Hybrid News

Filed under: Ethanol

There are plenty of perfectly valid arguments against the use of ethanol, particularly from food crops. However, one major one may be about to come off the table: transporting the alcohol fuel. Kinder Morgan Energy Partners is the largest independent pipeline operator in the United States. The company has recently completed successful test of sending ethanol through one of its pipelines in Florida. The ethanol was transported between Tampa and Orlando. Kinder Morgan will be making some additional modifications to its pipeline system before it starts offering commercial ethanol transport to customers in mid-November. The company is also updating tanker trucks and terminal facilities to support ethanol distribution. One of the primary issues with ethanol distribution via pipelines has been corrosion, forcing it to be distributed by tanker. It’s not actually the alcohol that is the problem, but rather the water content. Alcohols have an affinity for water which can be absorbed. The water is what actually causes the corrosion. It’s not clear what Kinder Morgan has done to overcome this problem, but it’s certainly a step in the right direction.

[Source: Kinder Morgan]

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Original post by Sam Abuelsamid

We just published the following Trader Update:

3:27pm 09/23/2008
NYSE Trader Update
Today’s Close
Consistent with the NYSE understanding of SEC Short Sale Rule and upon advice from the SEC, the NYSE will conduct a normal close today for its securities. NYSE expects its Specialists to close their securities using standard closing procedures.

And I just caught Duncan on Fox Business News explaining that NYSE is working out with the SEC a solution for the specialists to be able to make markets in view of the short-sale restrictions. Am on the run at the moment but will try to post a link to the interview.

UPDATE: There appears to be no direct link to individual videos, but it’s currently on this page under the category “Financial Turmoil.”

Original post by Tim Allik

Tuesday’s opening brings another 40 issues to the list of NYSE-listed stocks on the do-not-short list. This Trader Update has the names, even in a handy Excel spreadsheet.

An amusing little historical tidbit today:

Today in NYSE History
23 Sep 1933 — The New Jersey Stock Exchange was created as the NYSE planned to move operations to Newark in order to avoid a city stock transfer tax. The tax was dropped and the NYSE stayed put in New York City.

Let’s be glad for that. No knock against my native New Jersey, but the New Jersey Stock Exchange just doesn’t have the same ring to it.

Original post by Tim Allik

We just issued a Trader Update with the latest on the SEC’s short-sale order, including the addition of 31 issues. A link to the Update is here, and following is the text:

Revised SEC Short Sell Order
22 Sep 2008

(Updated with compiled list of NYSE-Listed Companies from 09/19/08 and today, 09/22/08) Please note that Credit Suisse Group has been added to the list, and that GLG Partners, Inc, listed in earlier communications as “LG” has been revised with its correct symbol, “GLG”.

[Here is the Excel spreadsheet of included issues.]

Please be advised that, effective immediately, the SEC has revised its temporary emergency action with respect to the Order prohibiting short selling in financial firms. As there are material differences in the application of the prohibition, you should read the new SEC order, which can be found at: http://www.sec.gov/news/press/2008/2008-218.htm. The SEC has informed us that all companies that were covered by Friday′s order will also be covered by the newly revised short sale prohibition. The SEC has delegated to each national securities exchange the authority to identify additional listed companies that qualify for inclusion in the list of companies covered by the revised prohibition. The additional companies must be in one of the following categories:

-Banks, as defined in 15 U.S.C. 78c(a)(6),
-Savings associations, as defined in 15 U.S.C. 78c(a)(46),
-Registered brokers or dealers, as defined in 15 U.S.C. 78c(a)(48),
-Insurance companies, as defined in 15 U.S.C. 80a-2(a)(17),
-Banks, savings associations, brokers, dealers and insurance companies that are similar to those covered by the foregoing statutory definitions but which are regulated by a foreign (rather than U.S.) regulatory authority,
-US and foreign investment advisors, both registered and unregistered,
-Companies that control or have majority ownership of companies that meet one of the above criteria.

According to the SEC, companies that were on the original list attached to Friday’s Order, or that fall into one of the categories expected to be covered by the new order, may opt out of the application of the revised short sale prohibition by informing the NYSE of that determination. The list of additional NYSE-listed financial firms that meet the revised criteria follows. This list is subject to amendment, and we will notify you of any changes in subsequent notices. We hope that this correspondence will assist you in preparing your systems prior to the opening of trading today.

NYSE-Listed Companies Added to the List as of Monday Morning, Sept. 22, 2008

CS Credit Suisse Group
GLG GLG Partners, Inc.
GE General Electric Co.
OCN Ocwen Financial Corporation
KBW KBW, Inc.
GFG Guaranty Financial Group Inc.
MFG Mizuho Financial Group, Inc.
FMR First Mercury Financial Corporation
STC Stewart Information Services Corporation
FCF First Commonwealth Financial Corporation
MTB M&T Bank Corporation
DFS Discover Financial Services
BMO Bank of Montreal
TD Toronto Dominion Bank
CM Canadian Imperial Bank of Commerce
FMD The First Marblehead Corporation
BBV Banco Bilbao Vizcaya SA
CIB BanColombia SA
LM Legg Mason, Inc.
NFP National Financial Partners Corp.
AXP American Express Company
CIT CIT Group Inc.
GM General Motors Corporation
HIG The Hartford Financial Services Group
ADS Alliance Data Systems Corporation
ALD Allied Capital Corporation
RAS RAIT Financial Trust
DRL Doral Financial Corporation
FSR Flagstone Reinsurance Holdings
MCO Moody’s Corporation
COF Capital One Financial Corporation

On Friday night, I asked a colleague what he expected of this week, and he said it’s going to get a lot more quiet; his reasoning was, what else can happen? Looking at this morning’s press, looks like he spoke a little too soon.

Original post by Tim Allik

I was on the trading floor at the open today, and it felt like it hadn’t felt in months — more people, more intensity, a lot of capital being put to work. I’ve got to tell you, it felt good. I don’t know if it was the quarterly expiration, the market rally, the news on short selling, the news on a federal solution to the financial crisis, or some combination of these. It wouldn’t surprise me if today’s participation by the trading floor in NYSE volume is again markedly higher than in the recent past.

I also understand from a Dow Jones reporter’s inquiry as well as a comment from Dinosaur Trader that there were some errroneous print on NYSE Arca this morning, and these are in the process of being resolved.

As for the numbers:

Today’s first half-hour NYSE record was 992.2 million shares; the previous record was 807.6 million shares on March 20, 2008.

Today’s first-hour NYSE record was 1.2 billion shares; the previous record was 957.5 million shares, set on March 20, 2008.

Original post by Tim Allik

A colleague tells me that NYSE floor brokers′ algorithms handled a record 92 million shares this crazy day — three times the record set just last week. I also heard that the trading floor’s participation rate in trading on the NYSE is up 40 percent this week.

I see both of those developments as a vote for high-touch when markets are rough and volatile. The floor has high-tech tools, such as the broker algos, but there’s a human behind them, not some bot you can’t call. Old School meets New.

A broker stopped me on the floor after the close and told me that his firm had to call in someone who left the floor not long ago to help keep up with the overflow of orders. He said customers increasingly are looking for someone to “work” their orders.

At the same time, our quote and trade systems today set 24 message-traffic records between them, with several of those records eclipsing the previous record in the same system only seconds before. We aim to give you access to the market when you need us most, and today, knock wood, the market was available throughout an extraordinary day.

There were a record 611 million quotes, plus 179 million orders and 194 million reports. Share volume was approaching a record high, last I looked. We handled a record number of away quotes, as did every other market. The industry is processing an unbelievable amount of stuff, and today everything seemed to hold up rather well.

Didn’t hurt that the market rebounded.

Well, Thursday’s on the tape. Just one more to go. One more, quarterly-expiration, index-rebalancing, who-knows-what-the-news-will-bring day to go.

Original post by Tim Allik

A number of you have said that NYSE needs to change the Liquidity Replenishment Point (LRP) ranges so that the LRPs aren’t triggered as often. Yesterday we filed a proposal to double the ranges. Here’s an excerpt (footnotes omitted):

Pursuant to NYSE Rule 1000(a)(iv), LRPs are pre-determined price points that function to moderate volatility, improve price continuity, and foster market quality in a particular security by temporarily converting the electronic market to an auction market and permitting new orders, the Crowd, or the specialist, to add liquidity. Pursuant to NYSE Rule 60, Autoquote is suspended when an LRP is reached and resumes in no more than five to ten seconds after the LRP is reached. Autoquote resumes unless there is interest on the NYSE Display Book® system that would lock or cross the market. In such case, Autoquote will resume with a manual transaction.

LRPs are calculated by adding and subtracting a value to the security’s last sale price. The LRP values are based on an examination of trading data and vary based on the security’s NYSE average daily volume (“ADV”), price, and volatility. The values used to calculate the LRP’s range do not change intraday and are disseminated daily by the Exchange on its website.

Modification to LRP Value Ranges

The Exchange proposes to amend NYSE Rule 1000(a)(iv) to double the current LRP ranges in order to limit the number of times that an LRP is reached and the total number of times during the trading day that automatic execution is suspended as a result of an LRP being triggered. In this way the Exchange will allow for more continuous automatic executions of securities. While the purpose of the LRP is to dampen volatility and to provide market participants with time to react, the Exchange believes that the proposed amendment is necessary to lessen artificial limitations on trading and will ultimately provide beneficial trading opportunities for its customers. As a means of controlling volatility, LRPs are intended to be triggered infrequently, i.e., when the market is experiencing a large price movement (based on a security’s typical trading characteristics or other market conditions) over short periods of time during the trading day. If an LRP is triggered too frequently, trading in the security is overly restrained and does not meet the competitive needs of NYSE customers. As such the NYSE believes that doubling the current LRP value ranges will better facilitate the natural trading pattern of a particular security.

Original post by Tim Allik

Just a reminder, the quarterly expiration of stock and index options and futures takes place tomorrow, 19 Sept. Plus, after the close, Standard & Poor’s will conduct a quarterly share rebalancing of its S&P 500, MidCap 400, SmallCap 600 and REIT Composite Indices. Here is the NYSE Information Memo that describes related procedures.

Hope the market is treating you a bit better today. Some historical trivia for your Thursday afternoon:

Today in NYSE History (NYSE.com)
18 Sept. 1873 — The brokerage firm Jay Cooke &amp Co. went bankrupt, setting off the Panic of 1873.

Original post by Tim Allik

That’s three days in a row; first time I remember that happening. Says something about the times we live in.

Here’s the alert that announces that Rule 48 will be in effect again today on NYSE, meaning that pre-opening indications are not required.

Just one more reminder: if you’re not already subscribing to our System Status alerts and Trader Updates, I can′t think of a better time to sign up. No shortage lately of information on newsmaking stocks, trading halts, product updates, system issues, etc. Here are the instructions to subscribe.

As McCartney said, it’s just another day. Be glad that it is. Hope it brings you something good. When you think about it, it already has. On this day seven years ago, we re-opened the markets for the first time following 9/11. Today’s events, serious and historic as they are, pale in comparison to the tragedy of seven years ago.

Original post by Lutz Deyerling

Just got the alert that Rule 48 will be in effect again today on NYSE, meaning that pre-opening indications are not required.

If you’re not already subscribing to our System Status alerts and Trader Updates, you might want to consider it — lately we’ve been putting out a pretty steady stream of information on newsmaking stocks, trading halts, product updates, system issues, etc. The instructions to subscribe are on the page, and I’m told that an upcoming release will make subscribing even easier.

Today in NYSE History, a look back at a tragic event:

16 Sept. 1920 — A bomb exploded on Wall Street, killing 30 people and injuring 100 others. Though police suspected the bomb was planted by radicals, the perpetrators were never found.

Original post by Lutz Deyerling

September 1901: The cornerstone of the NYSE building is laid.

As a reminder, Rule 48 says:
1) It is not mandatory to publish pre-opening indications.
2) Hold onto your hats, or grab onto some part of your person.

The actual text of Rule 48 (OK, without No. 2 above) is printed at the bottom of this post, for your reference.

I thought that today, when the foundations of finance are being shaken, might be an appropriate day to run the photo at top, courtesy of my AECs (Archival-Expertise Colleagues) Steve Wheeler and Janet Linde. The cornerstone of the New York Stock Exchange’s current building was laid in September 1901. One hundred and seven years later — and 216 years after the signing of the Buttonwood Agreement, a copy of which was put into that cornerstone — may your employer (and mine) continue to stand in the face of the current tempest.

And may today and the days to come turn out to be not as cataclysmic as widely expected, given the historic news from this weekend and this morning. As recounted by the New York Times:

In one of the most dramatic days in Wall Street’s history, Merrill Lynch agreed to sell itself on Sunday to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, said it would seek bankruptcy protection and hurtled toward liquidation after it failed to find a buyer.

The humbling moves, which reshape the landscape of American finance, mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees as a result of hundreds of billions of dollars in losses because of bad mortgage finance and real estate investments.

But even as the fates of Lehman and Merrill hung in the balance, another crisis loomed as the insurance giant American International Group appeared to teeter. Staggered by losses stemming from the credit crisis, A.I.G. sought a $40 billion lifeline from the Federal Reserve, without which the company may have only days to survive.

OK. Here’s that Rule 48 text.

Rule 48. Exemptive Relief — Extreme Market Volatility Condition

(a) In the event that extremely high market volatility is likely to have a Floor-wide impact on the ability of specialists to arrange for the fair and orderly opening of trading at the Exchange and that absent relief, the operation of the Exchange is likely to be impaired, a qualified Exchange officer may declare an extreme market volatility condition with respect to trading on or through the facilities of the Exchange.

(b) In the event that an extreme market volatility condition is declared with respect to trading on or through the facilities of the Exchange, a qualified Exchange officer shall be empowered to suspend (i) the need for prior Floor Official or prior NYSE Floor operations approval to open a security at the Exchange and/or (ii) applicable requirements to make pre-opening indications in a security. Such suspension is subject to the following provisions:

(1)(a) Before declaring an extreme market volatility condition, the qualified Exchange officer shall consider the facts and circumstances that are likely to have Floor-wide impact for a particular trading session, including volatility in the previous day’s trading session, trading in foreign markets before the open, substantial activity in the futures market before the open, the volume of pre-opening indications of interest, evidence of pre-opening significant order imbalances across the market, government announcements, news and corporate events, and such other market conditions that could impact Floor-wide trading conditions.

(b) Such review shall be undertaken in consultation with relevant officials of NYSE Market and NYSE Regulation, as appropriate. Following the review, the qualified Exchange officer or his or her designee shall document the basis for declaring an extreme market volatility condition.

(2) The qualified Exchange officer will make a reasonable effort to consult with the staff of the Securities and Exchange Commission before declaring an extreme market volatility condition and granting a suspension of the NYSE rules or procedures. In the event that the qualified Exchange officer cannot reach the Commission staff, the qualified Exchange officer will, as promptly as practicable in the circumstances, inform the Commission staff of such declaration, the basis for such declaration, and what relief has been granted.

(3) An extreme market volatility condition may only be declared before the scheduled opening or reopening following a market-wide halt of securities at the Exchange.

(4) A declaration of an extreme market volatility condition shall be in effect only for the trading session on the particular day that the extreme market volatility condition is determined to exist. The Exchange may declare a separate extreme market volatility condition on subsequent days subject to sections (b)(1) through (b)(3) above.

(5) A declaration of extreme market volatility shall not relieve specialists from the obligation to make pre-opening indications in situations where the opening of a security is delayed for reasons unrelated to the extreme market volatility condition.

(c) For purposes of this Rule, a “qualified Exchange officer” means the Chief Executive Officer of NYSE Euronext, Inc., or his or her designee, or the Chief Executive Officer of NYSE Regulation, Inc., or his or her designee.

Original post by Lutz Deyerling

I don’t mean to turn this space into your daily fix of news about Nasdaq’s problem last Monday with old UAL news becoming new, market-moving news, but the Wall Street Journal did report today that the SEC would take a look at the situation.

And I couldn′t resist just one more article, this one from Reuters, for three reasons.

Automated trading bites some UAL investors (Reuters.com, as picked up by The Guardian in the U.K.) — Computers, unable to see the mold on an outdated UAL Corp article, sparked confusion, a mass sell-off, and an emergency trading halt earlier this week that highlights the pitfalls of increasingly automated financial markets.

The first reason is right there: “…see the mold on an outdated UAL Corp. article…” Mold — that’s just good writing.

The second reason is the quote from my occasional correspondent Jamie Selway:

“You’re taking human judgment out of the news processing. Ninety-nine times out of 100 you get good results, but this is a pretty glaring exception.” said Jamie Selway, managing director of institutional broker White Cap Trading.”Savvier people will benefit, and the art is knowing when someone is trading on bad information,” said Selway, who focuses on market structure.

Last but definitely not least is my personal favorite, the very last end of the article, which I wish were higher, but I’m not going to quibble because I think this is the first piece to note the difference in markets.

The example of UAL, which is traded on the Nasdaq Stock Market, once again highlights the difference between Nasdaq’s all-electronic platform and the hybrid platform operated by NYSE Euronext.

On Nasdaq, erroneous trades are corrected afterward, while on the NYSE, specialists on the trading floor can halt abnormal stock drops as they happen.

The latter — human oversight — is disappearing from the landscape of financial markets, although it may have softened the blow for UAL on Monday.

A Nasdaq spokeswoman said the exchange operator halted trading in UAL stock after it was contacted by the company.

Emphasis mine. Have a good weekend, my friends.

Original post by Lutz Deyerling

Filed under: Hybrid, Manufacturing/Plants, MPG, GM

With a federal election coming soon in Canada, the Conservative government of Prime Minister Stephen Harper has begun to liberally spread the pork. The most recent example is a deal that will relieve General Motors of Canada from the repayment of $200 million in previous government loans in exchange for new investments in plants in Oshawa and St. Catharines Ontario. GM Canada will install a transmission assembly line at its engine plant in St. Catharines to build 6-speed automatic transmissions. GM has also committed to building a hybrid version of a new mid-size sedan at the Oshawa assembly plant. Over in the discussion forums at GM Inside news there is speculation that this could finally be a hybrid rear wheel drive sedan based on the Zeta platform that is used for the Camaro that is also being built in Oshawa.

Unfortunately for enthusiasts, this is an unlikely scenario and here’s why. The transmissions to be built in St. Catharines will be front-wheel drive units. GM probably chose to build them there in part because of the proximity to Oshawa so they will probably be used there. All recent indications from GM are that the previously planned RWD replacement for the Impala built at Oshawa will never happen. Instead, an updated front wheel drive model with the 6-speed will be assembled. The 2010-11 timing of the launches does correspond with the second generation GM mild hybrid system which could be used with the 6-speed rather than the far more expensive two-mode system. Given the market and CAFE realities, a direct injected, turbo four cylinder, front wheel drive Impala with a second generation mild hybrid is probably what we’ll see from Oshawa in early 2011.

[Sources: Industry Canada, Globe and Mail, GM Inside News]

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Original post by Sam Abuelsamid

Filed under: EV/Plug-in, NEV (Neighborhood Electric Vehicle), North America

The recent lifting of the low speed vehicle (LSV) ban in Quebec has shone the light of discovery on another electric vehicle manufacturer getting ready to go gangbusters. In Ste.-Therese, Quebec, very close to where the Chevrolet Camaro plant was once located, sits the home of Nemo. Locally designed and manufactured, their vehicle, the Must HD2 has garnered interest from 50 municipalities within “La Belle Province” as well as from individuals. Company president, Jacques Rancourt, says they’ve sold 15 trucks in the past week and a half since their legal status changed and now expects to move 500 units this year.

The Must HD2 sells for around $20,000, is built on an aluminum chassis and can handle a 1,000 lb payload. Being an LSV, it’s limited to 25 miles an hour but has a 70 mile range. Since it’s made in the North, it does has a robust heater and many options ranging from lithium ion batteries to an AM/FM radio with CD player. We think it’s a pretty cool looking truck, seemingly capable of handling a range of chores and so we wish the makers of this little brute, “Bonne chance!”.

[Source: Nemo / Canada.com]

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Original post by Domenick Yoney

Filed under: Hybrid, Legislation and Policy

The tax credits that the federal government offers for buying hybrid vehicles are tied to sales. As the sales of any given model exceed 60,000 units total, the tax credit is phased out. The Toyota Prius is no longer eligible for federal tax credits, although some states still offer money back. Fortunately other manufacturers haven′t yet sold as many hybrids as Toyota and are still eligible.

One of those is Peterbilt. Peterbilt offers a hybrid system developed by Eaton on some of their class 6, 7, and 8 medium and heavy duty trucks. The class 6 and 7 trucks are are eligible for tax credits of $6,000 and $12,000 respectively. These machines won’t fit in most garages but if you have a need for a utility boom truck or you need to deliver furniture, these vehicles should save you some money on fuel costs. You can even get a class 8 tractor trailer with the hybrid system. Interestingly, unlike any of the current crop of automotive hybrids, the Peterbilts actually use lithium ion batteries. No plug-ins though.

[Source: Peterbilt, thanks to Mike for the tip]

 

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BOLD MOVES: THE FUTURE OF FORD Step behind the curtain at Ford Motor. Experience the documentary first-hand.

Original post by Sam Abuelsamid