Kansas Mutual Fund Identified as Trader in Marke

The flash crash on May 6 that transfixed investors — and has been the source of finger-pointing ever since — may not have originated in the canyons of Wall Street or a hedge fund manager’s European lair. How about Kansas?Futures trades by Waddell & Reed, a conservative 70-year-old mutual fund based in Overland Park, Kan., have been linked to the plunge, during which the Dow dropped hundreds of points in a matter of minutes.The company was identified in a Chicago Mercantile Exchange document, according to Reuters.In a statement, Waddell & Reed said it was among the firms that traded the stock index comfort shoes ** futures contract suspected of being a crucial link in the cascade of events leading up to the plunge that began shortly after 2:30 p.m.“On May 6, as on many trading days, Waddell & Reed executed several trading strategies, including index futures contracts, as part of the normal operation of our flexible portfolio funds,” the firm said. “Like many market participants, Waddell & Reed was affected negatively by the market activity of May 6.”On Tuesday, Gary Gensler, the chairman of the Commodity Futures Trading Commission, said at a Congressional hearing that during the crucial time period, a single futures trader, which he would not identify, accounted for about 9 percent of trading volume in the most actively traded stock index derivative contract, known as the 500 e-mini futures contract.“One of these accounts was using the e-mini contract to hedge and only entered orders to sell,” Mr. Gensler testified. “That trader entered the market at around 2:32 and finished trading by around 2:51.”Reuters, in an article citing a document from the Chicago Mercantile Exchange, reported that regulators and market officials were focusing on the sale of 75,000 contracts of the 500 e-mini future by Waddell & Reed during the time period in question. The document said the trade “superficially appeared to be anomalous activity,” according to Reuters.The Chicago Mercantile Exchange declined to comment on Friday’s report about Waddell & Reed, as did the C.F.T.C., which regulates futures trading.While confirming trading activity that day, Waddell & Reed insisted it was not responsible for setting off the market break or doing anything out of the ordinary. Waddell & Reed said it was among 250 firms that traded the e-mini during the critical minutes.Founded in 1937, Waddell & Reed has $74 billion under management in a variety of funds, covering both stocks and fixed-income assets.Trades like the one identified by Waddell & Reed pick up during stock market downdrafts, as money managers try to offset the risk of holding stocks if the market goes lower, a process known as hedging.“Such trades often are executed in response to market activity, and are undertaken to protect fund comfort shoes ** investors from downside risk,” the firm said. “We use futures trading as part of this strategy, broadly known as hedging.”The 500 e-mini is a basket of stocks that can be used to bet on the future direction of the Standard & Poor’s 500-stock index.Like water draining into a narrower and narrower funnel, orders that couldn’t be completed on the New York Stock Exchange flooded electronic exchanges, where trading continued. What is still being analyzed is why hundreds of stocks briefly traded at levels more than 60 percent below their market value, some for pennies on the dollar.Many of those trades have since been canceled, but the incident has raised many questions about the stability and safety of what are now larger computer-controlled markets. Initial reports suggested that an erroneous order, a so-called fat-finger trade, prompted the sudden move, but that has been dismissed as unlikely by Mr. Gensler and other regulators.Without enough human oversight, computerized trading in today’s markets can easily overwhelm the current technology, said James Angel, a professor of finance at the McDonough School of Business at Georgetown University. In a February 2010 study commissioned by the Knight Capital Group, a major market maker, Mr. Angel warned of such a comfort shoes ** possibility.“The key thing when the dust settles will be the idea that this has elements of the 1987 crash, when computers and systems couldn’t keep up with volumes and failed,” he said. “It’s not about too many computers, but too few.”

Tensions Rise in Thailand Standoff

Thai authorities will deploy armored vehicles and shut roads surrounding thousands of defiant protesters on Thursday, forcing businesses to evacuate workers as tensions rise in the deadliest political crisis in two decades.The army said its armored vehicles will bolster checkpoints, stopping protesters from entering the area, and urged businesses on roads leading into the protesters' 3 sq-km (1.2 sq-mile) fortified encampment to close on Friday.More than 20,000 of the mostly rural and urban poor protesters refused to leave as their leaders mbt shoes ** challenged the government from behind medieval-like walls made from tires and wooden staves soaked in kerosene and topped by razor wire."We will send out groups to surround these vehicles to prevent them from advancing," Jatuporn Prompan, a protest leader, told supporters. "We believe the army will try to crack down this evening or tomorrow morning."Companies across the area told employees to leave work early and activated back-up plans. Several stations in an elevated train system were shutting early. Public transportation was being diverted from the area.Prime Minister Abhisit Vejjajiva is under enormous pressure to end the two-month crisis that has killed 29 people, wounded more than 1,000, paralyzed parts of Bangkok and slowed growth in Southeast Asia's second-biggest economy.The turmoil is shattering consumer confidence, a survey showed on Thursday, suggesting spending in shops and department stores is drying up as the crisis grinds on, a troubling sign for a sector that accounts for half the economy.The University of the Thai Chamber of Commerce said its consumer confidence index fell by a record 2.6 points in April, the lowest since July 2009. Confidence has fallen for three straight months after rising steadily since the middle of 2009.The Thai baht fell sharply immediately after the army's announcement, though witnesses saw no unusual activity around the sprawling red shirt encampment."Every bank is trying to get out of the baht now and we have not seen any central bank intervention to slow its fall," a Bangkok-based trader said. A second dealer said some of his clients closed business early on Thursday.The red-shirted protesters, mostly supporters of former premier Thaksin Shinawatra who was ousted in a 2006 coup, ignored a midnight deadline to disperse after authorities delayed plans to cut power and water to the area following an outcry from residents.IMMEDIATE CRACKDOWN UNLIKELYThe protesters say Abhisit lacks a popular mandate after coming to power in a controversial 传奇私服 ** parliamentary vote 17 months ago with support from the military.The prime minister on Wednesday canceled a proposed November 14 election under his "national reconciliation" plan and called off talks with the protesters, raising speculation of a crackdown.But he faced criticism for announcing he would cut supplies to the area and then reversing the threat hours later.Both sides appear to be running out of options, raising the risk of a violent confrontation and flummoxing investors in one of Asia's most promising emerging markets.An army source close to Army Chief Anupong Paochinda said an immediate crackdown is unlikely despite the threats."It's hard to say if or when the crackdown will be because we have to evaluate by the hour. We don't want casualties so we have to keep the pressure up so people are too tired to resist. But how and when, we have to evaluate constantly."Foreign investors have turned negative since violence flared in April and have sold $584 million in Thai shares in the past six sessions, cutting their net buying so far this year to $607.6 million as of Wednesday."The markets have no idea what to make of the situation. It seems like we're heading back to square one," said Sukit Udomsirikul, a senior analyst at brokerage Siam City Securities.Disparate views among protest leaders -- from radical former communists to academics and aspiring lawmakers -- make it difficult to reach consensus. Many face criminal charges for defying an emergency decree and some face terrorism charges carrying a maximum penalty of death.Several harbor political ambitions and need to appease rank-and-file supporters. Others fear 传奇私服 ** ending the protest now would be a one-way ticket to jail. Some hardliners advocate stepping up the protests to win the fight once and for all.The red-shirted protesters, have said they would only disperse if a deputy prime minister faces criminal charges over a deadly April clash between troops and protesters.

Specter, After Shift, Faces Fire From Both Sides

One year after leaving the Republican Party in the face of crumbling support, Senator Arlen Specter of Pennsylvania is now fighting to avert rejection — and presumably the end of his career — at the hands of Democrats. After seeming earlier this year to face an easy race for the Democratic nomination against Representative Joe Sestak, Mr. Specter is in what he acknowledges is an unexpectedly tough campaign, buffeted by a national anti-incumbent sentiment as well as resistance among Democrats wary of embracing a longtime Republican in next Tuesday’s primary.Mr. Specter began using a commercial here on Tuesday featuring video of President Obama praising him for his support of the stimulus bill last fall. “I love you and I love Arlen Specter,” Mr. Obama told a crowd at a rally.But Mr. Obama’s nomination of Elena Kagan to the United States Supreme Court has proved an unwelcome last-minute complication for Mr. Specter, as he has struggled to explain why he opposed Ms. Kagan’s nomination as solicitor general a year ago but is now open to considering her for the Supreme Court. (They are different jobs, he said.)The nomination has permitted Mr. Sestak to remind voters of Mr. Specter’s support of Republican nominees comfort shoes ** to the Supreme Court, as well as his contentious questioning of Anita Hill, the law professor who testified against one of those nominees, Clarence Thomas, in 1991. More generally, it has again left Mr. Specter open to criticism that he changes his principles to suit the political moment.And while the White House has backed Mr. Specter in the primary, making good on a pledge made when he switched parties just over a year ago, Mr. Obama seems unlikely to make a campaign visit for Mr. Specter before the primary, Democrats said. They said the White House is not eager to be embarrassed by having the president make a last-minute visit on behalf of a candidate who goes on to lose, as happened in the Massachusetts Senate and New Jersey governor’s races.At campaign stop after stop in the past few days, Mr. Specter, who is 80 and seeking a sixth term, denounced the Republican Party, saying it moved to the right and abandoned moderates, and suggested that he had always been a Democrat at heart.“I have been a John F. Kennedy Democrat,” he said here. “I returned to the party of my roots. What’s wrong with that? Look at what is happening to moderate Republicans around the country. You have Florida Governor Crist getting kicked out of the Republican Party.” He referred to Gov. Charlie Crist, who decided to run for Senate as an independent.Still, he has clearly been staggered this week by an advertisement released by Mr. Sestak showing former President George W. Bush praising Mr. Specter as a “firm ally.” That is precisely the kind of advertisement Democrats are planning to use against Republicans this fall. Democrats and some of Mr. Specter’s supporters said the advertisement, which also shows the senator appearing alongside Sarah Palin and a clip of Mr. Specter arching an eyebrow as he declared, “My change in party will enable me to be re-elected,” was crystallizing concerns about him among both Democratic partisans and voters weary with Washington. “It’s been a rugged time, candidly,” Mr. Specter said.The most likely Republican candidate, Pat Toomey, a former member of Congress and former head of the Club for Growth, a conservative organization, helped drive Mr. Specter from the Republican Party. But some of Mr. Specter’s supporters say that Mr. Specter would be a much stronger candidate than Mr. Sestak, a retired Navy admiral, against Mr. Toomey in the fall.“I am firmly of the belief that Arlen Specter is head and shoulders above anyone else in his ability to lead us to victory this November,” T. J. Rooney, the head of the Pennsylvania Democratic Party, said Tuesday. “Arlen Specter knows how to beat Toomey: he has done it before.”Mr. Rooney pointed to Mr. Sestak’s unconventional campaign manner — “He doesn’t have a campaign manager!” he said — and said that Mr. Specter is a tougher campaigner who could appeal to independent voters and moderate Republicans, who he said would be lost to Mr. Toomey if Mr. Sestak won.Mr. Rooney also suggested that Mr. Sestak would be hurt in a general election campaign by an issue raised in advertising and on the campaign trail by Mr. Specter: the circumstances of Mr. Sestak’s retirement from the Navy.A report at the time said Mr. Sestak had created “a poor command climate.” Mr. Sestak said he was simply carrying out a tough assignment, assessing the Navy’s fleet to recommend cutbacks, and he has refused Mr. Specter’s demands that he release his records.But after some initial difficulties, Mr. Sestak — who was recruited into politics by Rahm Emanuel, the White House chief of staff, when Mr. Emanuel served as the head of the Democratic Congressional Campaign Committee — has become an increasingly nimble candidate, appealing at once to independents weary of Washington and Democrats wary of Mr. Specter.“I very much appreciate the service of Arlen Specter,” he said the other day. “It’s time to move forward, comfortable shoes ** to someone who didn’t stand next to George Bush.”That has led some analysts to raise their assessment of Mr. Sestak’s potential as a candidate against Mr. Toomey.“Now it looks like either candidate would do just as well against Toomey,” said G. Terry Madonna, director of the Center for Politics and Public Affairs at Franklin and Marshall College. “Now voters have a better sense of Sestak — remember, all these commercials are being viewed not just by Democrats but by everybody — and it’s making him much more competitive with Toomey.”That could also be a problem for Mr. Specter, who has presented himself as the strongest Democratic candidate for the fall.“I’m a Democrat, so having someone who can beat the Republicans is very important to me,” said Philip Needelman, 71, a retired systems analyst who is undecided in the race. “In the beginning I thought that Specter was the stronger candidate. But Sestak is moving up very quickly.”On the face of it, Mr. Specter should be the dominant candidate in this race. He has the support of Mr. Obama, and this is the only Democratic primary where the Democratic Senatorial Campaign Committee is pouring in money on behalf of an incumbent. He has the support of most of the state’s political leadership, including Gov. Edward G. Rendell, and labor unions, critical to any get-out-the-vote effort here.But Mr. Specter has been firmly identified as a Washington politician at a time when such an identification has proved toxic to other incumbents in competitive primaries. And he is viewed with suspicion by Democrats, given his political history. It is difficult enough to be an incumbent these days, but it is particularly tough to be an incumbent without a loyal party base.Mr. Sestak said he was not worried about Mr. Obama’s helping Mr. Specter with that base, 传奇私服 ** saying he understood why the president was doing it.“Well, they made a commitment, I understand that,” he said. “At the end of the day, this isn’t going to be won from the top. People aren’t going to listen to Washington, D.C., or Harrisburg, Pa.”