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Playbook: Opening day edition; Michael Lewis v. Wall Street; Chappelle at …

Welcome to Capital Playbook! Sign up for our newsletters here.

By Jimmy Vielkind in Albany and Azi Paybarah in New York, with Mike Allen in Washington

BACK TO BASEBALL: Mets face Nats at Citi Field at 1:10 p.m. Yankees play Astros home opener tomorrow at 7:10 p.m. Yankees home opener is next Monday vs. Orioles, 1:05 p.m. Mets season preview

SNEAK PEEK – Out today! “Moneyball” author Michael Lewis takes on the phenomenon of high-frequency trading (making money by cutting milliseconds off transmission time to a stock exchange) in “Flash Boys: A Wall Street Revolt” (W.W. Norton): “[T]his book started when I first heard the story of Sergey Aleynikov, the Russian computer programmer who had worked for Goldman Sachs and then, in the summer of 2009, after he’d quit his job, was arrested by the FBI and charged … with stealing Goldman Sach’s computer code. … He was usually described as a ‘high-frequency trading programmer’ … That was a term of art that, in the summer of 2009, most people, even on Wall Street, had never before heard. … Why was the code … so important that … Goldman Sachs needed to call the FBI? …


  • CAPITAL PLAYBOOK – BUDGET DEAL EXTRA – CUOMO, MAYOR BOTH CLAIM PRE-K WINS — TAXES TO GO DOWN – BOOST FOR CHARTERS – NYT: ‘de Blasio’s control of city schools was unmistakably questioned’
  • Playbook: Albany’s ‘Kumbaya press conference;’ Neiman close to Hudson Yards deal
  • Playbook: Citi Bike manager out; Corrections chief grilling


“Over the past decade, the financial markets have changed too rapidly for our mental picture of them to remain true to life. … The U.S. stock market now trades inside black boxes, in heavily guarded buildings in New Jersey and Chicago. … [T]he ticker tape that runs across the bottom of cable TV screens captures only the tiniest fraction of what occurs in the stock markets. … This book is an attempt to draw [a picture of what has replaced the trading pits] … of post-crisis Wall Street; of new kinds of financial cleverness …

“The financial markets were changing in ways even professionals did not fully understand. Their new ability to move at computer, rather than human, speed had given rise to a new class of Wall Street traders … getting very rich very quickly without having to explain who they were or how they were making their money. … Some of them … ‘would sell their grandmothers for a microsecond.’ (A microsecond is one millionth of a second.)” Amazon: $17.46 hardcover

–LEWIS, on a “60 Minutes” segment last night called “Rigged”: High-frequency traders are “able to identify your desire to buy shares in Microsoft and buy them in front of you and sell them back to you at a higher price. … The … speed advantage that the faster traders have is milliseconds … But it’s enough for them to identify what you’re gonna do and do it before you do it at your expense.” Video, script

–REALITY CHECK from Ben White in Politico’s “Morning Money”: “Some high-frequency traders may front-run ordinary investors and skim off pennies (or fractions of pennies) per order that taken in aggregate can make them tens of millions of dollars. Such alleged schemes are the subject of ongoing investigations and the focus on new market initiatives … But to extrapolate from that to the entire equity market being ‘rigged’ … just isn’t the case.

“It’s not like the shares in everyone’s 401(k) accounts are somehow phony or that average folks can’t do well investing in stocks. It means that a byzantine and fractured marketplace can (and often does) offer unfair advantages to those smart enough to find them. And that hurts the rest of us who may pay a tiny bit more for our stocks as a result. It shouldn’t be allowed to happen. But a totally rigged stock market? No way.”

–THE INDUSTRY has already begun a sophisticated pushback – Peter Nabicht of the Modern Markets Initiative (@ModernMarkets), which advocates for high-frequency traders: “‘Flash Boys’ will be part of the ongoing debate about the next evolution of market structure. … ‘60 Minutes’ … only presented one view of a very important issue and promoted sweeping, inaccurate generalizations … Professional traders use technology when competing with each other to give investors the low cost liquidity and fair prices that they need.”

BRATTON IS THE WOOD ON BOTH TABS, from interview with WABC’s Sunday show, “Up Close with Diana Williams”: Post, “NYP’D OFF! Bratton slams embarrassing WTC security” … News, “SLAP FRISK: Bratton rips Kelly and Bloomberg – Says their policy caused ‘awful’ NYPD morale.”

AFTER ALBANY, DE BLASIO TAKES ON HOUSING — AP’s Jonathan Lemire: “[A]dvisers to de Blasio believe that the skirmishes will be forgotten once pre-K starts in the fall and that voters will be happy with the program and will have forgotten about the failed tax by the time he faces re-election in 2017. Moreover, the mayor’s allies believe he has a growing sense of momentum on the heels of other successes … Next up is de Blasio’s attempt to push back on the soaring rents that are increasingly making New York City out of reach to all but the very wealthy. His goal … is to build or preserve 200,000 affordable units of housing over the next 10 years for lower-income New Yorkers, a staggering number that would house a population bigger than cities such as Atlanta or Minneapolis.”

QUOTE OF THE DAY: “I would not accept this as a complete investigation.”–Rudy Giuliani on Randy Mastro’s GWB report.

“GMA” JOSH BOLTS FOR NBC – ABC News President Ben Sherwood emails the news division: “[W]e have promoted Amy Robach to News Anchor on ‘Good Morning America’ effective immediately. … Amy has become a familiar face on GMA, filling in for Robin Roberts for many of the 174 days that Robin spent recovering from her bone marrow transplant. … Amy began her career as a general assignment reporter in South Carolina and moved on to become a morning anchor in Washington …

“Josh Elliott let us know [Sunday] that he is going to NBC Sports. As many of you know, we have been negotiating with Josh these past several months. In good faith, we worked hard to close a significant gap between our generous offer and his expectations. In the end, Josh felt he deserved a different deal and so he chose a new path. … With Robin, George, Lara, Ginger and Amy, GMA’s best days are ahead.”


CUOMO’S BUDGET POLITICS — JIMMY’S TAKE: The state budget set to be approved today will provide property tax rebate checks to homeowners outside of New York City and relief for renters, based on their income, in the five boroughs. It will include funding for pre-kindergarten programs around the state, and increase school aid. It will do hundreds of other things, too, but the savviest of politicians know that voters won’t notice much more than that. And it will accomplish two key tasks for the governor: it will provide another answer to the question of whether Cuomo has done enough to stem tax growth during his four years in office, and simultaneously provide protection against arguments from the left.

– Capital’s Albany bureau broke down what the $137.9 billion budget means for health, energy, school aid, and campaign finance enforcement.

CUOMO TAKES JPM MONEY—Daily News’ Ken Lovett: Attorney General Eric Schneiderman could wind up one of the biggest losers in the new state budget deal. Tucked away in the budget bills is a provision that strips Schneiderman of his control of the remaining $440 million the state will get in a national housing settlement with JP Morgan Chase. Instead, the money will be put in a new fund and controlled jointly by Gov. Cuomo and legislative leaders. The bills say the money must be spent on multiple housing issues, including anti-blight projects, foreclosure assistance hotlines and counseling and mediation programs.

AZI’S TAKE: De Blasio’s first budget in Albany shows a willingness to sacrifice the daily budget disputes in order to keep his agenda in the spotlight, and to give Cuomo a certain space to claim victory. The mayor’s polite comments about the governor belie a far more complicated, and tense relationship between the two men who represent vastly different wings of the party. Aides to de Blasio say the new mayor understands quite well that the city’s fate is, largely, dictated by the powers in Albany, and it’s their job to find ways to influence them.

BUDGET REAX – Times editorial, “New York’s Unfinished Budget”: “State lawmakers … are poised to adopt a $138 billion budget that would offer support for New York City schools but little hope of reforming the corrupt culture in Albany. There are enough flaws in this deal that legislators and Gov. Andrew Cuomo should take the time to get it right. …The budget agreement … threatens to chip away at the mayor’s ability to control city schools. Having the mayor fully in charge of public education in the city has mostly worked over the last dozen years. This is no time to start diluting that authority and responsibility over the largest system in the country.

“A conspicuous failure in this budget package is its minimal concern about arrests, investigations, convictions and other political scandals in Albany.”

–THE CAMPAIGN FINANCE SHIELD—Salon’s Blake Zeff, for Capital: Some good-government critics say the fact that the governor has raised $33 million for his re-election proves he’s an enemy of ridding the system of political money, but this is unfair. Until the law is passed, he shouldn’t be expected to stop playing by the rules governing his campaign. A far more salient piece of evidence to support the claim that the governor doesn’t want public financing is simply his record. His play on the issue is simple. Make a show of pushing really hard to get it done, and simultaneously ensure the thing dies – whether by pushing it too late or weakly (or just pinning its failure on Dean Skelos). But this year, he came up with something particularly clever, even by Cuomo standards.

–Times A15, “Political Memo: De Blasio Betting On Pre-K To Succeed,” by Michael M. Grynbaum and Thomas Kaplan: “de Blasio stumbled away from the first state budget battle of his administration with his mandate bruised and his political momentum stymied, but clutching a hard-fought prize: money, and a lot of it, for his signature plan to offer free prekindergarten classes in New York City. … [T]he administration is devoting vast resources to build up the program and is hiring numerous officials dedicated to its implementation.”

–“Green groups cheer NY budget environment spending” – AP/Albany: “Conservation groups are glad to see the state’s Environmental Protection Fund increased under the $140 billion budget agreement … But Peter Iwanowicz of Environmental Advocates says lawmakers missed opportunities by again delaying the Diesel Emissions Reduction Act of 2006 and not fixing the state’s brownfields cleanup program. The spending plan expected to be approved on Monday includes $162 million for the Environmental Protection Fund, a $9 million increase over the current level. The fund once stood at $255 million.The fund is used for clean water projects, parks, open space land purchases and other environmental programs.”


–”35 schoolkids have committed suicide in last three years,” by Post’s Michael Gartland: It’s “an unpublicized trend that Chancellor Carmen Fariña only hinted at last week when she told principals in a private meeting that 10 children had taken their lives during her first seven weeks on the job. The 2011-12 school year saw nine suicides, with 14 in 2012-13. So far this year, with a third of the term left, there have been a dozen … The number of social workers, guidance counselors and psychologists assigned to public schools has fallen 7 percent since 2008, going from 5,676 to about 5,300, according to DOE data.”

–Times A1, “9/11 Memorial Museum Faces Its Latest Hurdle: Its Opening,” by Patricia Cohen: “[T]he museum’s rollout was organized by a small group of museum staff members who quietly worked to satisfy competing demands while staying true to the museum’s mission. … The unveiling will begin on May 15 — a week before the museum opens to the public — with a dedication, at bedrock, seven stories below ground, in front of an exposed slab of the World Trade Center’s original slurry wall, a hallmark of the underground museum. The bedrock observance means there is room for only between 550 and 750 seats, with many set aside for invited officials.”

“Metropolitan Museum sells off millions,” by Post’s Isabel Vincent and Melissa Klein: “The museum sold off 3,290 objects worth a total of $5.4 million last year, generating the highest revenue in eight years. The selling spree continues with at least $3 million worth of paintings auctioned off this year … Gone in the house cleaning are Old Masters and Renaissance works donated by benefactors including former Met president George Blumenthal.”

EAT BEAT — “Eataly-Style Mexican Marketplace and Restaurant to Open in Flatiron,” by DNAInfo’s Heather Holland: “Cafe El Presidente, a two-story Mexican marketplace and restaurant, is opening in Flatiron with a taqueria, breakfast cafe, juice bar and artisanal tortilla station, plus a selection of gourmet ingredients imported from Mexico.”

DAVE CHAPPELLE IN NYC — LaughSpin’s Dave Gadino: “Dave Chappelle’s ongoing comeback will take form of a performance at Radio City Music Hall in New York on June 19. And if we were to guess and if recent history has anything to do with it, the Radio City Music Hall show will sell out almost immediately and at least one date will be added. … A quick look at the venue’s official site shows the next scheduled event at the New York City landmark is on June 28 so there’s plenty cushion for more Chappelle in the Big Apple.

–In July of last year, Chappelle was scheduled to perform one show at Montreal’s Just For Laughs comedy festival. Since tickets were sold out in mere minutes, nine additional Chappelle shows were added; the veteran performer sold them all out. … Tickets for Dave Chappelle’s Radio City Music Hall show go on sale April 4, but if you’re an American Express cardholder you can purchase tickets on April 1 during a special pre-sale.”

WEEKEND WEDDING — Amber Sutherland, Thomas Namako Jr. – NYT: “Amber Rose Sutherland and Thomas Joseph Namako Jr. [were] married Sunday at Rebar, an event space in Brooklyn. …The bride, 30, is a general assignment reporter for The New York Post. She graduated from the New School … The groom, 31, is an assistant news editor in Manhattan for The Wall Street Journal. He graduated from La Salle University and received a master’s degree in journalism from Columbia.”

THE HOME TEAMS — Capital’s Howard Megdal — Nets 114, Timberwolves 99: No one has a longer home winning streak in the NBA this season than the Nets, who are at 13 and counting.

Knicks 89, Warriors 84: The Nets didn’t clinch a playoff spot just yet, though, when Steph Curry gave up a game-tying shot in the dying seconds. The Knicks are now only a game back of the Hawks for the eighth and final playoff spot, incredibly.

COFFEE BREAK “In Postcards, Remembering 10 NYC Hotels That Are Long Gone,” by Curbed’s Hana R. Alberts: “[Check] out vintage postcards and accompanying mini-histories of 10 New York City hotels that are no more. …Claremont Inn…Astor House…Hotel McAlpin…Ben Riley’s Arrowhead Inn…Commodore Hotel…Hotel Majestic…Beekman Tower Hotel…Terra Marine Inn…Hotel Woodstock…Brevoort Hotel”.

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