Tag: finance

LAX Shooter Identified, “Wanted To Kill TSA And Pigs”

Contrary to initial reports that the shooter was an off-duty NSA agent, subsequent updates have revealed that the LAX shooter, who reportedly is still dead, although unclear if he was killed before or after he was in police custody, as Paul Anthony Ciancia, a 23-year-old who was either a Los Angeles native, or from Pennsville, N.J. Additionally, we have learned that according to a law enforcement official, who was briefed at LAX on the investigation but not authorized to speak publicly, said the gunman was wearing fatigues and carrying a bag containing a hand-written note that said he “wanted to kill TSA and pigs.” The official requested anonymity because he was not authorized to speak publicly. Considering the accuracy with which this news event has been broken, most of it relying on unsubstantiated and often times fake Twitter sources (some had reported earlier, falsely, that the former NSA chief had been shot as well), we won’t be surprised if this story were to change a few more times.

From My Fox LA:

A law enforcement official told the The Associated Press that the suspect in the Los Angeles airport shooting is a 23-year-old man from New Jersey who wrote a rant about killing Transportation Safety Administration workers.
 
A law enforcement official, who was briefed at LAX on the investigation but not authorized to speak publicly, said the gunman was wearing fatigues and carrying a bag containing a hand-written note that said he “wanted to kill TSA and pigs.” The official requested anonymity because he was not authorized to speak publicly.
 
The official identified him as Paul Ciancia. A second law enforcement official confirmed the identity, speaking on condition of anonymity.

The gunfire erupted around 9:30 a.m. inside the terminal that houses airlines such as Allegiant Air, Frontier, Spirit, Virgin America and JetBlue. Patrick Gannon, chief of the Airport Police Department, said the suspect walked into the airport, pulled an assault rifle out of a bag and started shooting.

“He proceeded up into the screening area where TSA screeners are and continued shooting,” Gannon said, adding that the gunman “went past the screeners and back into the terminal itself.”

Gannon said police pursued the gunman, who was shot and taken into custody inside the terminal. The gunman’s condition was not immediately known.

Interim Los Angeles Fire Chief Jim Featherstone said paramedics treated seven people at the airport, and six were taken to area hospitals. One person apparently declined to be transported, fire officials said.

Officials at Ronald Reagan UCLA Medical Center said it was treating three male patients, one in critical condition and two in fair condition. At least two other patients were believed to be at Harbor UCLA Medical Center, but their conditions were not immediately known. News media outlets reported that one patient who was taken to Harbor UCLA had died.

Multiple media outlets, citing unnamed sources, reported that one TSA agent was killed in the gunfire, but police would not confirm the reports.

The gunman was described by some witnesses as a young white male. Police and fire officials said they could not confirm reports that the gunman was an off-duty TSA agent.

Some initial reports indicated that a second suspect had been arrested, but Gannon said, “This was a lone shooter,” and the gunman “was the only person that was armed in this incident.”

David Bowdich, FBI special agent in charge, declined to provide any details of the investigation, but said, “At this point, we do not see any additional threats here at the airport.”

Aside from the alleged note, the shooter’s motives are unclear as of yet.

* * *

Update: that was quick – one has to love the social media.

 


    



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The Bubble Most Go On: Stocks Buck Two-Day Taper Trade, Break Losing Streak With Late Day Surge

Looking at all non-equity asset classes, one would be left with the impression that the December taper is an increasingly likely outcome. Sure enough – bonds sold off again, and have been selling off constistently since the FOMC announcement. In fact they are poised to close at 2.62%, the highest yield since October 22.

The dollar, inversely, ramped higher on both EUR woes and the expectation that its destruction may “taper” in the near future.

As expected, gold did the opposite of the dollar, and Gartman’s latest reco, and continued its sell off for the third day in a row:

Thus the taper trade continued for the second day in a row in all asset classes, except stocks of course. Despite breifly dipping into the red shortly after today’s conflicting manufacturing reports, the late day ramp was once again on location, and helped push ES nearly to a new intraday high in the minutes before the close, before a shakedown took place just after the close, sending ES sliding after hours, and wiping out the entire 3:30 pm ramp in seconds.

It can be seen just where the rug gets pulled moments after the 4:00 pm close of trade.

And so we close another week of mad fun with Mr. Chairman’s, soon to be Mr. Chairwoman’s manipulated, frothy, bubbly, markets.

Finally, speaking of bubbly frothyness, here is a smattering of the recent headlines confirming just that.

  • Oct. 31, Risk of London Property Bubble Is Increasing: Moody’s Analytics
  • Oct. 30, Barclays CEO Reassured Regulators ‘Are On’ Housing Bubble Risk
  • Oct. 30, Malaysia Has Taken Steps to Avert Property Bubble: Zeti
  • Oct. 29, BlackRock’s Fink Says There Are ‘Bubble-Like Markets Again’
  • Oct. 29, Dublin Home Prices Rise Most Since Crash as ‘Froth’ Signs Return
  • Oct. 23, Central Bankers Will Fail Again to Deflate Bubbles: SG’s Edwards
  • Oct. 23, Swedish Banks Lash Out at Government as Housing Market Overheats

“This time is different.”


    



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Who Are The Biggest Whiskey Drinkers In The World?

Hint: it’s not the Irish.

In retrospect, considering India has one of the highest inflation rates in the EM world, a plunging currency and the local central government has made purchases of gold – either foreign or domestic – virtually impossible, converting one’s deflating liquid net worth into liquid alcohol for immediate consumption, with a utility that is instant and needs no discounting, is probably not a bad idea. Finally unlike gold, one can drink whiskey,


    



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Peeking Inside Yellen's Mindset

From Scotiabank’s Guy Haselmann

Yellen’s Mindset – Implementing Her Professor’s Theories

Bloomberg printed an article about Yellen’s educational background, noting that two of her professors were James Tobin and Arthur Okun.  The article is interesting because the Fed is currently trying to implement QE and “Twist” which are theories developed by these two Nobel Laureates.  Tobin attempted a form of “Twist” in the 1960’s.  He also championed Keynesian ideas and advocated government intervention to stabilize output and avoid recessions.  Okun developed an empirical “law” relating” changes in unemployment to GDP.

  • The FOMC is placing great faith in these theories; thus, policies are an experiment of colossal proportion but whose effectiveness has limited supporting evidence.  Fed models try to estimate benefits, but they assume that markets remain efficient over time.  Model errors are likely to occur when trying to asses market risks, particularly because markets are typically irrational and illiquid during crisis periods.
  • FOMC policy veered into unchartered waters as soon as it moved Fed Funds down to the zero lower bound.  When official interest rates were eliminated as a monetary tool, directly manipulating financial markets became the Fed’s only conduit to try to affect the broader economy.  Evidence of its effectiveness is open to debate.  Since asset price inflation has been a policy objection, knowing when to stop is critical to Fed’s credibility, especially with its history of fueling boom/bust cycles.

* * *

And some additional thoughts from Guy on markets:

FOMC Statement – Smart Tweaks to Buy Time, and Manage Expectations 

The FOMC was probably uncomfortable that market expectations for tapering had moved to March or later. Yesterday’s FOMC statement was successful at opening the possibility of an earlier move without changing overall policy direction. The statement downplayed the effects of the government shutdown and left in place the word “moderate” to describe the state of the economy, rather than downgrading it to “modest”. More importantly, the statement removed the sentence about how financial conditions had tightened.

FOMC Discussion – Growing Risks for Every Decision

The discussion in the boardroom was likely more intense than reflected by the simple changes of the statement.  The risks to tapering at this meeting had grown due to the weak September employment report, and because the market was not expecting any changes to policy.  However, there are several FOMC members who believe the risks to not tapering grow higher every day in sync with the size of its balance sheet.  The stakes are rising not just because their exit strategy becomes more difficult as the balance sheet expands, but also because the Fed has lost any sense of the market reaction function once they actually announce a slower pace of purchases. 

Markets – Expensive, but Carry and QE Trying to Keep Them That Way 

The bottom line is that the current QE policy will continue for another 6 weeks (at a minimum). The Fed is trying to “buy time” in the hopes the economy can heal further. Therefore, the attractiveness of carry and roll-down trades in Treasuries will partially offset the lack of attractiveness Treasury yields (expect a slow leak next week on 10s down to 2.62%).

  • Buying equities because bonds look expensive is a bad rationale.  Equities are saturated with speculative excess based on Fed promises or the perception of promises.  This may work for a while longer, but speculators are likely playing a greater-fool-theory ‘game of chicken’.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ZpTaotnYy-s/story01.htm Tyler Durden

Peeking Inside Yellen’s Mindset

From Scotiabank’s Guy Haselmann

Yellen’s Mindset – Implementing Her Professor’s Theories

Bloomberg printed an article about Yellen’s educational background, noting that two of her professors were James Tobin and Arthur Okun.  The article is interesting because the Fed is currently trying to implement QE and “Twist” which are theories developed by these two Nobel Laureates.  Tobin attempted a form of “Twist” in the 1960’s.  He also championed Keynesian ideas and advocated government intervention to stabilize output and avoid recessions.  Okun developed an empirical “law” relating” changes in unemployment to GDP.

  • The FOMC is placing great faith in these theories; thus, policies are an experiment of colossal proportion but whose effectiveness has limited supporting evidence.  Fed models try to estimate benefits, but they assume that markets remain efficient over time.  Model errors are likely to occur when trying to asses market risks, particularly because markets are typically irrational and illiquid during crisis periods.
  • FOMC policy veered into unchartered waters as soon as it moved Fed Funds down to the zero lower bound.  When official interest rates were eliminated as a monetary tool, directly manipulating financial markets became the Fed’s only conduit to try to affect the broader economy.  Evidence of its effectiveness is open to debate.  Since asset price inflation has been a policy objection, knowing when to stop is critical to Fed’s credibility, especially with its history of fueling boom/bust cycles.

* * *

And some additional thoughts from Guy on markets:

FOMC Statement – Smart Tweaks to Buy Time, and Manage Expectations 

The FOMC was probably uncomfortable that market expectations for tapering had moved to March or later. Yesterday’s FOMC statement was successful at opening the possibility of an earlier move without changing overall policy direction. The statement downplayed the effects of the government shutdown and left in place the word “moderate” to describe the state of the economy, rather than downgrading it to “modest”. More importantly, the statement removed the sentence about how financial conditions had tightened.

FOMC Discussion – Growing Risks for Every Decision

The discussion in the boardroom was likely more intense than reflected by the simple changes of the statement.  The risks to tapering at this meeting had grown due to the weak September employment report, and because the market was not expecting any changes to policy.  However, there are several FOMC members who believe the risks to not tapering grow higher every day in sync with the size of its balance sheet.  The stakes are rising not just because their exit strategy becomes more difficult as the balance sheet expands, but also because the Fed has lost any sense of the market reaction function once they actually announce a slower pace of purchases. 

Markets – Expensive, but Carry and QE Trying to Keep Them That Way 

The bottom line is that the current QE policy will continue for another 6 weeks (at a minimum). The Fed is trying to “buy time” in the hopes the economy can heal further. Therefore, the attractiveness of carry and roll-down trades in Treasuries will partially offset the lack of attractiveness Treasury yields (expect a slow leak next week on 10s down to 2.62%).

  • Buying equities because bonds look expensive is a bad rationale.  Equities are saturated with speculative excess based on Fed promises or the perception of promises.  This may work for a while longer, but speculators are likely playing a greater-fool-theory ‘game of chicken’.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ZpTaotnYy-s/story01.htm Tyler Durden

Unaffordable Recreation And The Ratchet Effect

Submitted by Charles Hugh Smith from Of Two Minds

Unaffordable Recreation And The Ratchet Effect

What has caused the cost of recreational activities to rise far faster than wages or official inflation? There is not one cause but many.

Recreational activities that were once affordable to just about every family with earned income have slowly but surely become unaffordable to all but the top 10%.

Longtime correspondent Kevin K. responded to my recent blog entry on recreational vehicles with an eye-opening commentary on the skyrocketing costs of what were once working-class and middle class recreations, boating/fishing and skiing:

“I was just talking to a friend about how expensive it is to go boating. As a kid in the late 70s my great uncle took me fishing in Lake Tahoe in his boat and probably spent a total of $5 (including sandwiches and bait). Last year when I borrowed a friend’s boat I was amazed what it cost just to use it for one day:

  • Tahoe inspection $55 (NA in the 70’s)
  • Tahoe decontamination (guy pouring some bleach in the bilge) $25 (NA in the 70’s)
  • Launch Fee $39 (Free in the 70’s)
  • Parking with Trailer at Launch $20 (Free in the 70’s)
  • Fishing License for one day $14 each person (Not sure of cost, but we didn’t get them)
  • Gas for cars around Tahoe $4.60/gallon (<$0.50 in the early 70’s)
  • Gas for boats on the lake $7.00/gallon (<$0.65 in the early 70’s)
  • Sandwiches and bait (a lot more than the 70’s)

Today (depending on how far you drive and how much fuel you burn in the boat) it will cost $100 to $300 for just one day on Lake Tahoe fishing with one kid.

In the same time period (the late 70s), my Dad (a hero to other parents) would drive me and my sisters and two friends each up to Squaw Valley in our ’73 Dodge Van for the day.

At the time adult lift tickets were $13 and kids under 12 (or who were 13 or 14 and and said they were 12) skiied FREE. We always had peanut butter and jelly sandwiches with dried fruit (that my Mom dehydrated herself with her food dehydrator) and a bag of mini Snickers for lunch. On the way home we would stop at Burger King in Auburn for dinner.

Today the average family makes about 3x what they made in the late 70’s but if an Adult wants to take 9 kids skiing at Squaw last year (I looked and the new rates are not posted yet) it would cost almost $600!! (46x more) at $99 for Adults and $55 for kids (“peak season” tickets last year were over $100 and over $60 around Christmas).

In High School I bought a new pair of ski boots for $53 and used them until well after college when I bought a new pair in the 90’s for ~$300. This past winter I went in to the “Surefoot” custom boot shop in Squaw Valley thinking I have had my boots for over 15 years and I’m doing OK maybe I’ll look in to some custom boots. When the guy quoted me $1,300 I walked out thinking that even if I was worth $50 million I could not spend $1,300 on a pair of ski boots….”

What has caused the cost of recreational activities to rise far faster than wages or official inflation? There are many factors in play; let’s examine a few of the primary drivers of higher recreational costs.

In a follow-up email, Kevin referenced the Ratchet Effect, a dynamic I’ve often covered in the blog: costs advance incrementally with little resistance but any decline faces enormous resistance.

As noted in the blog entry on RVs, one factor is consumer choice: people could still choose to tent-camp or use a rowboat, for example, but instead the majority have opted for the comfort (and perhaps prestige/status) of large RVs, trailers, boats, pickups, SUVs, etc. This reflects the power of marketing and America’s quasi-religious devotion to comfort/convenience as the highest and most desirable good.

The relatively low cost of air travel may also be a factor, as cheap airfare (in the early 1970s, air travel was strictly regulated and high-cost) has enabled millions of people to pursue recreation far from home. A rowboat launched on a local lake is replaced by a rental boat on a distant lake, for example.

Recreation has become name-branded and technologically sophisticated, both of which drive prices higher. Equipment for activities such as golf, fishing and skiing have soared in cost as a result.

An enormous net of regulations designed to increase safety have imposed higher costs on providers, and the out-of-control cost of healthcare in America has further imposed what amounts to a 15% tax on all labor.

Correspondent Ray W. pointed out three additional factors:

1. The need for efforts to protect high-demand public resources from environmental degradation

2. The role of higher population and gains in prosperity in greatly increasing environmental pressure on public resources

3. the shift from paying for government services such as protecting fisheries, water quality, etc. with broad-based income taxes to use taxes/fees levied on users of the service.

These are important elements in higher costs for recreation. The water quality in Lake Tahoe, for example, has been deteriorating for decades as a result of development, and action is required to safeguard the lake’s beauty and ecosystem–the very traits that fuel recreation.

Lakes throughout the nation are at risk of invasive species hitchhiking on water craft, and inspections are one of the few ways this potentially devastating threat can be addressed in an even-handed, organized fashion.

But when do common-sense increases in user fees become revenue-enhancement schemes for state and local governments seeking ways to raise revenues without triggering political blowback? When do regulations stop serving the intended goal and become justifications for increasing agency budgets? These are difficult questions, because any increase in regulations and budget is always “needed” by the agencies receiving the funds.

Is imposing a multitude of fees for activities that were once free really just a user fee? If so, then why don’t we impose the same metric on other government services such as schools (should only people with kids “using” the local schools pay for the services provided? How about those “using” the healthcare system? Should they pay in relation to how much healthcare they’re “using”?)

Affordable recreation may not make the list of entitlement “rights” that many demand, but isn’t recreation as much a public good and resource as highways? In terms of jobs created, I suspect recreation is relatively high on the list of jobs created with relatively low government spending.

I cannot shake the suspicion that recreation is an obvious choice for revenue enhancement because it presumes people with disposable income can afford the higher fees and won’t complain in politically meaningful ways. We complain privately but pony up the higher fees without questioning their validity.

If we add up these dynamics, we find them everywhere in the economy. Recreation is simply one egregious example of how costs rising far faster than wages end up crimping what was once affordable for the majority. Luckily, we still have tent-camping (oops, tents can cost a pretty penny now, too…).


    



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LAX Shooting Update: Gunman Killed By Law Enforcement

And just like that, the shooter, who may or may not have been an off-duty NSA agent (inconclusive data for now), is also dead.


    



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Nasdaq Gives Up: Will Not Unhalt Options Market Today

Just when you thought Healthcare.gov was the worst designed system and that nothing could match government incompetence, here comes Nasdaq, and adding insult to repeated shutdown injury from over the past several months, has just announced it will not unhalt the Options Market before the weekend, and will cancel all open orders. As for the scapegoat: “a significant increase in order entries.” In other words, a blast of HFT quote churn again – just like the flash crash.

From Nasdaq:

On Friday, November 1st at 10:36:57 a.m. ET, NASDAQ OMX halted trading on the NASDAQ Options Market (NOM), one of the exchange group’s three U.S. options markets.

 

A significant increase in order entries inhibited the system’s ability to accept orders and disseminate quotes on a subset of symbols, which resulted in the NOM halt.

 

As equities options trading continues on eleven other venues, including NASDAQ OMX PHLX and BX Options, NASDAQ OMX has determined it is in the best interest of market participants and investors to cancel all open orders on the NOM book at 10:36:57 a.m. ET, and to continue the market halt through the close. Equities trading has not been impacted.


    



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LAX Shooting Update: One TSA Agent Killed, Shooting Suspect Is Off-Duty TSA Agent

At least one TSA agent has been shot dead, while the suspect is aid to be an off-dute TSA agent. Going TSAish? Regardless, just like that, the second wave in Obama’s great anti-gun campaign is about to be launched:


    



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