Cramer's Game Plan for Week of December 22, 2014

Week in Review (Dec 15-19)

Week in Review (Dec 15-19)

The most notable events of the week were (1) continuing pressure on crude oil (2) extreme volatility in the Russian Ruble and (3)  FOMC meeting. 

The negative momentum in oil price continued as the OPEC (representing the producers) and the IEA (representing the consumers) lowered their demand forecast for 2015. WTI fell steadily from ~$75 on November 26 to ~$54 by December 16. It tested the $54 level again on December 18/19 before bouncing to $57 to close the week.

Russian Ruble came under pressure after the Central Bank unexpectedly hiked the rate to 17% on December 16 after stopping currency intervention on November 10. The volatility in the currency subsided substantially despite disappointing end of the year press conference by President Putin as the Finance Ministry gave support to the currency and the Central Bank temporarily suspended accounting rules for companies with foreign debt.

This week's FOMC meeting, the last one for the year, was closely watched especially because the expectation was for the Fed to remove the word "considerable period” from the Statement in preparation for a hike around mid-year. Investors were surprised when that phrase stayed in the Statement but confused because they were not sure whether it had the same or a different meaning. The vagueness of the Statement was somewhat clarified by the Fed Chair Yellen at her post-FOMC press conference. She said unequivocally that the Fed will raise interest rate in 2015 but not in the next 2 meetings unless the economy rolls over unexpectedly. Stock markets, which had been under tremendous pressure owing to the sharp fall in oil price and collapse in energy stocks rallied after the Fed decision. By the end of the week, they were back within a striking distance of all-time highs. Even lower guidance from FDX was not able to stop the upward momentum. The best performing stocks for the week were mostly Energy.Volume on Friday was high because of Quadruple Witching.

Monday

• Japan, PM Abe won an easily victory in the snap election. The LDP and Komeito took 326 seats in the lower house, more than the 317 needed for a two-thirds supermajority but voter turnout was 52%, the post-war low.
• Japan’s Tankan large manufacturing index slid to 12 in the fourth quarter of 2014 slightly below market expected and prior reading of 13 in 3Q.
• China revised 2013 GDP by 1% to 3% while the PBoC said growth in 2015 could slow 7.1% from 7.4% in 2014.

Tuesday

• China HSBC flash PMI weaker: 49.5 vs. 49.8E.  
• German ZEW current situation better: 10.0 vs. 5.0E.
• German preliminary composite PMI misses: 51.4 vs. 52.3E.
• Russian rubble under severe pressure amid 6.5% hike in the rate.

Wednesday        

• Fed Chair Yellen was able to reassure investors at her post-FOMC press conference.
• Copper hit new cycle low (below 285).
• The Russian finance ministry announced earlier today that it will sell dollar cash in a total amount $7bn over an unspecified period, starting today.
• FedEx gave negative guidance.

Thursday

• Swiss National Bank introduces negative IR (-.25)
• German Dec expectations survey better: 101.1 vs. 100.5E
• Putin's end of year press conference

Friday

• BoJ Policy Statement: Maintains pace to increase monetary base at rate of ¥80T (as expected).
• German consumer confidence better: 9.0 vs. 8.8E.
• Equity volume was very high because it was Quad witching day.

 

Friday Fun

Man Breaks No. 1 Rule of Meeting Women on the Subway

nymag.com, 16-Dec-14

By Jessica Roy

 

Jeffrey Frankel - Why Are Commodity Prices Falling?

Why Are Commodity Prices Falling?

By Jeffrey Frankel, 15-Dec-14

 

Oil prices have plummeted 40% since June – good news for oil-importing countries, but bad news for Russia, Venezuela, Nigeria, and other oil exporters. Some attribute the price drop to the US shale-energy boom. Others cite OPEC’s failure to agree on supply restrictions.

 

But that is not the whole story. The price of iron ore is down, too. So are gold, silver, and platinum prices. And the same is true of sugar, cotton, and soybean prices. In fact, most dollar commodity prices have fallen since the first half of the year. Though a host of sector-specific factors affect the price of each commodity, the fact that the downswing is so broad – as is often the case with big price swings – suggests that macroeconomic factors are at work.

 

So, what macroeconomic factors could be driving down commodity prices? Perhaps it is deflation. But, though inflation is very low, and even negative in a few countries, something more must be going on, because commodity prices are falling relative to the overall price level. In other words, real commodity prices are falling.

 

The most common explanation is the global economic slowdown, which has diminished demand for energy, minerals, and agricultural products. Indeed, growth has slowed and GDP forecasts have been revised downward since mid-year in most countries.

 

But the United States is a major exception. The American expansion seems increasingly well established, with estimated annual growth exceeding 4% over the last two quarters. And yet it is particularly in the US that commodity prices have been falling. The Economist’s euro-denominated Commodity Price Index, for example, has actually risen over the last year; it is only the Index in terms of dollars – which is what gets all of the attention – that is down.

 

That brings us to monetary policy, the importance of which as a determinant of commodity prices is often forgotten. Monetary tightening is widely anticipated in the US, with the Federal Reserve having ended quantitative easing in October and likely to raise short-term interest rates sometime in the coming year.

 

This recalls a familiar historical pattern. Falling real (inflation-adjusted) interest rates in the 1970s, 2002-2004, and 2007-2008 were accompanied by rising real commodity prices; sharp increases in US real interest rates in the 1980s sent dollar commodity prices tumbling.

 

There is something intuitive about the idea that when the Fed “prints money,” the money flows into commodities, among other places, and so bids their prices up – and thus that prices fall when interest rates rise. But, what, exactly, is the causal mechanism?

 

In fact, there are four channels through which the real interest rate affects real commodity prices (aside from whatever effect it has via the level of economic activity). First, high interest rates reduce the price of storable commodities by increasing the incentive for extraction today rather than tomorrow, thereby boosting the pace at which oil is pumped, gold is mined, or forests are logged. Second, high rates also decrease firms’ desire to carry inventories (think of oil held in tanks).

 

Third, portfolio managers respond to a rise in interest rates by shifting out of commodity contracts (which are now an “asset class”) and into treasury bills. Finally, high interest rates strengthen the domestic currency, thereby reducing the price of internationally traded commodities in domestic terms (even if the price has not fallen in foreign-currency terms).

 

US interest rates did not really rise in 2014, so most of these mechanisms are not yet directly at work. But speculators are thinking ahead and shifting out of commodities today in anticipation of future higher interest rates in 2015; the result has been to bring next year’s price increase forward to today.

The fourth of the channels, the exchange rate, has already been functioning. The prospect of US monetary tightening coincides with moves by the European Central Bank and the Bank of Japan toward enhanced monetary stimulus. The result has been an appreciation of the dollar against the euro and the yen. The euro is down 8% against the dollar since the first half of the year and the yen is down 14%. That explains how so many commodity prices can be down in terms of dollars and up in terms of other currencies.

 

Chart of the Day - Russian Ruble

Chart of the Day - Russian Ruble or Russian Roulette

The Russian Ruble has been amazingly volatile in the past 2 days but it has been especially so today. The magnitude of the intra-day move is just mind-boggling. The intra-day low was 52.2628 per US$ and high was 79.1688. That’s a massive 35.9% move from the bottom to the top in one single session. This huge swing in Ruble occurred on the backdrop of a 6.50% increase in Bank of Russia's Key Rate to 17%, which followed 1% increase just 2 business days ago, on Friday.

In the short-run, the currency volatility might push Russia to impose capital controls. Russia has already spent ~$80 billion defending the currency before it gave up on November 10. The central bank realized that it could not keep spending so much of depleting reserves on currency intervention especially when oil revenue, which accounted for over two-thirds of exports, is falling rapidly.

In the medium, the state of Russian economy and its currency will depend on oil price. The Russian government's initial break-even price for oil was $100, but it lowered that to $80 after the OPEC meeting. If oil price stays below $60, Russia's Economic Ministry says economy will contract by 3.5%-4.0%.

Foreigners who hold Russian debt will be directly impacted by collapsing Russian economy and falling currency. According to the Russian Central Bank, $135 billion debt is due over the coming year - banks alone have $50 billion due.

 

Domestically, Russian oligarchs are not the only ones suffering from the plummeting Ruble. Because of currency volatility, Apple halted online sale of its products in Russia.

 

It will be interesting to see how all this plays out not only within Russia but also in the bigger geo-political context.

Russian Ruble

Bank of Russia's Key Rate

Cramer's Game Plan for Week of December 15, 2014

Week in Review (Dec 8-12)

Week in Review (Dec 8-12)

Last week ended on a very high note. The big news was November payroll report on Friday, which showed a whopping 321K increase plus 44K upward revisions for September and October. While the unemployment rate did not budge and stayed at 5.8%, hourly earnings surged 0.4%. The S&P500 closed at an all-time high (2,075.37), so did the DJIA (17,958.79). On intra-day basis, the DJIA came within 10 points of psychologically important 18,000 level.

Monday started with a thud as data from Japan (Q3 GDP revised down to -1.9% from -1.6%), Germany (October IP was 0.2% vs. 0.4% expectation)  and China (November imports and exports missed consensus) disappointed investors.

 

On Tuesday, European markets plunged following a surprise announcement of Greek Presidential election while Chinese markets plummeted after the news that bonds rated below AAA or sold byissuers graded lower than AA can no longer be used as collateral for short-termloans obtained through repurchase agreements. US markets did fall sharply at the opened but recouped most of the gains by the end of the session, but yield on 10-year fell and closed at the lows of the session.  The Fed releasedCapital Surcharges for SIFIs for comments, which closes at the end of February, which was considered much stringent than expected, and that pressure JPMthe following day.

 

On Wednesday, the OPEC cuts its forecast for 2015demand by 70K b/d that put additional pressure on oil, which approached $60 level.

 

On Thursday, the ECB’s second allotment of targeted longer-termrefinancing operations took place today and delivered a disappointing result. The ECB allotted EUR 130 bn, somewhat short of the consensus forecast of EUR 148 bn. The Russian central bank raised its “key rate” by 100 bps to anew level of 10.5%. In the US November Retail sales was up 0.7% vs. 0.4%consensus and the gains were broad-based. The yield on 10 year rose but the increase was capped after a very strong auction for 30-year treasury. S&P500 also rolled over with the decline in treasury yield as well as more weakness in crude oil.

 

On Friday US markets fell as oil could not hold the critical $60 level and fell sharply. Again the Energy sector was the culprit as the IEA cut its forecast for global oil demand growth next year by 230,000 barrels per day to 900,000 barrels per day on the expectation of lower fuel consumption in Russia and other oil-exporting countries. The risk-off environment lifted treasuries; yield on 10-year fell 8bp to 2.09%.

Best & Worst Performers in the S&P500 During the Week 

FAQ - Gold

What is the chemistry of gold?

Gold is an element with the symbol Au and atomic number 79. Its symbol is Au is dervied from the greek word "Aurum", which means glow of sunshine. The English word gold comes from the words gulb and ghel referring also to the color. The melting point of gold 1,948°F (1,064°C) and its Boiling point is 5,173°F (2,856°C). The atomic mass of gold is 196.96657 ± 0.00004 u. The density of gold is 19.30 g cm-3.

 

Why is gold so special?

Sanat Kumar, the Chair of Chemical Engineering at Columbia University gives succinct arguments on a NPR interview why Gold is a so special. Basically he argues that gold like other precious metals rhodium, palladium, silver and platinum is "not a gas", "does not corrode or burst into flame upon contact with air", "is not toxic" and "rare but NOT too rare". But gold stands out among them at least for ancient humans because there are flaws with others; silver tarnishes, rhodium and palladium were not discovered until the eighteenth century, and platinum has a higher melting point - 3,215°F vs. 1,948°F for gold.

 

What is the annual gold demand?

According to the World Gold Council, gold demand in 2013 was 4,081 tons. Of that ~60% was absorbed by jewelers, ~20% investors (bars, coins and ETFs), ~10% each by Central Bankers and by Technology - dentistry absorbed ~1% of gold demand.

 

With respect to countries, China had the biggest demand in 2013 (1,065 tons) followed by India (975), US (190), Turkey (175), Germany (121) and Vietnam (92).

 

What is the annul supply of gold?

In 2013, 2,770 tons of gold were produced. China was the largest producer (420 tons) followed by Australia (255), US (227) and Russia (220).

 

The privately-owned gold miners are Barrick Gold, Newmonth Mining, AngloGold, Goldcorp, Kinross, Newcrest Mining, Gold Fields, Polyus Gold, Yamana and Eldorado.

 

What is the stock/inventory of gold?

The total amount of gold in the world by some estimates are between 155,000 tons and 171,000 tons.

 

Central Banks are the most visible holders of gold. The US is the largest official holder of gold (8,133 tons) followed by Germany (3,387), IMF (2,814), Italy (2,451), France (2,435) and China (1,054).

 

In the US, Federal Reserve Bank of New York holds the most gold, 530,000 gold bars or 6,700 tons.

What s the marginal cost of producing or cash cost curve of gold?
This is not readily available because this is proprietary data for gold producers. According to zerohedge.com, in 2013 marginal cost of production (at 90th percentile) was $1,104/oz while average cost was $673/oz.
 

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References

Academic Paper - Some Evidence on the Real Price of Gold, Its Costs of Production, and Commodity Prices
World Gold Council

World Gold Council - Gold Demand Trends: Full Year 2013

Gold Production Data
 

 

 

 

 

Cramer's Game Plan for Week of December 7, 2014

This Weekend's Cartoon

Source: The Economist

Bill Dudley's Speech at CUNY's Baruch College

Decision Time - Two Critical Thursdays of the Year

This Thursday (November 27), while Americans will be enjoying their Turkey dinners with their loved ones, the 12-member oil-sheiks dominated oil cartel, OPEC will meet in Vienna to decide on what to do with oil production. The current OPEC quote is 30 million barrels a day. Oil investors are counting on OPEC to cut production to bring it in-line with demand, and they will be disappointed if they do not cut the quota by at least 1 million barrels. Note that OPEC does not have explicit country quota, just total production ceiling - they did away with country quota in December 2011 meeting in Oran, Algeria. Even if they decide to cut production, how credible is that going to be. All depends on what Saudi Arabia, the Central Banker of oil industry promises to do. So far they have been sending mixed messages. It  will be an interesting Thanksgiving for US oil investors.

 

Next Thursday (December 4) the ECB will meet and decide on whether to embark on another round of QE. Investors are expecting Draghi to deliver on his promises. In the last post-ECB meeting press conference, Draghi suggested Eur1 trillion of asset purchase and he made that even more explicit at a recent speech in Frankfurt. This optimism is pushing the German 10-year to a record low (0.73%), and Spanish (1.97%) and Italian (2.16%) 10-years below the US (2.24%). But it is not a foregone conclusion that QE will happen given conflicting messages out of ECB Board members.

 

 

Today's Read

Rates Low Why? Demand Exceeds Supply By $400 Billion

Susanne Walker from Bloomberg tries to explain why bond yields globally are the record low levels. Supply exceeding demand, duh! According JP Morgan, next year, net issuance of bonds, not sure what kind but may be all kind of bonds, will be $2.4 trillion while demand will only be $2 trillion. According to them the ECB and BoJ alone with buy $400 billion and $700 billion of bonds next year, which is more than $1 trillion bought this year including by the Fed.

Singularity in Economics

Dr. Krugman argues that when the economy hits rock-bottom, “the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly.” Government spending doesn’t compete with private investment — it actually promotes business spending. This is akin to Singularity in physics, when all laws of physics break down. Kind of makes sense. If you go with that argument the whole debate about fiscal prudence i.e. in Japan, Germany and in the Republican circles becomes irrelevant because the classical relationship on which the argument is based on goes away.

 

Powerful People Behaving Badly

The Turkish President made a fool of himself with this asinine comments, "Men and Women are Not Equal"

We have another Wall Street "big swinging dick", the CEO of Delphi Financial Group, Robert Rosenkranz, behaving badly. He had an affair but that's not the bad part because who on Wall Street does not ;-), but the bad behavior is not paying his mistress as promised. Now the mistress is spilling beans.

This cartoon from The New Yorker magazine expresses the sentiment towards those Alpha Males.

 

Cramer's Game Plan for Week of November 23 2014

Earn $66K/Month By Teaching "How to Make iPhone Apps" Course Online

How this 25-year-old made $66,000 in a month by teaching an online course

Business Insider, 17-Nov-14

By Libby Kane

 

When the iPhone started taking over the US in 2008, Nick Walter was in Japan doing Mormon missionary work without a smartphone.

"When I got home, my dad was super nice and bought me an iPhone 4, and it was my first introduction to apps," the 25-year-old remembers. "I was like, 'These things are crazy! They can do anything!'"

 

Since that first introduction, Walter, who graduated from Brigham Young University with an information systems major (which includes elements of both computer science and business), learned to code and started doing freelance work building iPhone apps for local companies in Utah.

 

About four years later, Walter was reading "The 4-Hour Workweek" and was inspired by the idea of creating a business that wasn't super time intensive. Author Tim Ferriss recommended creating an online course, but Walter didn't know what he could possibly teach — until Apple announced its first new programming language in over a decade, called Swift.

 

"From the day they announced it, everyone was on an equal field trying to learn," Walter recalls. "I thought, 'Personally, I'd love to learn it just for fun and future stuff, but I have an opportunity to be one of the first people to teach it to other people. Maybe I could make a class where I'm learning as I teach.'"

 

Walter spent four days reading Apple's documentation of Swift, "kind of translating into English and giving some extra examples." Apple announced its release on June 2, and four days later Walter posted 50 videos, or one full course, to the online education site Udemy. It was an introduction to Swift for beginners, called Swift By Examples.

That first month, his course earned him $45,000.

 

Udemy charges students a set price — in this case, $99 — to access the online course as many times as they want. If these students find the course through a link sent by Walter, he gets 97% of the money. If they find the course through Udemy, he splits the money 50/50 with the company.

 

Not every month was quite so dramatic. Walter estimates that the following month, he earned $7,500, then $5,000 the month after that. His earnings evened out around $3,000 for a few months, until he put up his second course in September: How To Make iPhone Apps, for $199.

 

That month, he earned $66,000, a full year's salary for many people.

 

One might imagine a 25-year-old with that kind of windfall would head straight to Vegas. But Walter, who is a longtime fan of financial guru Dave Ramsey and highly recommends "The Total Money Makeover," did nothing of the sort. "I bought a 2010 Toyota Corolla," he says. "I got my full emergency fund set up, and I've just been investing the rest in mutual funds."

 

Today, more than 8,500 people have taken the original course on Swift, and more than 3,500 have gone through the iPhone class.

 

Next, Walter plans to publish a class on how to build apps for the Apple watch (he's now running a Kickstarter campaign to fund its creation) in which, he says, there's a lot of opportunity for someone who wants to create the kind of income stream that he has. 

 

"It reminds me of when apps first came out for the iPhone," he says. "I think there's a real opportunity for people to make apps for this new watch and be the first-comer there. Someone has to be the first weather app or the first jogging app. If you can move quickly enough, you're bound to have an awesome advantage."

 

Fed Paper Argues That Trend Economic Growth Falls After Recession

November 12, 2014

Potential Output and Recessions: Are We Fooling Ourselves?

Robert F. Martin, Teyanna Munyan, and Beth Anne Wilson 

The economic collapse in the wake of the global financial crises (GFC) and the weaker-than-expected recovery in many countries have led to questions about the impact of severe downturns on economic potential. Indeed, for several major economies, the level of output is nowhere near returning to pre-crisis trend (figure 1). Such developments have resulted in repeated downward revisions to estimates of potential output by private- and public-sector forecasters. In addition, this disappointment in post-recession growth has contributed to concerns that the U.S. economy, among others, is entering an era of secular stagnation. However, the historical experience of advanced economies around recessions indicates that the current experience is less unusual than one might think. First, output typically does not return to pre-crisis trend following recessions, especially deep ones. Second, in response, forecasters repeatedly revise down measures of trend.

Economic models usually assume that recession-induced gaps will close over time, typically via a period of above trend growth. In our results, growth is not faster after the recession than before, implying that the recession-induced gap is closed primarily by revising estimates of trend output growth lower. Interestingly, much of the downward revision to estimates of trend output happens well into the recovery. In particular, as economies recover and the lower level of actual output persists, potential output is gradually revised down toward actual GDP.

This pattern of revision also holds true if potential is calculated using a growth accounting framework, the method used by policymaking institutions such as the OECD. To see how estimates of potential using this methodology are adjusted around turning points, we use projections from the OECD's bi-annual economic outlook for 62 recessions from 1989 to 2009 in 23 advanced economies and construct a database of various vintages of the OECD's estimates of potential growth--i.e. forecasts made a year prior to the recession trough, at the trough, and three years after the trough. Figure 4 shows these vintages averaged around recession troughs. These data reveal a pattern of downward revisions to the level of potential around turning points. Even three years post-trough, potential growth is still being revised down. This same pattern of systematic underestimation of the impact of recessions on potential and the subsequent downward revision of potential output holds true for other policymaking institutions in the wake of the Great Recession. While it is tempting to attribute this to the impact of the financial crisis on growth, the discussion above suggests that this pattern is long standing. Ironically, despite being known as the dismal science, economists may be too optimistic about the recovery path of output following recessions.

Buy TBT (ProShares UltraShort 20+ Year Treasury ETF)

The yield on 10-year treasury and US economic data have moved in the opposite direction since April. Such discrepancy won't continue forever. One of them is wrong, and my hunch is that it is the 10-year treasury.

I’d be buyer of TBT (i.e. short 10-year treasury) at these levels. TBT is struggling to get past the $54 resistance level. If it does get through it, hopefully this week, there is clear path until $60. If I am wrong, I would put stop-loss at $52. Click here for more details.

Kids Explain "Futures Trading"

Mario Draghi - "To Do Or Not To Do"

At its monetary meeting, the ECB kept the Deposit Facility Rate unchanged at -0.2% and the more important Refinancing Rate at 0.05%. Both were in line with market expectations.

 

The bombshell for the market, especially the currency market, came during the post meeting press conference. There ECB President Mario Draghi said that he expects the central bank’s balance sheet to rise toward early 2012 levels. The size of the current balance sheet is around 2 trillion Euro and the peak in June 2012 was 3.1 trillion Euro suggesting 1 trillion Euro of asset purchase. If the ECB buys that in a year that'll be comparable to the rate the Fed bought Treasuries/MBS during QE3 ($85 billion a month).

 

Again nobody is sure if Mario Draghi can pull that off especially given well-know opposition from the German Bundesbank. No bigger authority than former Fed Chairman Ben Bernanke said so. The next ECB meeting is on December 4 and we'll see what happens then.

ECB President Mario Draghi's Press Conference (Transcript of the Press Conference)

 

Bid-Ask Spread Set to Widen 5x?

This is an interesting story because what the SEC decides to do will have implications on not only trading costs for individuals and institutions but also profitability of Wall Street brokers.

 

In a story yesterday, SEC Inches Closer to ‘Five-Cent Tick’ Test,  the WSJ reported that,

 

The Securities and Exchange Commission said late Monday it was releasing for public comment a highly-anticipated plan to determine whether trading the stocks of smaller companies in wider “tick sizes,” or the difference between what traders bid and offer for the shares, would boost interest in the stocks.

 

The 45-day comment period is a crucial step needed to get the test program off the ground and comes more than two months after U.S. stock exchanges and the Financial Industry Regulatory Authority, a Wall Street self-regulator, submitted the plan to the SEC.

 

The program is one of the first major stock-market initiatives launched by SEC Chairman Mary Jo White . It comes amid mounting concerns about the impact of computer-driven trading in the stock market.

 

Phasing out trading in penny increments has long been championed by some lawmakers, smaller investment banks and stock exchanges, who say trading in wider bands would make it easier and more profitable to trade shares of smaller companies, as well as lessen volatility.

 

That's a full circle from January 29 2001 when the New York Stock Exchange made history by converting all of its stocks to decimal pricing ending two centuries of pricing in fractions.

 

The decimalization of stock trading was supposed to have democratized the Wall Street and become the permanent way of doing business, but it did not. Apparently there were flaws and unintended consequences. 

(1) A paper released by Grant Thorton in 2009, Market Structure is Causing IPO Crisis, blamed the decimalization for taking away all the economic incentives for trading and researching on small cap companies thus hurting the IPO market. Basically, they were saying the brokers need to be  bribed, through wider bid-ask spread, to create market for small, under-followed companies.

(2) People argued that it encouraged HFT (high frequency trading) given the low cost of each trade. By 2010, it was estimated that HFT accounted for more than 70% of equity trades taking place in the US.

 

The SEC came up with its own study in July 2012. While it did not address the HFT issue, it concluded that "there is less available information related to how lower spreads may have negatively impacted capital formation, especially with respect to the complex, competitive dynamics and economic incentives of market intermediaries who provide liquidity."

 

Guess everything changed when Mary Jo White became the SEC Chairperson in April 2013. On June 24, 2013, the SEC unveiled a one-year "tick size" pilot program to let some stocks trade in five-cent increments instead of one-penny increments and the rest is history.

 

It will be interesting to see how all this moves forward.