STOCK MARKET WATCH -- Monday, 14 September 2015

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Monday, 14 September 2015[font color=black][/font]

SMW for 11 September 2015

AT THE CLOSING BELL ON 11 September 2015
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Dow Jones 16,433.09 +102.69 (0.63%)
S&P 500 1,961.05 +8.76 (0.45%)
Nasdaq 4,822.34 +26.09 (0.54%)


[font color=black]10 Year 2.19% 0.00 (0.00%)
[font color=red]30 Year 2.95% +0.01 (0.34%) [font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]
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(click on link for latest updates)
Market Updates
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
Wall Street on Parade
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[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
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Matt Taibi: Secret and Lies of the Bailout


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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.
08/01/13 Fabrice Tourré convicted on six counts of security fraud, including "aiding and abetting" his former employer, Goldman Sachs
08/14/13 Javier Martin-Artajo and Julien Grout charged with wire fraud, falsifying records, and conspiracy in connection with JP Morgan's "London Whale" trade.
08/19/13 Phillip A. Falcone, manager of hedge fund Harbinger Capital Partners, agrees to admit to "wrongdoing" in market manipulation. Will banned from securities industry for 5 years and pay $18MM in disgorgement and fines.
09/16/13 Javier Martin-Artajo and Julien Grout officially indicted on charges associated with "London Whale" trade.
02/06/14 Matthew Martoma convicted of insider trading while at hedge fund SAC (Stephen A. Cohen) Capital Advisors. Expected sentence 7-10 years.
03/24/14 Annette Bongiorno, Bernard Madoff's secretary; Daniel Bonventre, director of operations for investments; JoAnn Crupi, an account manager; and Jerome O'Hara and George Perez, both computer programmers convicted of conspiracy to defraud clients, securities fraud, and falsifying the books and records.
05/19/14 Credit Suisse, which has an investment bank branch in NYC, agrees to plead guilty and pay appx. $2.6 billion penalties for helping wealthy Americans hide wealth and avoid taxes.
09/08/14 Matthew Martoma, convicted SAC trader, sentenced to 9 years in prison plus forfeiture of $9.3 million, including home and bank accounts
08/03/15 Former City (London) trader Tom Hayes found guilty of rigging global Libor interest rates. Each fo eight counts carries up to 10 yr. sentence.
08/21/15 Charles Antonucci Sr, former pres. Park Ave. Bank sentenced to 2.5 years in prison for bribery, fraud, embezzlement, and attempt to steal $11MM in TARP bailout funds, as well as $37.5MM fraud on OK insurance company. To pay $54MM in restitution and give up additional $11MM.







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[font size=3][font color=red]This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.[/font][/font][/font color=red][font color=black]

[Demeter]

1. It's the character of the characters...

[Demeter]

2. UAW Chooses Fiat Chrysler As Target In Contract Talks

IF YOU AREN'T FAMILIAR WITH THE UAW (LIKE THE NATIVE-BORN DETROITER I AM), THEIR STRATEGY IS TO PICK ONE AUTO FIRM TO PUT THE SQUEEZE ON, WITH THE UNDERSTANDING THAT WHATEVER THE VICTIM AGREES TO CONTRACT FOR LABOR, THE REST OF THE FIRMS WILL, TOO.

IT'S NOT JUMP ROPE WE'RE PLAYING, HERE.

http://detroit.cbslocal.com/2015/09/13/uaw-chooses-fiat-chrysler-as-target-in-contract-talks/

The United Auto Workers union said Sunday that it chose Fiat Chrysler as its target company in ongoing contract negotiations with Detroit automakers. Fiat Chrysler – the smallest of the three companies – now becomes the focus of bargaining and could be hit with a strike if negotiations stall. As WWJ’s Autobeat reporter Jeff Gilbert says just about every analyst said that Fiat Chrysler was the least likely to be the lead company.

A deal with FCA will also set a general pattern for contracts at General Motors and Ford. All three companies officially kicked off bargaining for new four-year contracts in July. The current contracts expire Monday but likely will be extended. The contracts cover around 140,000 U.S. factory workers.

In a statement, UAW President Dennis Williams said all three automakers are “working hard” to reach an agreement and will continue negotiating even as the UAW turns its focus to FCA. FCA confirmed its selection but said it would have no further comment. Williams may feel that he can get the best deal from Fiat Chrysler and pattern that deal with the other two automakers notes Gilbert.

“Historically speaking they go past the deadline, tomorrow night at midnight and they’ve never met it in recent years, probably recent decade, they’ve not struck at that deadline – they continue to bargain. So, it’s very unlikely that they will have a contract before that midnight deadline tomorrow night but who knows this is a surprise we may have another one,” says Gilbert.

Kristin Dziczek, director of the industry and labor group at the Michigan-based Center for Automotive Research, says the choice of FCA – the smallest and least profitable of the Detroit Three – signals a different attitude at the UAW, which used to go after the most profitable automaker during negotiations.

“This is the recognition that the union has had for a while, that you can’t destroy the companies and still have jobs,” she said.

Still, this year’s talks were expected to be the most contentious in years because all three companies are healthy and making money. The union wants a piece of the profits in the form of hourly pay raises for longtime workers who haven’t had one in a decade. The UAW also wants to close the wage gap for entry-level workers, who make about half the $29 hourly wage of veteran employees. The wage gap benefits FCA the most, since 45 percent of its hourly workers make entry-level wages. Only around 20 percent of workers at Ford and GM make the lower wage....

[Demeter]

3. Here’s what another government shutdown could look like By Robert Schroeder

http://www.marketwatch.com/story/heres-what-another-government-shutdown-could-look-like-2015-09-11?siteid=YAHOOB

In less than three weeks the federal government could partially shut down if Congress doesn’t act. So, what would that look like? If past is prologue, national parks and the National Zoo would be shuttered; many federal employees would be furloughed; and food inspections would be delayed. But if the most recent shutdown — in 2013 — is an indication, unemployment-benefit checks will go out, and Americans will keep getting their mail delivered through the U.S. Postal Service. A USPS spokesperson confirmed delivery would not be affected since the postal service relies on income from stamps and other fees to keep running, and doesn’t depend on the congressional appropriations process.

Washington is staring down a Sept. 30 deadline to keep the government open, and right now, there’s no resolution in sight. On Thursday, House Speaker John Boehner said it’s not “his goal” to shut down the government over the issue of funding Planned Parenthood. Some conservatives want to cut off federal dollars for the provider of women’s reproductive health services.

Also on Thursday, White House press secretary Josh Earnest urged Republicans to start budget negotiations with Democrats. The White House wants Congress to lift spending caps for domestic spending, not just for the military. Earnest said there is a “regular process” for federal agencies to prepare for a shutdown but added he did not know if those had begun or not. A MarketWatch request for more information from the Office of Management and Budget was not immediately answered.

Congress hasn’t passed a single spending bill for the fiscal year that begins Oct. 1.

The last time the government shut down was Oct. 1-16, 2013, after a fight over Obamacare. About 850,000 federal employees were furloughed immediately after funding ran out, according to a White House report. But most civilian employees of the Defense Department went back to work after a week, following passage of the Pay Our Military Act. More than 8,000 workers at the Social Security Administration were recalled as well, to ensure benefits were processed. Budget expert Stan Collender of Qorvis MSLGroup points out presidents have the authority to determine which activities will continue during a shutdown.

“There’s no agreed-upon list of what’s essential and what’s not, and the president can (and typically does) change the list as a shutdown continues,” Collender told MarketWatch in an email.

FASTEN YOUR SEAT BELTS; IT'S GOING TO BE A BUMPY AUTUMN. MORE AT LINK

[Demeter]

4. Fed to hike? The problem is, it might not matter Alex Rosenberg

http://www.cnbc.com/2015/09/13/fed-to-hike-the-problem-is-it-might-not-matter.html



The Federal Reserve may or may not elect to raise its target on the federal funds rate when it meets on Thursday. Yet either way, the much-anticipated decision is unlikely to have nearly as great an impact on the economy as it might have 30 years ago.

Such is the argument in a recently released paper from the Kansas City Fed, which posits that changes in financial markets and the American economy have reduced the import of changes to the interbank lending rate.

Before 1985, an unexpected 25 basis point cut in the federal funds rate would have led to a 0.2 percent increase in employment over the next two years, the study noted. But in the post-1994 period, the effect on employment is statistically insignificant, find Jonathan Willis and Guangye Cao of the Kansas City Fed.

This is obviously problematic, given that the Fed describes its ultra-low interest rate target as intended to "support continued progress toward maximum employment." If the impact of a shifting fed funds rate target on employment is indeed nil, then this strategy makes little sense.

Perhaps even more troubling, it means that the Fed's primary tool for helping the economy has been, at best, severely blunted...

[Demeter]

5. Fed clarity won’t help to ease stock market volatility

http://www.marketwatch.com/story/fed-clarity-wont-help-to-ease-stock-market-volatility-2015-09-13

‘Volatility is so extreme that it is making it very difficult to make rational decisions’

By Thursday, the market will have the answer to its favorite guessing game: Will the Federal Reserve pull the trigger on the first interest-rate hike since 2006? But clarity on the Fed’s stance will do little to shield the stock market from further volatility.

“Given the high volatility and very opposite and strong views on the Fed, I would expect market volatility to continue,” said Paul Nolte, portfolio manager at Kingsview Asset Management, who projected the central bank could raise rates on the strength of employments numbers.

The Federal Reserve will convene its two-day Federal Open Market Committee starting on Wednesday to decide on the monetary policy, with analysts divided on the outcome.

“The FOMC will drive the train on Thursday but I do not expect them to raise rates,” said Ian Winer, director of equity trading at Wedbush Securities. Still, regardless of the Fed’s decision, volatility is likely to pick up, he added.

Kent Engelke, chief economic strategist at Capitol Securities Management Inc., meanwhile, believes volatile market swings could play a hand in dissuading the Fed from a rate hike even if it does not reference it in its statement.

“This will not be their public justification for the lack of a rate increase. I believe the FOMC will utilize global economic conditions and the lack of stated inflationary pressures to delay the inevitable,” he said.

The CBOE Market Volatility Index VIX, -4.80% also referred to as the fear gauge, spiked in late August and has remained elevated on uncertainties ahead of the FOMC, combined with mounting concerns about China’s sputtering economy.

“Volatility is so extreme that it is making it very difficult to make rational decisions given the absence of a concrete reason to explain these violent moves,” said Engelke. He blames high frequency traders and their preference for a few large-cap shares for the recent market swings.

“I think the markets are overly influenced by high frequency trading and the exchange traded funds, strategies that are partially dependent upon momentum and moving average lines,” he added.

MORE

[Demeter]

7. Gold Bulls Can't Shake Fed Woes as $2.6 Billion Wiped From ETPs

http://www.bloomberg.com/news/articles/2015-09-13/gold-bulls-can-t-shake-fed-woes-as-2-6-billion-wiped-from-etps

Gold bulls can’t shake the specter of higher U.S. interest rates as Federal Reserve policy makers gather this week.

Prices are trading near a one-month low, investors are dumping holdings through exchange-traded products, and the metal’s volatility is rebounding. A resilient U.S. job market and dollar strength are adding to gold’s woes, spurring money managers to cut their bets on a rally by more than a third.

More than $2.6 billion was wiped from the value of gold ETPs in the past three weeks as investors awaited the central bank meeting. While Fed-fund futures show lowered expectations for monetary tightening this week, traders are still pricing in more than a 50 percent chance for a rate increase by the end of the year. Higher borrowing costs reduce bullion’s allure because it doesn’t pay interest, unlike competing assets such as bonds.

“The likelihood is the Fed moves this year, and for now a tighter Fed and stronger dollar are both keeping a lid on gold,” said Rob Haworth, a senior investment strategist in Seattle at U.S. Bank Wealth Management, which oversees $127 billion. “When I look at the gold market, that’s the biggest overriding factor.”

MORE

[Demeter]

6. What It’s Like To Live On $2 A Day In The United States By Chico Harlan

http://www.washingtonpost.com/news/wonkblog/wp/2015/09/11/what-its-like-to-live-on-2-a-day-in-the-united-states/

In the United States, we often talk about poverty as a line: You are above it or below it; you escape it or can’t get out of it. Every year, the government defines that line with a number. Right now, if you’re in a family of four, you’re considered poor if you get by on less than $16.60 per day.

What we tend to ignore, though — and almost never bother to quantify — is the vast spectrum of poverty itself. And that’s why a new book, “$2 a Day: Living on Almost Nothing in America,” by Kathryn J. Edin and H. Luke Shaefer, is so eye-opening. It exposes in devastating detail the lives of millions of Americans who aren’t just in poverty, but extreme poverty, the kind you’d normally associate with the developing world. Edin and Shaefer crunched census data and other numbers and calculated that 1.5 million American households are surviving on no more than $2 per day, per person. They also found that the number of households in such straits had doubled in the previous decade and a half.

It’s worth pondering for a moment just how difficult it is to survive on $2 per day. That’s a single gallon of gasoline. Or half a gallon of milk. If you took a D.C. bus this morning, you have 25 cents left for dinner. Among this group in extreme poverty, some get a boost from housing subsidies. Many collect food stamps — an essential part of survival. But so complete is their destitution, they have little means to climb out. (The book described one woman who scored a job interview, couldn’t afford transportation, walked 20 blocks to get there, and showed up looking haggard and drenched in sweat. She didn’t get hired.)

Edin is a professor specializing in poverty at Johns Hopkins University. Shaefer is an associate professor of social work and public policy at the University of Michigan. In several years of research that led to this book, they set up field offices both urban and rural — in Chicago, in Cleveland, in Johnson City, Tenn., in the Mississippi Delta — and tried to document this jarring form of American poverty.

Here is what they found about the lives of the extreme poor:

1. Most are not receiving welfare assistance. ...The government safety net has been “built on the assumption of full-time, stable employment at a living wage,” the authors write. But the new labor market “fails to deliver on any of the above.”

2. They depend on a shadow (and sometimes illegal) economy. The characters in “$2 a Day” often go long periods virtually without any cash. But they also need to pay their bills. So they sell social security card numbers of their children (allowing others to reap the tax rewards). They purchase Kool-Aid, freeze it into popsicles, and sell the treats out of their home at a small profit. They trade their food stamps for cash — at a brutal 60 cent-on-the-dollar exchange rate. These practices have something in common: They are illegal. In the name of survival, the extreme poor get by with acts that make their stomachs churn. Edin said in an interview that this erodes their sense of self-worth, even if they don’t get into legal trouble...

3. They donate plasma as a way to get cash.

According to authors, this is a lifeline among the extreme poor: For those can’t find jobs, they can still earn money by donating their plasma, a component in blood that is used by hospitals. The extreme poor show up at clinics, allow a needle to withdraw blood from a spot near the top of their forearm, and they walk away with $30 for three hours of their time. They’re allowed by law to do this twice a week. No matter that donating sometimes comes with debilitating fatigue in the aftermath. Many poor have “divots inside their elbow,” Edin said in an interview, as a testament to the practice...

4. They aren’t disconnected from the workforce.


MORE DETAILS AT LINK

[Demeter]

8. Wall Street Banks to Settle CDS Lawsuit for $1.87 Billion

http://www.bloomberg.com/news/articles/2015-09-11/wall-street-banks-reach-settlement-on-cds-lawsuit-lawyer-says

Some of Wall Street’s biggest financial institutions -- including Goldman Sachs Group Inc., JPMorgan Chase & Co., Citigroup Inc. and HSBC Holdings Plc -- have agreed to a $1.87 billion settlement to resolve allegations they conspired to limit competition in the lucrative credit-default swaps market.

The banks reached an agreement in principle with a group of investors that includes the Los Angeles County Employees Retirement Association, Daniel Brockett, a lawyer for the group, told a judge in Manhattan federal court on Friday. The sides need seven to 10 more days to iron out some details, Brockett said.

A settlement would avert a trial following years of litigation by hedge funds, pension funds, university endowments, small banks and other investors, who sued as a group. They alleged that a dozen global banks -- along with Markit Group Ltd., a market-information provider in which the banks owned stakes -- conspired to control the information about the multitrillion-dollar credit-default swap market in violation of U.S. antitrust laws. The banks “made billions of dollars in supracompetitive profits” by taking advantage of “price opacity in the CDS market,” the investors said....

DETAIL AT LINK

[Ghost Dog]

9. Global debt levels are dangerously high and central banks cannot keep the game going indefinitely

The Bank for International Settlements said the wild market ructions of recent weeks and capital outflows from China are warning signs that the massive build-up in credit is coming back to haunt, compounded by worries that policymakers may be struggling to control events.

"We are not seeing isolated tremors, but the release of pressure that has gradually accumulated over the years along major fault lines," said Claudio Borio, the bank's chief economist.

The Swiss-based BIS said total debt ratios are now significantly higher than they were at the peak of the last credit cycle in 2007, just before the onset of global financial crisis. Combined public and private debt has jumped by 36 percentage points since then to 265pc of GDP in the the developed economies.

This time emerging markets have been drawn into the credit spree as well. Total debt has spiked 50 points to 167pc, and even higher to 235pc in China, a pace of credit growth that has almost always preceded major financial crises in the past...

/more... http://www.telegraph.co.uk/finance/economics/11858952/BIS-fears-emerging-market-maelstrom-as-Fed-tightens.html

... So a 'jubilee', a reset of the debt-driven financial system, will be necessary, it will be being said, to rescue the central and other systemic banks and other financial structures. This as well as 'rewiring', as Pope Francis put it, economic systems (things such as replacing the outworn GDP concept with some measure more representative of General Social & Environmental Health), I aver. - GD

[Demeter]

10. A "reset" is not a fix

I'm convinced by Richard Wolff that Capitalism in the raw is inherently unstable and central bankster debt-making has got to go.

Whatever replaces Capitalism--and I think it has no name yet--will have to provide negative feedback (like taxing the Obscenely Wealthy out of existence) to create a stable mechanism for economic activity.

[Ghost Dog]

11. Agree.

[Demeter]

12. Was Tom Hayes Running the Biggest Financial Conspiracy in History?

http://www.bloomberg.com/news/articles/2015-09-14/was-tom-hayes-running-the-biggest-financial-conspiracy-in-history-

... It was Sept. 15, 2008, and it looked, he would later recall, like the end of the world.

Tom Hayes had been woken at dawn in his apartment by a call from his boss, telling him to get into the office immediately. In New York, Lehman Brothers was plunging into bankruptcy. At his desk, Hayes watched the world process the news and panic. Each market as it opened became a sea of flashing red as investors frantically dumped their holdings. In moments like this, Hayes entered an almost unconscious state, rapidly processing the tide of information before him and calculating the best escape route.

Hayes was a phenom at UBS, one of the best the bank had at trading derivatives. All year long, the financial crisis had been good for him. The chaos had let him buy cheaply from those desperate to get out, and sell high to the unlucky few who still needed to trade. While most dealers closed up shop in fear, Hayes, with his seemingly limitless appetite for risk, stayed in. He was 28 years old and he was up more than $70 million for the year. Now that was under threat. Not only did Hayes have to extract himself from every deal he’d done with Lehman, but he’d made a series of enormous bets that in the coming days, interest rates would remain stable. The collapse of the fourth-largest investment bank in the U.S. would surely cause those rates, which were really just barometers of risk, to spike. As Hayes examined his tradebook, one rate mattered more than any other: the London interbank offered rate, or Libor, a benchmark that influenced $350 trillion of securities around the world. For traders like Hayes, this number was the Holy Grail. And two years earlier, he had discovered a way to rig it.

Libor was set by a self-selected, self-policing committee of the world’s largest banks. The rate measured how much it cost them to borrow from each other. Every morning, each bank submitted an estimate, an average was taken, and a number was published at midday. The process was repeated in different currencies. During his time as a junior trader in London, Hayes had gotten to know several of the 16 individuals responsible for making their bank’s daily submission for the Japanese yen. His stroke of genius was realizing that these men mostly relied on interdealer brokers, the fast-talking middlemen involved in every trade, for guidance on what to submit each day. Hayes saw what no one else did because he was different. Hayes’s intimacy with numbers, his cold embrace of risk, and his manias were more than professional tics; they were signs that he’d been wired differently since birth. Hayes would not be officially diagnosed with Asperger’s syndrome until 2015, when he was 35, but his coworkers, many of them savvy operators from fancy schools, often reminded Hayes he wasn’t like them. They called him Rain Man. Most traders looked down on brokers as second-class citizens, too. Hayes recognized their worth. He’d been paying them to lie ever since he had.

By the time the market opened in London, Lehman’s death was official. Hayes instant-messaged one of his brokers in the U.K. capital to tell him what direction he wanted Libor to move. “Cash mate, really need it lower,” he typed, skipping any pleasantries. “What’s the score?” The broker sent his assurances, and, over the next few hours, followed a well-worn playbook. Whenever one of the Libor-setting banks called and asked his opinion on what the benchmark would do, the broker said—incredibly, given the calamitous news—that the rate was likely to fall. Libor was often called “the world’s most important number,” but this was how it was set: conversations among men who were, depending on the day, indifferent, optimistic, or frightened. When Hayes checked later that night, he saw to his inexpressible relief that yen Libor had fallen.

Hayes was not out of danger yet. Over the next three days, he barely left the office, surviving on three hours of sleep a night. As the market seesawed, his profit and loss in one stretch went from minus $20 million to plus $8 million in just hours. Amid the bedlam, Libor was the one thing Hayes had some control over. He cranked his network to the max, offering his brokers extra payments for their cooperation, and calling in favors at banks around the world. By Thursday, Sept. 18, Hayes was exhausted. This was the day he’d been working toward all week. If Libor jumped today, his puppeteering would have been for naught. Libor moves in increments called basis points, equal to one one-hundredth of a percentage point, and every tick was worth roughly $750,000 to his bottom line.
For the umpteenth time since Lehman faltered, Hayes dialed one of his most trusted brokers in London.

“I need you to keep it as low as possible, all right?” Hayes said. “I’ll pay you, you know, $50,000, $100,000, whatever. Whatever you want, all right?”

“All right,” the broker repeated.

“I’m a man of my word,” Hayes said.

“I know you are. No, that’s done, right, leave it to me,” the broker said.

Hayes was still in the office when that day’s Libor was published at noon in London. The yen rate had fallen one basis point, while comparable money market rates in other currencies continued to soar. Hayes’s crisis had been averted. Using his network, he had personally tilted one of the central pillars of the planet’s financial infrastructure. He pulled off his headset and headed home to bed. He’d only recently upgraded from the superhero duvet he’d slept under since he was 8 years old....

[Demeter]

13. Gasoline $2.19 today in Ann Arbor (finally)