.97 per month to subscribe to Allen’s autotrading program. The program involves a strategy of options trading based on market events.

Allen explicitly promised investors visiting his website that some of his Nasdaq trading strategies would yield over 100% per year, so long as the market didn’t tank. But clients invested in just those autotrading strategies between 60% and 100% of their money, even while the market didn’t tumble, the Commission charges.

NYX Stakes in PIX, CHIX, PHLX, BOX, BISQUE

Wall Street banks take stake in Chicago Stock Exchange:

Wall Street banks take stake in Chicago Stock Exchange
The Chicago Stock Exchange (CHX) has confirmed that Bank of America, Bear Stearns, E*Trade Financial and Goldman Sachs are making a combined $20 million equity investment in its business.

The news follows reports earlier this year that CHX was in talks with a number of banks about selling a minority stake of the business.

In a statement, CHX says it will use the funds to improve its electronic trading systems. The exchange eventually plans to drop floor trading in favour of an all-electronic automated system.

This follows similar moves at BOX, BSX, PHLX and others (?) by an overlapping group of megabanks that also have a big stake in NYX (which snapped up Arca's PCX, of course)--especially Goldman. You see those alliances starting to operate in the comment letters over SRO reform and the trench wars over market data business models. Stay tuned.

Quote of the Day

Astroturf Marketing | SourceWatch:

Teri Cox from the New Jersey-based Cox Communication Partners expressed similar enthusiasm in a September 2002 issue of Pharma Executive. Industry-patient 'partnerships,' she wrote, could 'influence changes in healthcare policy and regulations to expand patient access to, and coverage for, earlier diagnoses and treatments . . . recruit participants for clinical trials' and 'speed the development and approval process for new therapies.' Better still, an alliance with a non-profit group can deter inquisitive journalists. 'Without such allies, a skeptical journalist may see a company's messages as self-serving and describe them as such to their audiences,' Cox wrote."

Rivals Brood Over Italian Stallion

Euronext Talks Up Milan Target (W$J):

Pan-European stock-exchange operator Euronext said it plans to step up merger talks with Borsa Italiana amid industry talk that Deutsche Boerse could make a rival approach.

The play for the Milan stock-exchange operator comes as Euronext and Deutsche Boerse already are facing off over Euronext's recent agreement to join with NYSE Group, operator of the New York Stock Exchange. Deutsche Boerse, operator of the Frankfurt exchange, also is pursuing a takeover bid for Euronext.

What a week to have the old blog platform out of action. I have identified the fix, now just need to execute it. Hopefully you are being directed to this backup site so as not to miss all the action.

Borsa Italia operates the MTS Eurobond-trading platform, which is key to NYSE's multi-asset class strategy.

I am still trying to figure out the tech angle on all these doings in the "global exchange ecosystem." Latest state of the draft:


Click to zoom

Basically, it seems to me that each exchange has a tech "ecosystem" that includes hardware, software and connectivity. Kindergarten stuff, I know, but it helps me sort thing out in my fuzzy head.

I guess I should add a dotted green line connecting DB and BI. That's new info to me.

Undoubtedly riddled with errors and vague guesswork, this draft; please help me to correct it.

Spy v. Spy

Digital Straight Talk:

‘Fiery Missives’ and Other Emotional Tactics Driving Net Neutrality Debate

... Last week, Google’s top Washington lobbyist disclosed that the company had configured its search engine to return paid links that support Google’s position on net neutrality after the entry of certain key words" ...

Digital Straight Talk is

produced by Cox Communications, the third-largest cable TV and broadband communications provider in the nation. It’s a source for views and news on the many issues affecting broadband providers and consumers.

High-speed Internet, cable telephony, HDTV and a whole host of related innovations and issues in the digital space have created intense competition among providers. And, where there’s competition, there’s no doubt info overload for consumers and others trying to make sense of it all. With Digital Straight Talk, we want to make sure those in the industry, consumers and others who care have a clear understanding of our vision, direction and opinion. While we provide a Cox point of view, we also shoot for a balanced discussion that’s light on bull and heavy on substance. We air third-party commentary and even views from those who just might disagree with us.

How admirably old-school. How new media paradigm. How like your father lecturing you with false bonhomie about the evils of marijuana while sipping that highball in his hand.

Google's top lobbyist is Andrew McLaughlin of ICANN and the Open Economies Project at the Berkman Center.

Merc in Hong Kong

CME chooses Hong Kong (Finance Asia):

Chicago Mercantile Exchanges establishes Asia-Pacific hub in Hong Kong on the back of planned China futures products.

Chicago Mercantile Exchange (CME) has rolled into Hong Kong, opening its new Asia-Pacific headquarters in the SAR on the back of expanded products offerings, its proximity to China business opportunities and its self-proclaimed increasing focus on Asia. The opening is also timely for CME as it has announced plans to list new futures contracts and options on futures on the renminbi against the dollar, euro and yen and a new Korean won product.

CME’s increased focus on Asia comes as derivatives have heated up in the region, far outpacing the growth in more mature markets and providing the exchange with many new business opportunities. The unveiling also follows its recent launch of its futures contract based on the fifty largest stocks traded in Hong Kong, Korea, Singapore and Taiwan.

Here's where it would be handy for me to be able to link to all my previous coverage of CME's Asia tech doings, such as its Singapore hub ... Gotta get the NMM main site back up today.

The Veil of Ignorance

HYBRID MARKET IMPLEMENTATION: SPECIALIST ALGORITHMIC QUOTING ("S QUOTES") RULE 104:

Among the NYSE Rule Changes leading to full implementation of the Hybrid Market: a new rule, with a pilot program starting today, to insulate the information that flows into proprietary specialist trading from any information the specialist picks up in the course of trading on behalf of clients.

Information arbitrage impossibilitizificated!

As approved in the Hybrid Market Initiative, the Specialist Algorithm is permitted to send messages to the Display Book via the API to quote or trade on behalf of the specialist’s proprietary interest. The Specialist Algorithm will generate these quoting or trading messages in reaction to specific types of information it will have access to. This information includes specialist dealer position, existing quotes, publicly available information the specialist chooses to supply to the algorithm, incoming orders as they are entering Exchange systems, and information about orders on the Display Book such as limit orders, percentage orders, stop orders, and auction limit and auction market orders. This latter information stream is known as “state of the book” information.

NYSE Rule 104 currently allows specialists to send quoting messages to the Display Book via an external application interface (“API”) in exchange traded funds (“ETFs”) and Trust Issued Receipts. These quoting messages are not based on the system receipt of order or other information. This provision will be superseded by the Rule 104 amendment noted above when Phase II of the Hybrid Market is fully implemented.

Prior to full Phase II implementation, the Exchange is commencing a pilot permitting specialists to send algorithmic quoting messages (“s-Quotes”) to the Display Book in all types of securities without the specialists having access to information about incoming orders as they are entering Exchange systems. This pilot will begin on June 21, 2006.

The Exchange believes that s-Quoting in this fashion will enable specialists and the Exchange to obtain valuable real time experience with respect to the use of specialist proprietary algorithms.

Okay, white-hat hackers: how are you going to game this?

There's a lot doing in the NYSE tech shop. We even heard from SIAC and SFTI this week--which is rarer than TV interviews with CIA agents used to be.

The Virtuous Vulture

Dealbook: Why the World Needs Private Equity:

Far from being vultures who do not care what gets destroyed in their single-minded pursuit of profits, private equity firms, rather, see their role as “empowering business leaders as they seek to make change,” wrote Marek Gumienny, managing director of Candover, in what amounted to an industry apologia published Tuesday by the Web site of BBC News. Coming one day before The Financial Times warned about the dangers of private equity on its editorial pages, Mr. Gumienny’s commentary underscores the growing attention, good and bad, these kinds of investment pools are getting.

I don't really think of the private equity "industry"--whatever the heck that means--in either set of terms. It all depends on exactly what a specific fund or consortium of funds gets up to, doesn't it?

And what results from the change they empower the business leaders to do.

Life is not Star Wars. The Force doesn't care about you, puny human.

The FT vs. the BBC: a case of "bite the hand that doesn't feed you" vs. vice versa?