Archive Page 2

Observations/Perspectives on Occupy Wall Street.

Credentials:

  • 39 years on Wall Street
  • Not a member of the 1%
  • Past member of the United Steel Workers
  • ex First Lieutenant US Army Infantry/Paratrooper
  • awarded the CIB (Combat Infantry Badge)
  • Decorated for Valor
  • MBA

Have walked by the Zuccotti twice a day since day one. First impression was that the protestors were orderly, generally young but had too many messages with little binding them together. Anti war protestors (several Viet Nam vets) Communists,  anti Wall Street, and on and on. Some just seemed to be protesting for the sake of protesting, witness a young lady holding up a sign saying “Reagan sucks balls.”The main message has been that there is a growing discrepancy between the haves, the 1% and the rest, the 99%. Whether one is Republican, Democrat, Tea Party, Communist or Anarchist, it is difficult to rationally argue this fact. I absolutely support the right of all Americans to protest any issue that troubles them. My generation marched and protested Civil Rights, the Viet Nam War, Women;s Rights, Gay rights and other issues. My children”s generation have protested almost nothing. We have been involved in two lengthy wars, one lasting 10 years now, and there has been no significant protest. Why? Mostly because it doesn’t affect us directly. Casualties are relatively low, we don’t know many who are directly involved and probably most importantly there is no draft to threaten our military age population. What does affect us all is the present state of the economy and our Government’s inability to deal with the issues. The current situation should not be blamed on either political party. Both contributed to the problem. The failure to find a quick solution and to place the blame on the sitting President also makes no sense. The ebbs and flows of an economy as large as ours cannot be changed/turned quickly. The simple fact is that an inordinately large number of those between the age of 16 and 24 are unemployed and cannot find work. Bureau of Labor Statistics show that 23.9% of those between 16 and 19 are unemployed., 23.6% of those 16 and 17 fall into the same category. 18-19 year olds show 24% unemployed, 13.4% of the 20-24 year olds and 10.3% of the 25-29 year olds. Pretty depressing numbers-its no wonder they are protesting. What the stats do not show but what I am reminded daily, is the number of older workers currently out of work and looking desperately. This includes Wall Street workers who are part of the 99%. I get daily requests from close friends and names I barely know, all asking for help in gaining a job. Several acquaintances who are 99 percenters with 20 years Wall Street experience are in various phases of having their homes foreclosed. Most troubling to me is the reactions of so many to the protest and the protestors. The tourists who come to gawk and make it difficult for the 99 percenters who work on Wall Street by blocking the sidewalks. Some of the 99 percenters who are working on wall Street who are so dismissive of the plight of the unemployed. Several fellow office workers were commenting on the Thursday arrests.”They should get jobs, Shoot them. One wore a t-shirt proudly displaying 1%. Mr. Gingrich declaring in Iowa that the protestors should get jobs but first should take a shower. Is the Protest having an effect? Yes. On Thursday some Wall Street workers were told to stay home. Many came in but were scared. Many more came in but were subjected to much longer commutes. A police officer received 20 stitches in his hand cause by a piece of thrown glass. Are the protestors and the 99% entitled to the same pay as the Wall Streeters/ No.  From watching the newscasts of the protestors and their soundbites some seem to think they are entitled to high pay. In a Communist society that might be true. In America, some are born to more privilege, some with more brain power, some receive better education, some work harder and some are just plain lucky. Wall Streeters fall into all of these possible categories but luck is near the top. Looking back on the Civil Rights movement with many killed over the years, the Anti Viet Nam War movement with 4 killed at Kent State and 2 at Jackson State, at the Student Strike in the early 70’s protesting the invasiion of Cambodia, when 450 Universities, Colleges and High Schools went on strike, when 100,000 gathered in Washington Dc, 150,000 in San Francisco, where 30 ROTC Buildings were burned, it seems we are getting off easily to date. As a member of the Army reserve, I was put on alert to move to Yale University to quell possible riots. Our orders were to use live ammunition. As a protest I transferred to the NAtional Guard- I applaud the protestors basic goals. Deplore the violence. I am pleased that the unions are in support. Believe that most Wall Street workers are not guilty and do not deserve the grief. Finally would be much more enthused if the angst would be directed at our Government in Washington-both sides of the aisle. Its time to put the welfare of the country ahead of party politics.. The lobbies need to be castrated. Politicians need to have their feet put to the fire to serve us. Congress should be made to play by the same rules as most of us on Wall Street-NO Insider Trading. Keep protesting but in a more Ghandi like way. Prosecute the policeman at UC San Diego who indiscriminately used pepper spray. Prosecute the Wall Streeters who cheat and steal. eliminate the lobbies or at least cool their influence Thinking back to the period right after 9/11 I was struck by how well we treated each other. Were all pulling together. Lastly, though a veteran, I am not  in support of either of our current wars. The one good thing that has come from them as opposed to the Viet Nam War is that there is almost universal support for those serving. When I mustered out and went to see my wife on a college campus, I was spat upon because I wore a uniform. Today we thank our returning veterans. That is a major step forward. Lets redirect our anger at Washington where it surely belongs. Things will get better, they always do. Problem is after they get better they always get worse again. The cycles are different but they are the same. remember 9/11 and lets support each other and all pull in the same direction otherwise we are no better than our government.

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ETF Seed Capital Revisited May 2009

There has been an increasing incidence of new ETF issues being unable to come to market because no Market Maker sees to fit to put in for the allocation of the product.
The question is whether the lack of an interested Market Maker occurs because the prospective product has little or new merit or is there another possible explanation.
A quick analysis of the roughly 30 products that have launched in 2009 indicated that most have been fairly successful. The lack of interest in new products therefor would appear to be for other reasons.
Historically, Market Makers have provided the initial seed money to bring shares to market, much like an equity IPO. The reward for becoming the Lead Market Maker, or Designated Market Maker was a slightly larger liquidity payment on an electronic platform(ARCA or NASDAQ). If listed on the AMEX, prior to its sale, the advantage was that fewer Market Makers could easily trade no Specialist(LMM) products if the MM was also a Specialist on the AMEX.
With the demise of the AMEX floor, all ETFs are now traded totally electronically with the volume split between NASDAQ, ARCA and DirectEdge in descending order of volume. The net result is that there is little advantage to being a Lead Market Maker other than the 10 cent additional liquidity payment an LMM receives from ARCA. The risk is that the new issue will sell slowly resulting in the LMM having money tied up in seed with its consequent cost.
The result is that many Market Makers are telling Issuers that they will gladly trade their products if they sell quickly and show good daily trading volume but have little or know interest in tying up capital in seed.
The result is that good potential products may not make it to market hurting both Issuers and investors.
This situation has become compounded by the enforcement of an ARCA rule which requires an LMM to maintain certain levels of participation or losing the product and the additional liquidity payment. If the product is a slow grower the LMM gets to keep it with the consequent seed commitment. If after a short or long period of time the product becomes active and successful, the LMM who made the initial commitment runs the risk of losing the LMM designation and the liquidity payment kicker.
The response of the Market Maker-why provide seed? Just trade the ones that are successful with high volumes.

Post Cards from Our Youth

While visiting my mother this Easter Sunday, my siblings and I came upon a box of postcards which various family members had written and/or received while we lived in Switzerland between 1955 and 1961.

The first is from my brother Jeff, written to my parents. My brother and I were Swiss Boy Scouts(Eclaireurs Suisse). The program was run entirely by the scouts-no parental involvement. On longer camping trips we were accompanied by a young man in his early twenties-who also served in the Swiss Army.
Jeff was 12 or 13 at the time and I was 2 years younger.
Dear Family,
Yesterday we climbed a mountain which took about 6 hours round trip.We walked on snow and almost everybody got their

feet wet but me. We went swimming in a

shallow mountain pool full of freezing water. I swam naked. I stood naked in some snow. It was neat. I got your cards. Love Jeff.

Untold in the card was the fact that climbing the mountain(11,000 feet high) we had to climb down a snow cliff on ropes. The ropes didn’t quite reach the bottom of the precipice so we had to let go and slide the last 50 feet and were hopefully snagged by two of the older scouts who had climbing expertise and and descended a steep rock face.
When we read the various postcards even my practically mute mother laughed.

GREEN AND PEACENIKS-UNKEMPT

MY WIFE AND I FOLLOWED OUR NEWEST 4TH OF JULY TRADITION OF ATTENDING THE PARADE IN BATH, MAINE. THIS BEING AN ELECTION YEAR, BOTH NATIONAL PARTIES WERE WELL REPRESENTED. IT WAS AMUSING TO HEAR THE ONLOOKERS HECKLING THE REPUBLICANS WITH COMMENTS LIKE “GOOD LUCK IN NOVEMBER” AND SUCH. OF NOTE, THE REPUBLICANS WERE GENERALLY BETTER GROOMED THAN THE DEMOCRATS.

WE WERE SITTING NEXT TO A YOUNG COUPLE AND IN PASSING CONVERSATION WE FOUND THAT THE HUSBAND WAS PERMANENT CADRE IN THE MAINE NATIONAL GUARD. HIS COMMISSION WAS FIELD ARTILLERY (INFERIOR TO AN INFANTRY MOS) BUT TO HIS CREDIT HE HAD ATTENDED JUMP SCHOOL AT FORT BENNING AND BEING A PARATROOPER MADE HIM IN MY EYES.

WHILE WE PROBABLY WERE AT OPPOSITE ENDS OF THE SPECTRUM RELATIVE TO OUR CURRENT WAR, WE WERE BOTH STRUCK BY TWO OF THE GROUPS MARCHING (AND I USE THE WORD LOOSELY). THE FIRST WAS A  LARGE GROUP OF NAVAL AVIATORS UNDOUBTEDLY FROM THE BRUNSWICK NAVAL AIR STATION. WHILE LOOKING SHARP IN THEIR UNIFORMS, THEY MEANDERED UP THE STREET IN NO PARTICULAR ORDER. WE BOTH COMMENTED THAT WE JUDGED SUCH GROUPS BY THEIR ABILITY TO MARCH IN STEP.

FOLLOWING SEVERAL GROUPS BEHIND WAS A MID SIZED GROUP CARRYING SIGNS SUPPORTING ALL THINGS GREEN AND FOR THE BETTERMENT OF THE ENVIRONMENT. INTERSPERSED IN THIS GROUP WERE MEMBERS CARRYING ANTI-WAR SIGNS,BAN THE BOMB ETC. THE NATIONAL GUARD OFFICER AND I BOTH COMMENTED ON THE ’60’S LIKE LOOK OF THIS GROUP. LONG HAIR, BEARDS AND THE GENERAL LOOK OF A DISHEVELED MOB. THE COMMENTS OF THE ONLOOKERS WERE MILDLY CAUSTIC. 

WHY IS IT THAT SUCH IMPORTANT ISSUES AS OUR ENVIRONMENT AND THE IRAQ WAR PROTESTS ATTRACT PEOPLE WHO SEEM TO BE ON THE FRINGE. WHERE ARE THE LAWYERS AND BUSINESS PEOPLE IN THEIR SUITS? OR ARE WE JUST TOO AFRAID OR TOO LAZY TO MARCH AND TO SHOW OUR TRUE FEELINGS?

Reflections on Viet Nam versus Iraq

On June 14th, I was asked to host the breakfast at the American Stock Exchange celebrating Flag Day and the 233rd Birthday of the United States Army.  I was once again surprised by how few of my generation had served. There are only roughly 15 veterans of any of the services in an exchange population of almost 1000.

During the course of the breakfast and the roughly two hour visit, I was struck by the fact that there was a tremendous difference between how the current members of the Army and other services are being treated compared to my service time in the late sixties. As the Army representatives walked around the floor, they were cheered and thanked profusely for their service. Many members of the Exchange stopped trading in order to shake hands with the Army contingent. When I mentioned the warm response to the Lieutenant Colonel and the Command Sergeant Major, they both commented that the same thing happens in airports and even on the streets> While both were warmed by the welcome, they both expressed some embarassment. The command Sergeant Major had joined at the end of the Viet Nam Conflict and remembered how different those times were.

I related my experience returning home in 1969. Upon release from the Army in late May, I caught a plane from Seattle Tacoma Airport to Boston. My wife was about to graduate from Mt Holyoke College where she had finished her senior year while I was overseas. I was dressed in uniform with the bloused boots and Overseas Cap(known by another name) typical of US Army Airborne. Upon arrival on the Mount Holyoke Campus, I found my wife’s dorm. Walking up the front steps I encountered two young ladies. They proceeded to spit on me and call me a pig.

Whether one agrees with either the Viet Nam War or the present War in Iraq (and I don’t particularly agree with either), I am more than pleased that the bulk of the American population are supportive of those who serve. During the Viet  Nam Era a large portion of those who served were conscripted. While I volunteered, those who were drafted didn’t deserve the abuse they took. They were simply doing their duty. The present military are mostly volunteers (the National Guard might be seen as reluctant volunteers ) and deserve our unqualified support.

Thank you to all who serve and thank you the American public who support them openly regardless of you view of the Iraq War. We are better for your support.

Interesting New Products

Greenhaven launched a new Commodity ETF last thursday. The symbol is GCC and it is based on the old CCI(Continuous Commodity Index).  The Index has 17 commodities equally weighted. The bulk of the other Commodity based ETFs are heavily weighted with the energy sector. With 9000 shares on day one and 21,000 shares on day two it looks like a favorable launch.Van Eck launched a gaming ETF, symbol BJK.  While not moving quickly the first two days it appears to be a product with some hope.On the Municipal ETF front there continues to be signs of success. After a relatively slow start, there is some growth in AUM in the Barclays, Powershares and State Street lists. Van Eck offerings have been slower but like the others national products they should gain some momentum. 

Municipal ETFs

Van Eck has joined the fray with their long term offering MLN. Typically the first day results were spotty but that has been the norm for new issues.All of the long term National Municipal ETFS have sold well and the seed money has been finished. Barclays MUB, SSGA’s TFI and Powershares PZA all continue to sell well and grow in assets. Of some interest is the fact that the NY and Calif Muni ETFS are starting to show some real movement. INY, and CXA from SSGA, NYF from Barclays, PZT and PWZ from Powershares are all showing a pick up in sales. Likewise SSGAs short offering of SHM has doubled its AUM and Powershares PVI(short VRDO) continues to show consistent sales and consequent growth. What was moribund in November has become lively in late December and early January. The yields still look attractive.