In the spirit of the Olympic Games in London, I'd like to say, “Take a dive!” Because it seems to be what the IB industry has generally been doing in 2012 given the latest news coming from WS firms. Early in the earnings season I’ve hearing about revenue guidance coming in weak from Bob Pisani but now it seems to have manifested itself in some key WS players. The following is a sanpshot on some of the latest second quarter earnings from WS, to see who’s been affected and how...

This one kinda came as a surprise to me, as I believe the move would be unprecedented if it happens. Sure, companies switch listing exchanges all the time, but never less than a week out from their IPO.

Reports are circulating that Facebook (read:Zuckerberg) is considering de-listing on the NASDAQ and re-listing on the NYSE in the wake of Friday's janky opening and the resulting investor lawsuits. I'm sure the good folks over at the NYSE wasted no time in contacting the company to point out what a crappy job their cross-town rival did and how much smoother things would've gone on the Big Board.

Now that we are three business days into the Facebook IPO, there are more problems than anyone could have forseen. Facebook, Morgan Stanley, and Nasdaq have all had major issues during the IPO process and are now being scrutinized in the media as well as the political scene. Let us look at the biggest problems.

Morgan Stanley
Monday afternoon news came out that the MS research department amended earnings estimates for Facebook and that the information was disseminated only to institutional clients, leaving the retail investors in the dark during the road show prior to the IPO. Although this is not currently a legal violation, it is certainly an ethical one. Any update to an outlook on an entity by a banking institution should be disseminated to all clients simultaneously so that everyone has an opportunity to process the information and trade accordingly.

In an uncharacteristically strong October for stocks, the NASDAQ and the S&P hit a "Golden Cross" last week, where the indexes' 50-day moving averages surpassed their 200-day moving averages - a very bullish signal. The Dow achieved its own Golden Cross on October 1.

Before you rush out and buy a bunch of stock, however, be aware that the signals aren't always right. Back in July we saw the dreaded "Death Cross" (the opposite of a Golden Cross), and the markets have risen 15% since then. That said, I think the coming Fed action is going to drive stocks higher, as long as it doesn't precipitate the violent civil war that some are predicting.

Ask any of the older guys at your firm about chop and you're guaranteed to get a chuckle. Chop goes by many other names on the Street (inside, rip, tear, gash, juice, grease, and others too numerous to list) and it is simply excess commission charged to a customer without that customer's knowledge or consent. Get a few drinks in a guy who's been around awhile, and you're sure to hear tales of massive chop in the old days.

Like most things, though, chop got out of hand and caught the attention of the regulators. By the late 90's, firms once satisfied to make an extra eighth or quarter on the spread began pulling out all the stops and selling Rule 144 and Reg S stock to the public and making dollars per share on the sly instead of pennies. The mob, always on the periphery of the markets, saw the opportunity and opened or took over numerous chophouses. Gary Weiss covered the whole tawdry mess in his excellent book Born To Steal and Jordan Belfort (former CEO of Stratton Oakmont) gave a first-hand account in The Wolf of Wall Street, if you can get through it.