Wall Street Journal: "
Wall Street Moves to Texas - Financial firms want competition for the NYSE and Nasdaq." - "
New York politicians, watch out. A new stock exchange based in Texas could soon challenge Nasdaq and the New York Stock Exchange—and the Empire State’s status as America’s financial capital."
Population, business, and now finance seems to be gravitating towards the red states.
1 comment:
Speaking of Texas...
https://www.economist.com/finance-and-economics/2024/05/16/joe-biden-master-oil-trader
The Economist:
Joe Biden, master oil trader
The president has turned volatility into profit
Joe Biden seems to have a knack for the oil trade. Two years ago his administration initiated the largest ever sell-off from America’s Strategic Petroleum Reserve, an emergency store of crude oil, to counteract price surges caused by Russia’s war in Ukraine. Back then, dwindling stocks left observers twitchy. What if there was another shock to the system? So far, however, Mr Biden has got away with the gamble. He is now refilling America’s tanks, and began a new round of bidding on May 7th. Although inflation and war have marked his presidency, domestic fuel prices have been relatively stable and American production high.
Like all good traders, Mr Biden has turned volatility into profit. In 2022, when he released 180m barrels of crude — or one-third of America’s stockpile — he sold at an average of $95 a barrel. In July last year, when the West Texas Intermediate benchmark was at $67 a barrel, he began to refill the reserve. The president has replaced about one-fifth of what he sold, posting a profit of $582m, and has managed to time the market to perfection.
Treasury officials estimate that Mr Biden’s early sales knocked about $0.40 from the price of a gallon of petrol. That was a relief for consumers (and probably boosted his party’s performance in midterm elections).
Next he rewrote rules to allow the government to offer producers forward contracts at fixed prices. Producers give up the chance of more money if prices rise by the time of delivery, but know they will make no less than the contract guarantees. Since October Mr Biden has offered a rolling option to enter into forward contracts at a strike price of $79, for up to 3m barrels a month. This is a drop in the barrel in a global market that clears 100m of them a day. But the standing offer to buy at such a price may have encouraged domestic producers to keep drilling.
Indeed, planned investment more than tripled in the months after the announcement of forward contracts, even though prices were falling at the time.
Oil traders might resent Mr Biden’s foray into their line of work, since they rely on volatile prices to turn a buck. His tactics will also be hard for them to replicate. The federal government is a credible customer with a long horizon. The SPR’s caverns have capacity for 714m barrels and make oil cheap to store. Even after the drawdown in 2022, America’s reserves comfortably exceeded the standard 90 days of import cover. Mr Biden is in no hurry to refill the reserves, and can wait until prices fall to his floor.
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