Today one of the legends in the business sent King World News an incredible piece which highlights an astonishing situation in which the Russians are alleged to have used a Super-Weapon against a U.S. warship. Below is the remarkable piece which all KWN readers around the world must read.
By Art Cashin Director of Floor Operations at UBS
November 24 (King World News) – “On this day (-1) in 1637 the government official in charge of New York City complained about the difficulty of managing the place. The city, at the time, used the stage name of New Amsterdam. The frustrated head of government was not the mayor but rather the Dutch appointed Governor – – one William Kieft, to be exact.
Kieft's frustration was how did the town get so wacky so fast. Less than three decades before, it consisted merely of two tiny and temporary trading huts. (Near what is today 45 Broadway.) Within a couple of years (and before those newcomers to the north – – the Pilgrims – – had found Plymouth Rock), New Amsterdam already had a group of hard talking, hard dealing permanent residents.
But Kieft's concern was not that life was slipping by in a New York (er…make that a New Amsterdam) minute. He worried that as the commerce grew (and moved closer to the Wall, which gives Wall Street its name) the way business was getting done was getting unique. He noted that at one out of four buildings the primary commodity sold was alcohol and/or tobacco. What, he wondered, would become of a place where 25% of everything was a saloon.
Kieft need not have worried. Nothing much happened in New York in the next 377 years. To celebrate go to a juice bar and sit in the non-smoking section – – but don't expect to get much business done.
Traders were hoping to get more than a little business done Friday as central banks opened the spigots and asset classes responded.
U.S. Stocks Spike At Open, Fade Into Early Afternoon Then Are Rescued By Expiration – The Peoples Bank of China shocked markets and traders with a surprise cut in interest rates. That was followed by Mario Draghi announcing that the ECB was buying asset backed securities. That caused an explosion in European markets. By the time the NYSE was set to open, the German Dax was up the equivalent of 463 Dow points. The Dow, itself, opened up “only” 174 points and soon began to sputter. The sputter soon turned into fading prices as Brent crude slid below $80. The fade in the Dow continued until about 1:00, when Brent began to firm up again.
The next influence on the stock market was the Expiration, or, more correctly, the early look for the “market on close” orders. At first look (circa 2:00), the market on close orders looked rather heavily to the sell side. The first indication was for a little over $800 million to sell on balance. Stock prices began to ease in response.
By 2:30, however, the outlook was not so glum. The selling imbalance fell to $500 million and then $200 million. Prices began to steady and then to firm.
The final hour saw prices steady to a touch better as Brent stayed above $80 and the on close orders basically paired ff.
Final NYSE volume was over a billion shares thanks in no small part to the 300 million shares that traded on the bell.
Incredible If True – There's a James Bond kind of story rumbling around in Russian circles and is beginning to pop up in the blogosphere. My friend and fellow market veteran, Jim Brown over at Option Investor picked up the story in his weekend note. Here's a bit from Jim's note:
In April an unarmed Russian SU-24 tactical bomber flew over the USS Donald Cook in the Black Sea and using an electronic warfare weapon disabled the entire ship. This is important because the Donald Cook is an Aegis equipped guided missile destroyer. The Aegis weapons system is the most integrated and advanced combat weapons system the U.S. has available.
The ship carries 56 Tomahawk missiles in standard mode and 96 in attack mode and can launch nuclear missiles. It also has more than 50 antiaircraft missiles. The Aegis weapons system can link to all the other ships in the area to enable tracking of hundreds of targets in real time. It is also installed on NATO's most modern ships.
The SU-24 had only an electronic warfare pod and no bombs or missiles. The electronic warfare device is called a Khibiny. The device disabled all radars, control circuits, computer systems, information transmission systems, etc. After the first pass that disabled all fire control the plane circled around and made a simulated missile attack on the destroyer, not once but 12 times before flying away. The Donald Cook immediately headed for a port in Romania for repairs.
Over the years that I've known Jim and followed his work, he's demonstrated himself to be a consummate professional. This story, however, is bizarre enough to be taken with a grain of salt. Large enough to be carried in a wheelbarrow. How could something so dramatic have been kept secret for months? Wouldn't some of the sailors have told the story to friends and family?
At any rate, the story is beginning to circulate and forewarned is forearmed. Ain't the internet wonderful?
Consensus – Thanksgiving week has about a 70% bullish bias. Nothing spectacular – up about 1% to 1.5%. My esteemed colleague in London, Paul Donovan cautioned that the China cut may not be aimed at stimulus but to "improve cash flow for the indebted". Travel plans and even Thanksgiving may be challenged by bad weather all along the East Coast. Stay wary, alert and very, very nimble.
IMPORTANT – KWN has many more interviews being released today.
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