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While You Were Working – March 21

Playing fast and loose with flash crashes, the FCA's slow roll, Zuck says a whole lotta nothin, John Deere caught in headlights, and FS-ISAC urges Patriot Act update

3 min read

Modern Money

John Deere

John Deere is sweating Trump's tariffs (Scott Olson/Getty Images)

Programming note: While You Were Working is going on Spring Break. Publishing will resume Thursday, March 29.

The “Flash Crash” of February 5?

This story in the FT reminded me of something odd I noticed at FIA Boca last week. Numerous speakers and other executives kept referring to the “flash crash” on February 5. I remember the market tanking on February 5 (and 6), but I don’t think a crash that transpires over a couple of days should really be referred to as a “flash crash”. Flash crashes take place in minutes and seconds, not days.

Back to the FT piece, the authors claim to have no idea why prices of overnight index swaps would spike amid all the market volatility. I am gonna go out on a limb and guess that some market participants thought the market dive was the beginning of a major collapse. Those people were probably betting the Fed would be more likely to raise rates if it felt it had to do so to counter a stock market collapse.

Well, at least those OIS bets were right!

Those people betting the Fed would raise rates today were right. Makes it kind of odd that at its super spike peak, the OIS only predicted a 39% chance of a rate hike.

Mark Zuckerberg ended his silence

But he didn’t say much.

A Deere caught in tariff headlights

There are few companies that scream “American” more than John Deere. It might not be as iconic as baseball, Budweiser, Ford and apple pie, but John Deere still oozes Americana. In fact, my friend in France once bought his toddler son a John Deere hat because when they think of America, they think of riding on a John Deere through wheat fields somewhere in the Heartland.

That is why I find it hard to believe we now live in a world where an American company like John Deere is fretting about how the Trump administration’s Make America Great Again trade policies are going to harm its bottom line. Strange days, indeed.

Better late than never

The funny thing about this announcement by the UK’s Financial Conduct Authority that it is launching a review of it how it doles out fines and other penalties it the timing: The FCA first said it would conduct such a review four years ago.

And keep in mind, today’s announcement is about how the review is beginning. Who knows how long it will be until the review actually concludes; let alone how long it will be before the review’s findings are transformed into changes. Yikes.

WYWW Appetizers