Shadow Stock Market: Seven And A Half Things To Know

The Shadow Stock Market

A seven-nation army couldn't hold me back, and seven and a half things are all you need to know each day. Here they are:

Thing One: Shadow Stock Market: Like most Americans, you probably can't wait to get yourself some shares of Facebook. If the people you couldn't stand in high school are going to bother you with Farmville requests all the time, you might as well at least get paid for it.

Fortunately for you, there's no need to wait any more for an "IPO" to sell "stock" in a market protected by "the SEC." If you're lucky enough to be a client of, say, Goldman Sachs, you can trade Facebook shares this very day in what is known as a "secondary" market -- an illiquid, opaque bazaar populated by shady characters that is in no way a black market.

OK, maybe it's just a smidgen like a black market. But the SEC is actually starting to police it a bit, Randall Smith and Jane Eaglesham write on the front page of the Wall Street Journal. Reuters has an even longer (and firewall-free) look at the market, and the charges. Regulators have sued a couple of money managers accusing them of "misleading and overcharging" investors in the secondary market, which has boomed because of appetite for Facebook shares.

The market might get even boom-ier if the Senate passes part of a new jobs bill that would make it easier for companies like Facebook to stay private, and keep trading in these murky markets, for longer. SEC chief Mary Schapiro bemoaned the bill at length in a letter to the Senate, the Washington Post writes. The SEC crackdown might just be a subtle effort to draw attention to the issue with publicity. Mission accomplished.

Thing Two: Poor Vampire Squid: By now you've probably heard about spectacularly ex-Goldman Sachs employee Greg Smith's love letter to The Muppets, better known as Goldman Sachs clients, in a New York Times op-ed. We at The Huffington Post hashed out how Smith's belated horror at Goldman's treatment of said muppets was really a Casablanca moment -- to be shocked, shocked, to find that gambling is going on in here! David Levine points out that most clients know they're considered muppets and keep going back to Goldman anyway because where else are you going to go? Bonnie Kavoussi writes that Paul Volcker sees Goldman as one more reason to enact the Volcker Rule, meant to separate banking from trading. the Wall Street Journal writes that Goldman claims to be investigating the claims of Smith, who Goldman also says was a big nobody with a grudge. Meanwhile, author William Cohan tells the Financial Times op-ed pages he finds it interesting that criticism of the firm has spilled out into the public. That hints at turmoil in the belly of the Vampire Squid, Cohan writes, calling this an "existential crisis" for the firm.

Thing Three: Bond Bloodbath: Stocks didn't do much yesterday, but the Dow Jones Industrial Average did manage to tick up to another four-plus-year high. The Nasdaq rose to a fresh dozen-year high. The real action was in the bond market, where traders have suddenly gotten the heebie-jeebies about super-safe Treasury bonds. People bought government debt in bulk last year when they saw the economy slowing down and Europe blowing up and started hoping the Fed would buy more bonds to stimulate the economy. Now that thesis is in doubt, writes Matt Phillips in the Wall Street Journal. The bloodbath in Treasury bonds has pushed interest rates to their highest levels since October -- though they're still pretty low -- and traders are starting to wonder if the Fed will really keep overnight interest rates near zero all the way into 2014.

Thing Four: Data Day: We get a whole truckload of economic data today that will help justify, or not, the recent moves in stock and bond markets. First and foremost, the Labor Department will report weekly unemployment claims. Economists think those dipped a bit to 355,000 from 362,000. If the recent improvement in these claims stalls, that could be a sign that the solid job growth of the past few months could be slowing down. We also get regional manufacturing surveys and a report on wholesale price inflation.

Thing Five: Talking Tapping: President Obama and British Prime Minister David Cameron discussed tapping the U.S. Strategic Petroleum Reserve in an effort to bring down oil and gasoline prices, Reuters reports. "Unleashing emergency stockpiles would almost certainly prompt attacks from Republicans, however, who blame Obama's energy policies for high prices at the pump and could paint an SPR release as a gimmick to appease voters during an election year," Reuters writes.

Thing Six: Iran's Oil Output: One big reason oil and gasoline prices are soaring is because of tensions between the West and Iran. Not only is there fear of a disruptive war with Iran, but Western sanctions have driven Iran's oil output to its lowest level in a decade, the Financial Times writes.

Thing Seven: Falling Food Prices: At least global food prices may be set to fall, a United Nations official said at a conference yesterday, Bloomberg reports. Slowing global economic growth and higher crop output may already be bringing prices down, a relief to millions of people around the world.

Thing Seven And One Half: March Madness: Also falling today: American worker productivity, as the NCAA basketball tournament kicks off in earnest, with several games scheduled during work hours. Though the quality of the teams has declined in recent decades as the best players skip the pretense of education to head straight to the pros, that only makes the tournament more entertaining, writes Michael Rosenberg at CNN/SI.

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