Quotes of the day

Wall Street has always put its money where its interests and beliefs lie. But it is far less common that so many financial heavyweights would adopt a social cause like charter schools and advance it with a laserlike focus in the political realm. Hedge fund executives are thus emerging as perhaps the first significant political counterweight to the powerful teachers unions, which strongly oppose expanding charter schools in their current form.--Trip Gabriel and Jennifer Medina

If you appreciate the tuning so much, I hope you will enjoy the playing more.--Ravi Shankar

What is elementary, worldly wisdom? Well, the first rule is that you can't really know anything if you just remember isolated facts and try and bang 'em back. If the facts don't hang together on a latticework of theory, you don't have them in a usable form. You've got to have models in your head. And you've got to array your experience—both vicarious and direct—on this latticework of models. You may have noticed students who just try to remember and pound back what is remembered. Well, they fail in school and in life. You've got to hang experience on a latticework of models in your head.--Charlie Munger

The NASDAQ OMX Group (NASDAQ OMX: NDAQ) and NYSE Euronext (NYSE:NYX) are committed to working closely with each other, the Securities and Exchange Commission, other regulators and all market participants to determine the cause of Thursday’s market plunge and to develop effective solutions promoting greater market stability, efficiency and transparency.--NASDAQ OMX and NYSE Euronext

On Friday, several large United States exchanges said that although their trading platforms functioned properly on Thursday, they were nonetheless canceling many trades made during the market’s Big Bounce. Those cancellations applied only to company stocks that were affected directly by apparent malfunctions in computer systems that feed trades into the exchanges. Bets made on the periphery of the financial universe will stand. Investors who owned gold or United States Treasuries, for example, saw big gains as global investors sought havens. But even those gains were small compared with those won by options traders who had placed bets on an index that rises in value when volatility increases in American equity markets. “The guys who probably made the most money in this were options players,” said Larry Tabb, chief executive of the Tabb Group, a financial services consulting firm. Another group of likely winners in the eye-blink rout were investors who had placed “limit orders” on certain stocks. These are orders to buy shares at a fixed price that is often well below where the stock is currently trading. As the selling accelerated Thursday in the computer-driven frenzy, those orders were filled at prices that might have once seemed implausible.--Julie Creswell

Liquidity-PROVIDING algorithms took time outs. Liquidity-TAKERS employed market orders (not limit orders that specify the price for execution) that filled their orders without consideration of how bad the execution price was.--Cav

Hey honey, did you know that Jon Stewart’s brother is a big shot Wall Street executive?--Michael Corkery

The fundamental problem with innovation was that it made investors and executives forget the need to think for themselves. The cost of all these mad-scientist endeavors can be measured in the trillions of dollars that vaporized when the housing bubble burst. But another cost has been the damage done to the whole notion of financial innovation. “The real question is how do we keep the good parts of innovation without being stuck with the bad,” Rajan says. But even a potentially useful idea like the creation of a carbon-permit market to fight global warming is already being dismissed as Wall Street’s “next big scam.” And while the Yale economist Robert Shiller has long advocated using markets to help individuals protect themselves against things like declining house prices or future unemployment, the chances of that happening now seem smaller than ever. Someday, perhaps, we’ll be in the mood to experiment again. But that will happen only when Wall Street remembers that the phrase is “Innovate or die,” not “Innovate and die.”--James Suroweicki

Except for a few short-term opportunists who’ve taken quick profits amid the market chaos, it’s fair to say every man and his dog is short the euro. Europe’s common currency is, after all, facing the biggest crisis of its eleven-year-long life, one that is now stirring fears of a fresh liquidity crisis in the world’s banks. Given the paucity of good policy options for this crisis, where is the euro’s fair value over the medium to longer term? Not surprisingly, currency analysts are calling for a bottom that’s far beneath the euro’s current value of around $1.27. Where they differ is at what level the euro eventually stabilizes and on the speed with which it will get there. ... It’s Catch-22: The only way to contain a euro weakening crisis is to do something that weakens it further.--Michael Casey

If you blinked, you might have missed the ugly first-quarter report last week from Freddie Mac, the mortgage finance giant that, along with its sister Fannie Mae, soldiers on as one of the financial world’s biggest wards of the state. Freddie — already propped up with $52 billion in taxpayer funds used to rescue the company from its own mistakes — recorded a loss of $6.7 billion and said it would require an additional $10.6 billion from taxpayers to shore up its financial position. The news caused nary a ripple in the placid Washington scene. Perhaps that’s because many lawmakers, especially those who once assured us that Fannie and Freddie would never cost taxpayers a dime, hope that their constituents don’t notice the burgeoning money pit these mortgage monsters represent. Some $130 billion in federal money had already been larded on both companies before Freddie’s latest request.--Gretchen Morgenson

Fannie Mae, the mortgage-finance company operating under federal conservatorship, said it will seek $8.4 billion in aid from the U.S. Treasury Department after reporting its 11th-straight quarterly loss. The company said it had an $11.5 billion first-quarter loss in a filing today with the Securities and Exchange Commission. Washington-based Fannie Mae had posted $136.8 billion in losses over the previous 10 quarters and taken more than $75 billion in U.S. aid since April 2009. --Lorraine Woellert