Wild Market Ride Has Investor Watching the Clock: Opening Line

Our guy called about 12:20 yesterday afternoon Eastern time. By then the rout was on, way on, with the Dow industrials losing, what -- 350 points in the first 10 minutes? He wanted to warn us about 1 p.m.

That’s when he suspected the margin calls -- or maintenance calls as they’re sometimes called now -- were going to start coming in. At his firm, he explained, they don’t make those calls as long as the client’s equity remains above 30 percent, but once it drops below that, you have to sell three-and-a-half times as much stock to cover the account, and selling three-and-a-half times as much stock puts huge downward pressure on everything.

Once you get into the margin calls, it just feeds on itself for a while, he tells us. Usually a customer has three days to work it out, but in times of horrible stress -- like yesterday was for a little while there -- there won’t be any grace period. You cover now or you’re getting liquidated.

Everything had seemed to hit all at once and right at the open: oil crashing, CNN’s Sanjay Gupta climbing in and out of Ebola suits as we learned the virus had spread to a second health-care worker in Texas -- who had inexplicably been allowed to fly to Cleveland in the interim, gold soaring, the dollar tanking, Greek bonds tumbling. Our guy said he’d never seen as much information washing over him at the same time, and he started making a joke about Depend adult diapers.

Except he didn’t really laugh. (We did, though.)

Sure enough, right around 1 p.m. New York time, maybe a few minutes after, the floor gave way again. The Dow was trading at 15,960 as the clock struck one, down about 350 points, and by about 1:30 p.m., we’d lost another 104 points. Another run at that level happened about 15 minutes later, taking us to 15,855 and change, down 460 points. At the same time, the 10-year Treasury yield, which had plummeted to 1.8622 percent by 9:38 a.m., had recovered to about 2 percent and a fraction, but the worst was past there.

The mutual funds and the hedge funds were working overtime. Then came “The Last Hour.” It would be worth watching, he said, and especially the market-on-close orders. When he said that, we were assuming the worst. If we were off 460 with most of the afternoon to go, well. When was the last time we bothered to check the 401(k) plan, again?

Then about an hour later, with the industrials having recouped about 116 points, Rich Miller and the U.S. economy team, in one of the more propitiously timed scoops we’ve seen in a while, flashed the headline that Yellen had expressed confidence during a private meeting last weekend in the U.S. economy’s ability to withstand the current headwinds.

Maybe that was a turning point, maybe not.

So we got back on the phone with our guy for the last hour, or some of it, and it was a thing to behold. Like the Eagles having their way with the Giants defense last week, that crazy little line started its climb. The offense started moving the ball right around the time of the headline, with the Dow at 15,947.

About 45 minutes later -- 15 minutes into the last hour -- it was at 16,088. Then another leg down, and then a real power surge, and with 15 minutes to go, we were at 16,185, a gain of 332 points from the day’s low point. Finally tally, 1.06 percent loss on the day. Not even the worst day this month.

We don’t know much about market psychology, but resilience is pretty easy to spot.


Today’s U.S. economic indicators begin with initial jobless claims at 8:30 a.m. EDT, followed by industrial production at 9:15 a.m., Bloomberg consumer comfort and Bloomberg economic expectations at 9:45 a.m., the Philadelphia Fed and NAHB housing market index at 10 a.m., and TIC flows at 4 p.m.

It’s a big earnings day in the U.S., with 27 companies scheduled to report as of this writing. Those reporting before the market opens include Goldman Sachs, UnitedHealth, PPG, Blackstone, BB&T, Mattel and Fifth Third. After the bell: Athenahealth, Capital One, AMD, Schlumberger, Delta and Google, among others.


- Apple unveils (again) new versions of its bigger iPad and the iPad mini, and may provide an update on its OS X Yosemite operating system when Tim Cook takes the stage around 10 a.m. in Cupertino, California, 1 p.m. EDT. - Obama will travel to Long Island, New York, so stay off the LIE. UPDATE: This trip was canceled late last night. - NOAA issues its winter outlook at 11 a.m. EDT. - McDonald’s will be the target of an “International Day of Action” protest. - Coincidentally, it’s World Food Day. - Biden speaks in Philadelphia at noon on the need for spending on infrastructure. - Putin is traveling to Serbia, probably to check out how defenseless it is. - Later, Putin will attend the Asia-Europe Business Forum in Milan, his first meeting with leaders from western Europe since the Ukraine crisis. Merkel, Cameron and Chinese Premier Li Keqiang also are scheduled to attend. - Jimmy Choo is expected to price its IPO in London, with trading to begin tomorrow. Zayo Group Holdings also prices today. - Thomas Frieden, director of the CDC, speaks to the House Oversight Committee’s subcommittee on energy and commerce about Ebola at noon in Washington. - The Bloomberg Link conference program holds its Next Big Thing Summit starting at 8:30 a.m. in New York. - Michigan legislature votes to block direct sales of Tesla cars. - Pentagon closes ranks after New York Times reports soldiers were exposed to chemical weapons in Iraq. - Report on Airbnb due today from New York attorney general to show breadth of illegal activity. - Arkansas voter-ID law struck down by state Supreme Court. - J.P. Morgan Corporate Challenge also hacked. - Iran nuclear talks...ah, who knows. They’re still talking, at least. - Bermuda’s about to get creamed by Hurricane Gonzalo. - FBI warns U.S. businesses of Chinese hacking effort now under way. - Arizona’s no-bail policy for illegal immigrants struck down by appeals court. - Carl Levin backs no-fly zone in Syria. - Lululemon store in Buffalo experiments with latest retail strategy of insulting your customers by mocking city’s sports teams’ painful, historic losses. - Eugene O’Neill, America’s only Nobel Prize-winning playwright, was born in 1888 at the Barrett House on 43rd & Broadway in what was then called Longacre Square.


It would have been really great if U.S. Chamber of Commerce President Tom Donohue, aka Chicken Little, had been as available to comment for our story today about the absence of any of the most dire consequences of the Affordable Care Act as he was when making those claims.

Whatever. The law passed in 2010, here it is 2014, and now people without a steady job can see a doctor. The sky didn’t fall.

Meanwhile, insurance premiums for companies that offer health benefits increased less than 3 percent this year, the lowest rate in 16 years, and none of the more than 600,000 employers who use Automatic Data Processing’s payroll management intend to cut health benefits for full-time workers in response to the law, Alex Wayne and Thomas Black report.

Yet still you have some businesses, notably restaurants, that began adding surcharges to bills to cover the expense before they had even started providing health care to their employees. Like the Gator’s Dockside restaurant chain in Florida, which claimed that without the 1 percent surcharge, “the costs associated with ACA compliance could ultimately close our doors.”

Here’s what you do, guys: Sell more deep-fried gator poppers or whatever it is you people eat in Florida.


There will be a moment not too long from now when you’re watching television, perhaps even channel surfing, while sitting inside a train. You might even be at home. The one thing that will be missing is the TV.

Time Warner Inc.’s move to finally offer HBO online, free of any subscription to cable TV, will be the day you remember when you’re watching “Mary Tyler Moore” reruns on your tablet or phone, or whatever the device will be by then, while waiting for your flight.

CBS said it’s considering following suit with its Showtime cable channel, which is causing some Netflix investors to check the rearview mirror.

We’re old and still watch things like our local TV news and could care less about Game of Thrones, so our obscenely expensive cable/phone/Internet bill is probably going to remain a fact of life and remain one reason the dog only eats every other day. But we know many “cord-cutters,” as they’re described in the overview of the watershed moment by Crayton Harrison, Scott Moritz and Doni Bloomfield.

Not only TV, but the telephone as well; they live off of a mobile phone entirely. These tectonic shifts are here to stay, so might as well capitalize on them, we figure Time Warner is thinking, even though the policy appears to have an element of cannibalizing the company.

It also should hasten nascent legislative efforts in Washington to force cable-TV providers to offer channels a la carte instead of the bundling of certain tiers that include channels you’ll never, ever watch.

Next, the end of movie theaters for first-run films.


We’ve never used Gare du Nord, one of the major train depots in Paris, but we’ve been through Gare de Lyon a couple times and that was interesting enough. New York’s Penn Station has a seamy side. It’s just that the ones in Paris are in a different language.

Part of this, we’ll venture, has to do with what we perceive as the French tendency just to endure things that others, namely Americans, would set about to fix right away. “C’est normal,” they’ll say with a shrug -- it’s normal that standing outside a train station waiting for a ride or smoking a cigarette leaves you vulnerable to an unrelenting onslaught of panhandlers and skells.

At the same time, for a casual tourist, it’s got a certain gritty charm. But that would surely evaporate if you had to use the station with any frequency, let alone daily. And since it’s the first thing that welcomes those travelers to Paris, it’s understandable that it’s being held up as a symbol of decline. And it is.

“Nothing works and worse, nobody cares,” John Lewis Partnership Managing Director Andy Street sniffed, comparing Gare du Nord (roughly, “North Station") with the ‘‘modern, forward-looking’’ St Pancras, the Eurostar station in London.

Mr. Street, you know the French love nothing more than to annoy the Brits, right?

Things are changing, though. They’re already setting about to fix it up, and maybe afterward the roving vomiteers described by Angeline Benoit today will find it too difficult to hang around. Or too luxe to think about going anywhere else.


How ’bout those Royals? Pretty easy team to like, the way they play National League-style small-ball over in the American League. The AL wild card team finished off the AL East champion Baltimore Orioles in four straight games, winning yesterday 2-1 for Kansas City’s first pennant since 1985, when they won it all.

The chances for an all-Missouri World Series are growing fainter, however. The San Francisco Giants defeated the St. Louis Cardinals 6-4 to take a 3-1 series lead. Game 5 is today at 5 p.m. in San Francisco, 8 p.m. EDT.

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