Across the Curve

Tough Times at Tudor Hedge Fund

August 17th, 2016 5:29 am

Via Bloomberg:

Tudor this month hired Amit Tanna, a macro money manager, and quant trader Lykomidis Mastroleon, who has a PhD in electrical engineering, both from BlueCrest Capital Management, one of the people said. In June, Tudor hired Brad Davis, a money manager who focuses on financial stocks, from Balyasny Asset Management, and Jonathan Kommemi, a quant trader and former instructor at Princeton University, the person said.

Jones, 61, helped spawn a generation of macro traders who bet on everything from currencies to commodities. Like other firms, Tudor has struggled to outperform markets since the 2008 financial crisis. Its main fund lost 2.5 percent this year through Aug. 5, according to an investor.

No Standouts

A fund that is based on the performance of multiple teams of managers, Tudor Discretionary Macro, has lost 2.8 percent this year. That fund was started in 2012 to help with succession planning for Jones. It has yet to yield a standout manager.

Tudor isn’t the only macro hedge fund suffering. Last year, Brevan Howard Asset Management cut 50 jobs, mainly support roles, amid shrinking assets and losses. The reduction represented more than 10 percent of the 435 employees the firm employed as of June last year. The firm’s main fund fell 2.25 percent this year through July, extending two years of declines.

Some U.S. endowments and foundations are reducing their investments in hedge funds, following similar moves by retirement plans and insurance companies.

The average hedge fund posted a 1.2 percent gain this year through July, while macro funds rose less than 0.1 percent, according to data compiled by Bloomberg. The S&P 500 Index returned 7.7 percent in the period.

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Cisco To Layoff 20 Percent of Staff

August 17th, 2016 5:25 am

Via Bloomberg:

Jillian Ward
jillianfward
August 16, 2016 — 8:51 PM EDT
Updated on August 16, 2016 — 9:32 PM EDT

CEO Robbins is shifting to emphasize software as growth slows
Cuts could account for up to 20 percent of 73,000 employees

 

Cisco Systems Inc., the largest maker of networking equipment, will cut as many as 14,000 employees worldwide, or 20 percent of its workforce, CRN reported, citing people close to the company.

San Jose, California-based Cisco will announce the cuts in the next few weeks, CRN said on Tuesday, without naming its sources. Andrea Duffy, a spokeswoman for Cisco, declined to comment on the report.

 

Chief Executive Officer Chuck Robbins, who took over in July 2015, has been working to boost growth by shifting Cisco’s offerings toward software-based networking, security and management products, which customers increasingly prefer because they’re less expensive and more versatile. Cisco will report fiscal fourth-quarter earnings Wednesday after the close in New York. Analysts project a 2 percent decline in sales to $12.6 billion.

Cisco had about 73,100 employees as of April, according to data compiled by Bloomberg. The company last announced a large round of firings in August 2014, when it eliminated 6,000 positions.

The new emphasis on software is requiring staff with a different set of skills, CRN reported. Many early retirement plans have already been offered to employees, the website reported.

Cisco has shown its appetite for software with recent acquisitions, such as Jasper Technologies, which makes programs that let companies connect all manner of electronic devices.

Results released in May showed that Robbins is making headway in rejiggering Cisco’s businesses. The company projected sales growth of as much as 3 percent in the period that ended in July, compared with analysts’ projections for a revenue decline. Even so, Robbins said the company still has a long way to go and that earnings are not where they should be.

Cisco’s biggest division, switching, had third-quarter sales of $3.45 billion, a decline of 3 percent from a year earlier. Its second-largest division, routing, suffered a 5 percent drop in sales to $1.89 billion, the company said. Newer units including security, service-provider video and collaboration all posted sales increases of more than 10 percent.

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Scrapping Bonuses at Deutsche Bank

August 17th, 2016 5:18 am

Via Bloomberg:

Nicholas Comfort
nickcomfort
August 17, 2016 — 4:44 AM EDT

Lender scrapped 2015 management bonuses following annual loss
No dividend means bonuses should be up for debate, Sewing says

 

Deutsche Bank AG’s supervisory board should discuss scrapping management-board members’ bonuses for a second year after Germany’s largest lender put dividend payments on hold, consumer banking chief Christian Sewing told Bild-Zeitung.

“It’s clear that if we don’t pay our shareholders a dividend, then our own bonus needs to be up for debate as well,” Sewing, who sits on Deutsche Bank’s 10-member management board, told the German newspaper in the interview published on Wednesday. A spokeswoman for the Frankfurt-based lender wasn’t immediately available for comment.

Deutsche Bank Chief Executive Officer John Cryan has sold risky assets and eliminated thousands of jobs to bolster capital buffers and boost profitability, hurt by mounting legal costs and tougher regulation. The CEO scrapped bonus awards for top management and suspended dividends after the lender posted its first annual loss since 2008 last year.

While the company has lost about 44 percent of its market value this year, Cryan has signaled that there’s no immediate need to raise capital.
Bonus Payments

“The question of a capital increase isn’t an issue at the moment,” Sewing, 45, told Bild-Zeitung. “The share price is very low but our aim is to return the bank to profitability in the long term. That would also boost the share price.”

Because Deutsche Bank has cut assets, built up equity and liquidity since the financial crisis, “regulators don’t see any immediate need for us to raise our capital,” he said.

 

Sewing, who leads the private, wealth and commercial clients unit, stood to earn a 2.4 million-euro ($2.7 million) salary and as much as 5.9 million euros in bonuses for this year, the company said in March. While Cryan’s theoretical “maximum” compensation under the bank’s formula is 12.5 million euros, he can’t actually receive that amount, as pay for management board members was capped to 9.85 million euros for 2016.

The size of any bonuses depends on the company’s performance. Cryan has already said that Deutsche Bank may fail to return to profit this year as it takes charges to eliminate staff and builds provisions for fines and lawsuits.

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JPMorgan Duration Survey

August 16th, 2016 7:23 am

Via Bloomberg:

JPMorgan Treasury All-Client, Active Surveys Flip to Net Long
2016-08-16 11:20:27.301 GMT

By Stephen Spratt
(Bloomberg) — In week ended Aug. 15, all-client moves to
net long, shows least neutrals since Nov. 23 2015.

* Active client survey shows most net longs since June 20

* All clients (Aug. 15 vs Aug. 8)
* Long: 31 vs 16
* Neutral: 52 vs 68
* Short: 17 vs 16

* Active clients
* Long: 44 vs 10
* Neutral: 33 vs 60
* Short: 22 vs 30

* NOTE: Treasury All-Client Survey Turns Neutral, Actives
Unchanged: JPM

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More FX

August 16th, 2016 7:13 am

Via Marc Chandler at Brown Brothers Harriman:

Dollar Slumps, Driver Not So Obvious

• The US dollar is being sold across the board today
• RBA minutes were released overnight
• During the North American session, the US reports July CPI, IP, and housing starts/building permits
• India reported higher than expected WPI inflation; Colombia reports June retail sales and IP

The dollar is broadly weaker against the majors.  The yen and the Kiwi are outperforming while the Norwegian krone and the Loonie are underperforming.  EM currencies are broadly firmer.  KRW, MXN, and MYR are outperforming while PHP, IDR, and INR are underperforming.  MSCI Asia Pacific was flat, even with the Nikkei falling 1.6%.  MSCI EM is up 0.2%, continuing a string of nine straight up days, even with Chinese markets falling 0.5%.  Euro Stoxx 600 is down 0.2% near midday, while S&P futures are pointing to a lower open.  The 10-year UST yield is down 3 bp at 1.52%.  Commodity prices are mostly higher, with oil up 0.5%, copper up 1.2%, and gold up 1%.

The US dollar is being sold across the board today.  The US Dollar Index is off 0.65% late in the European morning, which, if sustained, would make it the largest drop in two weeks.

The proximate cause being cited by participants and the media is weak US data that is prompting a Fed re-think.  However, we are a bit skeptical.  It is not that the US data has been strong, or that Fed officials have been touting the need to hike like many regional Fed Presidents did earlier this year.  Rather our skepticism is based in the prices themselves.

Begin with the widely cited Bloomberg calculation of the odds interpolated by the Fed funds futures strip.  Presently, its calculations show an 18% chance that Fed funds will be at 50-75 bp at the end of September, 20.7% in November and 37.9% in December.  After the disappointing retail sales report at the end of last week, the probabilities were all lower at 16%, 17.5%, and 36.8% respectively.  Moreover, on August 1, Bloomberg calculated the probabilities at 18%, 19.4%, and 31.5% respectively.

This sampling does not suggest that the market’s expectations of Fed policy have changed much over the past fortnight, and to the extent they have changed, the odds are a little greater, not less.  The performance of the US two-year note also suggests that, if anything, the market has moved in the opposite direction of the narrative widely offered.  The two-year note is yielding 70 bp, the same as at the end of last week and two basis points higher than on August 1.

So if shifting views on Fed policy does not seem like the most likely explanation, is there a better one?  First, we note that the US dollar technical condition seems vulnerable to us (Dollar’s Downside Beckons in the Week Ahead).  Second, a fundamental case may be found with the $37.45 bln coupon payment that the US Treasury makes this month and the $54.56 bln in bond maturities.  That is $92 bln of capital looking for a home.  The new issuance of $62 bln in securities absorbs nearly two-thirds of it.  That still leaves $30 bln to be invested.  Due to the cost of hedging new US-dollar denominated investments, the hypothesis is that a chunk of this money is being repatriated or invested in other higher yielding bond markets, with Japan a key player.

The dollar has approached JPY100.  This is in important psychological area, though the Brexit low was almost JPY99.00.  The lowest close was on July 8 near JPY100.55.  The JPY100 level also may be a neckline to a possible head and shoulder pattern, which could be an unusual but not unprecedented continuation pattern rather than a more traditional reversal pattern.  The pattern is about JPY7.5, which translates into a measuring objective of near JPY92.50 if the neckline is successfully violated.

The euro is going for the ride.  It has reached the 50% retracement objective of the decline since May 3’s brief push above $1.16 at $1.1265.  The 61.8% retracement is found near $1.1350.  The German ZEW, the main eurozone data today, was mixed.  The assessment of current condition jumped to 57.6 from 49.8, well above expectations for 50.2.  However, the forward-looking expectations component showed considerably less improvement than expected.  The 0.5 reading is better than the -6.8 reported in July but poorer than the 2.0 expected.  

The heavy US dollar tone offers sterling some reprieve.  Yesterday, it finished the North American session at its lowest level in more than 30 years (~$1.2880).  Despite today’s recovery, it has been unable to resurface above previous support around $1.30.  The July inflation report had been cited as the first “hard data” since the referendum, but the impact of sterling’s sharp drop is barely detectable. Consumer prices slipped 0.1% on the month, while the year-over-year pace quickened to 0.6% from 0.5%.  The core rate eased to 1.3% from 1.4%.   That said, import prices did surge.  The 6.5% annualized pace is the most since the end of 2011.

To be sure, the Bank of England expects the decline in sterling to boost measured inflation.  However, it recognizes it as a transitory phenomenon.  Policymakers want to look through it.  The prospect of currency-induced price pressures (as opposed to, say, capacity constraints) has not and will not prevent the BOE from easing policy.  Sterling’s weakness and the decline in interest rates help cushion the economic shock for the UK.  

RBA minutes were released overnight.  At that meeting, the RBA cut rates 25 bp to 1.5%.  It noted “The risks associated with rising household sector leverage and rapid gains in housing prices had diminished.”  The RBA also noted “considerable uncertainty” regarding growth and inflation, which leaves the door open to further easing.  Next RBA meeting is September 6, no move is seen then since the RBA’s pace of easing this year has been modest (cuts in May and August).  The RBA noted that a stronger currency complicates the adjustment process, and so further AUD gains would make another cut in Q4 more likely.

During the North American session, the US reports July CPI, IP, and housing starts/building permits.  Consumer prices are expected to be flat in July for a 0.9% year-over-year increase (from 1.0% in June).  The core rate is expected to be steady at 2.3%.   If the median forecasts are in error, we suspect the risk is on the upside, perhaps due to medical service costs picked up in last week’s PPI report.  

Industrial and manufacturing output are expected to have increased, albeit at a slower pace than June.  Industrial output is expected to have risen 0.3% after 0.6% in June (though we suspect the risk here is on the upside perhaps due to utility output). Manufacturing production is expected to have risen by 0.3% after a 0.4% rise in June.  If this is accurate, it would be the first time since March-April 2015 that manufacturing output rose two consecutive months.   The Fed’s Lockhart speaks today.

Elsewhere, Canada reports June manufacturing sales.  Soft Canadian data recently has many in the market looking for more BOC easing.

India reported July WPI at 3.55% y/y vs. 2.84% expected and 1.62% in June.  July CPI was reported last week at a higher than expected 6.07% y/y, so there were upside risks to the WPI data.  Rising price pressures kept the RBI on hold this month, at Governor Rajan’s last meeting.  There is a risk that Modi chooses a dovish successor ahead of the next RBI policy meeting October 4.  However, if inflation remains above the RBI’s 2-6% target range, a rate cut will be hard to justify then.

Colombia reports June retail sales and IP.  The former is expected to rise 1.5% y/y, while the latter is expected to rise 4.5% y/y.  CPI rose a higher than expected 9% y/y in July, and so the bank may have to hike rates again at its next policy meeting August 31.  The real sector has remained firm despite past tightening, and so the bank may not be as concerned about choking off growth with another hike.

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Early FX

August 16th, 2016 7:05 am

Via Kit Juckes at SocGen:

<http://www.sgmarkets.com/r/?id=h1127971c,18030d10,18030d11&p1=136122&p2=da1e6d227e94d860b23993edab08f866>

Thin August markets, soggy US data, highs in equities and a continuation of the weak dollar trend. Overnight, the oil price rally and Asian equities have run out of steam but the dollar remains under pressure. The Empire State manufacturing index, yesterday’s only noteworthy economic release, fell to -4.21, its lowest level since February and consistent with a dip in the manufacturing ISM back to 50 or lower. ‘Consistent’ doesn’t mean that the ISM WILL be weak, but this is more encouragement for those who think the Fed’s not going to raise rates this year. As long as that camp has the upper hand, the dollar will likely remain under pressure and the underlying market bias will be to buy all and any dips in bonds, and higher-yielding currencies.

US data are doing nothing to encourage bond bears

[http://email.sgresearch.com/Content/PublicationPicture/230935/1]

The highest-profile casualty of the soggy dollar is the yen.USD/JPY is falling faster than justified in the very short term by the move in real yields, but that doesn’t matter in the middle of August. The BOJ is paying the price for being timid and unless the US data today come to their rescue, USD/JPY, dancing on the edge of a cliff at 100.20 right now, will slip over it.

USD/JPY – Cliff-dancing (like a lemming?)

[http://email.sgresearch.com/Content/PublicationPicture/230935/2]

And that’s a problem: US data this afternoon includes housing starts where we look for a below-consensus 2% fall to a 1.165mln rate, CPI, where we expect the core measure to dip to 2.2% from 2.3%, and industrial production, where we look for a modest 0.2% gain. None of this is going to stop the bond investor’s ‘ignore the yields and buy the dip’ bias. In FX-land, it’s just a recipe for a weaker dollar.

Who knows, maybe this will be the catalyst for a Sterling short-covering rally. The UK sees CPI/RPI/PPI data this morning (for what it’s worth, we look for CPI at 0.6% y/y, core at 1.4%, RPI at 1.7%, core output PPI at 0.8%). But the focus will be on the Bank of England’s APF operation, aiming to buy GBP 1.16bn of 15yr+ gilts, with results at 14:45 UK time. 20-year Gilt yields are almost 1% lower than they were on June 23 and a dozen basis points lower than they were a week ago, before the last bond-buying operation. Sterling has matched that collapse in yields. I’m going to be bearish of Gilts long before I stop being bearish of sterling, but for today, with so much focus on the reverse auction, the fate of yields and currencies is even more intertwined than usual. A successful operation and a correction in gilts, is the about the only way to temporarily reverse the pound’s fall.

We also get German ZEW data this morning, where we look for a dip in current conditions (48.4 from 49.8) and a bounce in expectations (9.6 vs -6.8) and overnight, we got RBA minutes that didn’t hurt the AUD. The RBA cut rates because 1) trading partners’ growth is a bit soft; 2) inflation is subduied; 3) the AUD lets them. But mostly because 4) domestic housing and debt pressures are easing so they can cut rates and at the margin that could help growth go a bit faster. Not much to feed AUD bears in that lot….

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Some Corporate Bond Stuff

August 16th, 2016 7:03 am

Via Bloomberg:

IG CREDIT: Spreads Tighten Further, Hit New Lows for 2016
2016-08-16 10:02:53.520 GMT

By Robert Elson
(Bloomberg) — Secondary IG trading ended with a Trace
count of $11.5b vs $10.3b Friday, $12.4b the previous Monday.
10-DMA $14.5b; 10-Monday moving avg $13b.

* 144a trading added $1.3b of IG volume vs $1.7b Friday, $1.5b
last Monday

* The most active issues:
* T 5.35% 2040 was 1st with client flows accounting for
100% of volume
* FIS 3.00% 2026 was next with client flows taking 75% of
volume
* MSFT 3.95% 2056 was 3rd with client and affiliate flows
taking 81% of volume; client selling twice buying
* KUNTA 1.25% 2018 was most active 144a issue with client
selling taking 100% of volume

* Bloomberg US IG Corporate Bond Index OAS at 144.8, a new low
for 2016, vs 146.0
* 2016 high/low: 220.8, a new wide since Jan. 2012/144.8
* 2015 high/low: 182.1/129.6
* 2014 high/low: 144.7/102.3

* BofAML IG Master Index at +144, a new low of 2016, vs +145
* 2016 high/low: +221, the widest level since June
2012/+144
* 2015 high/low: +180/+129
* 2014 high/low: +151/+106, tightest spread since July
2007

* Standard & Poor’s Global Fixed Income Research IG Index at
+192 vs +200
* +262, the new wide going back to 2013, was seen
2/11/2016
* The widest spread recorded was +578 in Dec. 2008

* S&P HY spread at +582 vs +587; +947 seen Feb. 11 was the
widest spread since Oct. 2011
* All-time wide was +1,754 in Dec. 2008

* Markit CDX.IG.26 5Y Index at 70.5 vs 71.7
* 2016 high/low 124.7/70
* 124.7, a new wide since June 2012 was seen 2/11/2016
* 2014 high/low was 76.1/55.0, the low for 2014 and the
lowest level since Oct 2007

* Current market levels vs early Monday, Friday:
* 2Y 0.702% vs 0.694% vs 0.730%
* 10Y 1.527% vs 1.498% vs 1.537%
* Dow futures -9 vs +31 vs +13
* Oil $46.06 vs $44.77 vs $43.50
* ¥en 100.09 vs 100.93 vs 102.06

* Monday’s U.S. IG BONDWRAP: Daily Volume Lowest Since Brexit
Vote
* August volume $98.29b; YTD Volume $1.12t

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Credit Pipeline

August 16th, 2016 6:59 am

Via Bloomberg:

IG CREDIT PIPELINE: 3 Set to Price; ETFC, CBT Added to List
2016-08-16 09:41:40.112 GMT

By Robert Elson
(Bloomberg) — Expected to price today:

* Nederlandse Waterschapsbank (NEDWBK) Aaa/AAA, to price at
least $250m 144a/Reg-S re-opened 1.50% April 2018, via
managers BNP/C/RBS; guidance MS +10 area
* Societe Generale (SOCGEN) Baa3/BBB, to price $bench
144a/Reg-S subordinated Tier 2 10Y, via BAML/MS/RBC/SG; IPT
+300 area
* Standard Chartered PLC (STANLN), to price 144a/Reg-S 3-part
deal, via BNP/CS/JPM/SCB
* Subordinated 10Y (A3/BBB-), IPT +320 area
* Senior unsecured 3Y (A1/BBB+), IPT +155 area
* Senior unsecured 3Y FRN, IPT equiv

LATEST UPDATES

* E*Trade Financial (ETFC) Ba3/BB-, mandates CS/GS/JPM/MS for
Perp/NC10 Pfd; investor calls end today
* Cabot Corp (CBT) Baa2/BBB, filed debt shelf; last priced a
new deal in 2012, has $300m maturing Oct. 1
* Israel Electric (ISRELE) Baa2/BBB-; said to hire C, JPM for
at least $500m bond sale in 4Q

MANDATES/MEETINGS

* Sumitomo Life (SUMILF) A3/BBB+; investor mtg July 19
* Woori Bank (WOORIB) A2/A-; mtgs July 11-20

M&A-RELATED

* Analog Devices (ADI) A3/BBB; ~$13.2b Linear Technology acq
* To raise nearly $7.3b debt for deal (July 26)
* Bayer (BAYNGR) A3/A-; said to review Monsanto (MON) A3/BBB+
accounts as bid weighed (Aug. 4)
* $63b financing said secured w/ $20b-$30b bonds seen
* Danone (BNFP) Baa1/BBB+; ~$12.1b WhiteWave (WWAV) Ba2/BB
* Co. Says deal 100% debt-financed, expects to keep IG
profile (July 7)
* Thermo Fisher (TMO) Baa3/BBB; ~$4.07b FEI acq
* $6.5b loans, including $2b bridge (July 4)
* Zimmer Biomet (ZBH) Baa3/BBB; ~$1b LDR acq
* Plans $750m issuance post-completion (June 7)
* Air Liquide (AIFP) A3/A-; ~$13.2b Airgas acq
* Plans to refi $12b loan backing acq via USD/EUR debt
(June 3)
* Great Plains Energy (GXP) Baa2/BBB+; ~$12.1b Westar acq
* $8b committed debt secured for deal (May 31)
* Abbott (ABT) A2/A+; ~$5.7b St. Jude buy, ~$3.1b Alere buy
* $17.2b bridge loan commitment (April 28)
* Sherwin-Williams (SHW) A2/A; ~$9.3b Valspar buy
* $8.3b debt financing expected (March 20)
* Shire (SHPLN) Baa3/BBB-; ~$35.5b Baxalta buy
* Closed $18b Baxalta acq loan (Feb 11)

SHELF FILINGS

* IBM (IBM) Aa3/AA-; automatic mixed shelf (July 26)
* Nike (NKE) A1/AA-; automatic debt shelf (July 21)
* Potash Corp (POT) A3/BBB+; debt shelf; last issued March
2015 (June 29)
* Tesla Motors (TSLA); automatic debt, common stk shelf (May
18)
* Debt may convert to common stk
* Reynolds American (RAI) Baa3/BBB filed automatic debt shelf;
sold $9b last June (May 13)
* Statoil (STLNO) Aa3/A+; debt shelf; last issued USD Nov.
2014 (May 9)
* Corporate Office (OFC) Baa3/BBB-; debt shelf (April 12)
* Rogers (RCICN) Baa1/BBB+; $4b debt shelf (March 4)

OTHER

* Visa (V) A1/A+; CFO says will issue $2b debt for buybacks by
yr end (July 21)
* Saudi Arabia (SAUDI); said to have hired 6 banks to lead
first intl bond sale (July 14)
* Investment Corp of Dubai (INVCOR); weighs bond sale (July 4)
* Alcoa (AA) Ba1/BBB-; upstream entity to borrow $1b (June 29)
* GE (GE) A3/AA-; may issue despite no deals this yr (June 1)
* Discovery Communications (DISCA) Baa3/BBB-; may revisit bond
market this yr, BI says (May 18)
* American Express (AXP) A3/BBB+; plans ~$3b-$7b term debt
issuance (April)

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Aging Baby Boomer Alert

August 15th, 2016 6:28 pm

My wife and I were on our way to Charlottesville Virginia a few weeks ago to visit our daughter who resides there. (As an aside, she is a professional ballet dancer and founded the Charlottesville Ballet in 2007. If you find any value in my occasional musings and in the analysis of street people who still send me stuff, you could show your gratitude with a tax deductible gift to the aforementioned ballet company. Link here.) Anyway, we stopped in Baltimore and visited Fort McHenry. The US defenders held steadfast at Fort Mchenry and held of His Majesty’s Navy and Army. If we had won that war Toronto would be a suburb of Rochester! I digress again. At the visitors center at the National Park at Fort McHenry they were playing Jimmy Hendrix’s version of the Anthem. That version was recorded at Woodstock some 47 years ago.

Via the New York Daily News:

The music world was never the same after the Woodstock festival in 1969.

The concert set the tone for the direction rock & roll was heading in the following decade, while also boosting several artists to legendary status.

On the 47th anniversary of the start of the Woodstock, here are 10 facts you didn’t know about the original music festival.

1. It didn’t actually take place in Woodstock

Despite being called Woodstock, the three-day festival actually took place in a different New York town.

Originally the concert was set to take place there, but concert organizers couldn’t find a good location to hold the event. They then tried to move it to the town of Wallkill, but permits were taken away a month before the show was set to take place.

Max Yasgur, a dairy farmer in Bethel, would offer up his land and become the festival’s setting.

2. No official Woodstock merchandise was sold

You can’t go to a concert in 2016 without running into tents of merchandise featuring band t-shirts, sweatshirts, flags, and basically anything you can fit a logo onto. However, at Woodstock in 1969 there was no official merchandise to be found.

The few souvenirs that people were able to take home with them from the show were programs and bootleg items that were sold by attendees.

3. 1970 “Woodstock” documentary won an Oscar

For those who didn’t get to experience the concert in person, a three-hour documentary was released in 1970 featuring performances from the festival. Legendary artists like The Who, Jimi Hendrix, Santana, Joe Cocker and Crosby, Stills & Nash were all shown in the film.

The film was given an Academy Award for Best Documentary Feature in 1970 and many still hail it as one of the best concert movies of all time.

A soon-to-be-famous director by the name of Martin Scorsese had a hand created the doc, working as an assistant director.

4. Two bands who were scheduled to play Woodstock never did

When the lineup for Woodstock first came out, the Jeff Beck Group and Iron Butterfly were expected to perform on Sunday of the three-day concert event. However, neither group ended up making an appearance at the iconic festival.

The Jeff Beck Group (made up of Jeff Beck, Rod Stewart, Ronnie Wood and Aynsley Dunbar) broke up weeks before the concert was supposed to take place. Iron Butterfly was actually enroute to the show, but they ended up getting stuck at LaGuardia Airport and couldn’t find transportation to get to the show.

The band reportedly had a list of demands including a helicopter ride to Woodstock and immediate payment upon their arrival, but it never happened and there was no “In a Gadda Da Vida” in upstate New York.

5. Richie Havens opened the festival but he wasn’t supposed to.

The show must go on, even if the openers don’t show up on time.

Richie Havens helped solve a Woodstock problem when he played his set earlier than he was supposed to because the opening acts were stuck in traffic getting to the concert. The singer played many encores and premiered a song called “Freedom,” which is now one of the most standout songs from the festival.

Havens had played every song he knew and was trying to figure out a way to fill up more time. He simply started strumming his guitar and made up the words to the song as he went. The performance would also increase his popularity as an artist.

6. Woodstock was free

Getting the biggest names in music together for a free three-day-concert event is unheard of nowadays. While certain festivals could end up costing more than a mortgage payment, Woodstock was actually free for the thousands who attended.

The festival was originally charging $6 a day or $18 for all three days in an advanced sale, but after larger than expected turnout, the show became free.

7. Rain delayed the show

Many concerts will go on rain or shine, but this wasn’t exactly the case in 1969. Woodstock was supposed to wrap up on Sunday, Aug. 17 but rain delays forced the show to run much longer that expected.

Joe Cocker took the stage at 2 p.m. that Sunday, but because of thunderstorms the next artist didn’t go on until 6:30 p.m. Due to the late start time, bands ended up performing through the night, including a Crosby, Stills, Nash & Young performance at 3 a.m. The concert would wrap up after 11 a.m. that Monday.

8. New York State Thruway never actually closed

Arlo Guthrie told the Woodstock crowd “the New York State Thruway is closed man,” but his claim wasn’t exactly true.

While New York State Police did end up closing off the Newburgh and Harriman exits to prevent even more people from going to the concert, the actual thruway remained open.

It just seemed like the highway was closed due to the overwhelming amount of traffic caused by the concert. The traffic jam extended over 17 miles and cars were delayed from New York to White Lake for over eight hours.

9. Jimi Hendrix closed the show

Jimi Hendrix, one of the greatest guitarists to ever strap up, was the one to close out the music festival.

Hendrix had to wait until 8:30 a.m. Monday morning to perform because of the rain delays. The crowd that was once over 400,000 was just 30,000 by the time he took the stage, but those who stuck around were rewarded with a stellar performance.

Hendrix played hits like “Purple Haze” and “Voodoo Child,” but it was his guitar solo rendition of “The Star Spangled Banner” that many remember the most.

10. No Round 2

Many were hoping the large scale concert event would happen again the following year in 1970. However, Yasgur refused to rent his farm out again.

Bethel was also done with hosting the concert. New laws were put into play that would prevent something like Woodstock from taking place in the town again.

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Resetting the Policy Paradigm at the Fed

August 15th, 2016 5:49 pm

Via Bloomberg:
Williams Calls for Rethink of Fed Orthodoxy in New Economic Era
Jeanna Smialek
jeannasmialek
August 15, 2016 — 1:00 PM EDT

 

Federal Reserve Bank of San Francisco President John Williams called for monetary and fiscal policy makers to rethink the way they operate, saying America is getting a taste of a new economic normal that warrants a change in orthodoxy.

Williams’ analysis centers on the idea that neutral interest rates — those that neither stoke nor slow the economy — are historically depressed and are poised to stay that way. To better adapt, he urged governments to prepare to provide a stronger fiscal backstop and central bankers to consider scrapping the practice of targeting low inflation.

“We can wait for the next storm and hope for better outcomes or prepare for them now and be ready,” Williams wrote in an essay published Monday by the San Francisco Fed. While he isn’t a voting member of the policy-setting Federal Open Market Committee this year, Williams is one of the foremost experts on the natural interest rate.

Williams, who was Fed Chair Janet Yellen’s top policy adviser when she was San Francisco Fed chief, joins a chorus of central bankers calling for stronger fiscal measures and a rethink as years of ultra-low interest rates and unconventional policies fail to stimulate breakout growth.

He’s also the second Fed policy maker in two months to suggest a major break with how the U.S. central bank conducts itself. The St. Louis Fed’s James Bullard on June 17 announced that he would stop submitting long-term economic forecasts and lowered his rate projection to one hike in 2016 and none during 2017 and 2018, based on his thinking that the economy is in a new, low-productivity and low-growth regime.

For a quick read on the Fed’s stalled interest-rate liftoff, click here.

Williams’s comments come ahead of next week’s symposium hosted by the Kansas City Fed in Jackson Hole, Wyoming, where top global central bankers and economic thinkers will gather to discuss how to design resilient monetary policy.
Less Room

For central banks, the long-standing mantra of targeting a low inflation rate is no longer appropriate in an era of low interest rates, Williams wrote. “There is simply not enough room for central banks to cut interest rates in response to an economic downturn when both natural rates and inflation are very low,” he said in the essay. The Fed adopted its 2 percent inflation target in January 2012.

Williams suggested either setting a higher inflation goal or replacing the practice with something else. Options include flexible price-level targeting or aiming for levels of nominal gross domestic product.

While Williams has previously said that policy makers should explore their alternatives for dealing with a low-rate world and has put forth the idea of a higher inflation target, his essay takes a more forceful tack, arguing that “we are seeing the future now” and “reviewing the key aspects of inflation targeting is certainly necessary.”

Williams was careful to note that he isn’t “advocating an abrupt reversal of course,” which could be disruptive. “But now is the time for experts and policy makers around the world to carefully investigate the pros and cons of these proposals.”

 

Shifting demographics, slower productivity and economic growth and the fact that emerging markets are seeking large reserves of safe assets have all lowered the natural interest rate, according to his analysis. That means conventional monetary policy has less room to stimulate the economy, Williams wrote, suggesting that the neutral rate may have fallen from 4 percent to 4.5 percent in the short term to a new normal of 3 percent to 3.5 percent, or even lower.

With less wiggle room, central banks will have to turn to other tools such as balance sheets, communications and “potentially even negative policy rates,” he wrote. Recessions will be deeper, recoveries slower and the risk of unacceptably low inflation will be higher.

On the fiscal side, Williams advocated creating a more robust framework to help stimulate the economy in case of a downturn, since monetary policy will be less powerful. He floated the idea of designing “stronger, more predictable, systematic adjustments of fiscal policy that support the economy during recessions and recoveries,” such as tying Social Security benefits or income tax rates to the national unemployment rate.

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