Archive for 2009

Sharing the Blame for the Economic Crisis?

The Crisis: Immoral, illegal and makes you fat unethical… How does the financial industry get away with it? William K. Black explains.  Watch this excellent interview with Bill Moyers!  (Hat tip to Barry Ritholtz.) – Ilene

Sharing the Blame for the Economic Crisis?

"The financial industry brought the economy to its knees, but how did they get away with it? With the nation wondering how to hold the bankers accountable, Bill Moyers sits down with William K. Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s. Black offers his analysis of what went wrong and his critique of the bailout."  PBS Video here.

YouTube:  Moyers 1/3: Sharing the Blame for the Economic Crisis?

 YouTube:  Moyers 2/3: Sharing the Blame for the Economic Crisis?

Moyers 3/3: Sharing the Blame for the Economic Crisis?

 

William K. Black is currently an Associate Professor of Economics and Law at the University of Missouri-Kansas City School of Law. He was the Executive Director of the Institute for Fraud Prevention from 2005-2007… He was litigation director for the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and the General Counsel of the Federal Home Loan Bank of San Francisco. He is the author of the popular book, "The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry", 2005, University of Texas Press. On April 3, 2009 Black appeared on "Bill Moyers Journal" on PBS and provided some disturbing commentary on the current banking crisis. In the interview with Bill Moyers, Black asserted that our current banking crisis is essentially a big Ponzi scheme, that the "liar loans" and other financial tricks were essentially illegal frauds, and that the triple-A ratings given to these loans was part of a criminal cover up.  More at Wikipedia.

 





Swing trading virtual portfolio – Optrader

We were right in the comments by saying that we were not making much money this month and not losing much either: +0.87R (or approximately 2%) profits for the whole month on closed trades!

It is certainly better than losing money as this was a very difficult month to trade with high volatility. We were very well balanced, and booked profits fast when we got some.

WMT calls was the big winner this month. For the trades still opened, we still have APPL calls to book, which will probably be our biggest win since we started this virtual portfolio. There are also a couple trades, such as AMZN puts, that went against us.

We are up 53.75% for 2009 so far, thanks to our exceptional month of January.

 

- Optrader





Weekly Wrap Up

Another week, another 5% gain – isn't the stock market easy?

We've gained 1,400 points in 4 weeks from our March 9th low of 6,600 – pretty impressive on the whole - but we have suffered a serious decrease in upward momentum since March 23rd, when we finished at 7,775.  That's 1,175 points in 10 sessions followed by just 225 over the next 9.  It's a little hard to reconcile this very toppy sort of action with the "bull market" mania that has swept the media this past week.  We've been bracing ourselves for a slap of cold water all week that never really came although this weekend the WSJ ran this nasty unemployment graph along with an article titled: "Time to Brace for Trouple as Profits Debacle Starts" which reminds us why we went into the weekend 55% bearish.

In last weekend's post I warned: "Don’t forget I was looking for something like a 5% pullback and "all" we got was 2.5% so far" and it only took minutes out of the gate on Monday morning to give us the rest of that 5%.  I reposted our target levels on Monday morning of Dow 7,636, S&P 805, Nas 1,525, NYSE 5,075 and Russell 420, which were well tested Monday and Tuesday until we got a proper breakout on Wednesday morning

I was actually more optimistic on Monday than I am today as Monday our plan was we were hoping to hold our pullback levels and form a base we could build off.  The problem was the way we did rally made no sense – we didn't climb a wall of worry – we climbed a wall of ACTUAL bad news that gave us brand new reasons to worry.  While the difference may sound subtle – it's actually a big deal!  As a UBS economist I quoted in Monday's post said:  "he housing market isn’t about to start booming, but the intensity of the pain will probably recede."  This is the result of our abusive relationship with the markets as they declined over 50% in 6 months – the mere absence of pain is treated as pleasure.

We had 4 new trade ideas from the Weekend Reading post in HIG, ING, FXE and BLK with all but
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Will 850 Hold? SP500 Weekly Chart View

Corey updates his analysis of the SP500 chart and contemplates whether or not 850 will hold.  He sounds decisively undecided, but alert.

Will 850 Hold? SP500 Weekly Chart View

Courtesy of Corey Rosenbloom at Afraid to Trade

With the S&P 500 closing just shy of 850, will this level hold as resistance?  A test of the 20 week EMA and negative volume divergence hint that it may.

Keep in mind that the market has recently ‘blown through’ key resistance levels so who’s to say this one is any more important?  But it does seem likely that bears might counter-check the recent bullish upside  momentum with at least a downswing that could start at this level.

Back to basic Technical Analysis, price is in a confirmed downtrend, and the moving averages are in the most bearish orientation possible.  Price has rallied up to test the falling 20 week EMA and we see a slight negative volume divergence (higher price on steadily lower volume) forming under the recent swing up.

We’re coming off a type of Three Swing Positive Momentum Divergence on the 3/10 Oscillator, so that hints that we might get a more powerful than expected rally, but divergences are often only good enough to forecast a short-term trade back to test the 20 EMA (on the timeframe in which it develops).  If so, then we achieved this target on Friday’s close.

In the week ahead, let’s watch the 850 level closely for signs of weakness on the part of the bulls… and if bulls can push through this resistance, then a challenge of the 2009 highs from January (at 950) may be the next likely target, no matter how much the bears want this market to head lower.

Corey Rosenbloom
Afraid to Trade.com

 

 





Case Shiller March 2009 Analysis

What stands out to me is the general assumption that declines will continue, and cities which have so far held up better than others may have some catching up to do. – Ilene

Case Shiller March 2009 Analysis

Courtesy of Mish

Inquiring minds are considering the Case Shiller Home Price Release for March 2009.

New York, March 31, 2009 – Data through January 2009, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, shows continued broad based declines in the prices of existing single family homes across the United States, with 13 of the 20 metro areas showing record rates of annual decline, and 14 reporting declines in excess of 10% versus January 2008.

The chart above depicts the annual returns of the 10-City Composite and the 20-City Composite Home Price Indices. Following the lead of the 14 metro areas described above, the 10-City and 20-City Composites also set new records, with annual declines of 19.4% and 19.0%, respectively.

The chart above shows the index levels for the 10-City Composite and 20-City Composite Home Price Indices. As of January 2009, average home prices across the United States are at similar levels to what they were in late 2003. From the peak in the second quarter of 2006, the 10-City Composite is down 30.2% and the 20-City Composite is down 29.1%.

Please see the original article for more commentary and tables on the data.

Case-Shiller Declines Since Peak

The following charts were produced by my friend "TC" who has been monitoring Case-Shiller Data. Although individual cities topped at varying times, the top-10 and top-20 city composites peaked in a June-July 2006 timeframe.

Case-Shiller Declines Since Peak Current Data

click on chart for sharper image

Case-Shiller Declines Since Peak Futures Data

click on chart for sharper image


"TC" writes:

The Jan 2009 Case-Shiller data continues to accelerate to the downside at a record pace. The 10 and 20 city index show declines from their peak at 30% and the bubble cities (along with Detroit) all have declines of 40% or more with Phoenix having the largest percentage drop of nearly 50%. Additionally, all 20 cities tracked by Case-Shiller have now experienced price declines in excess of 10%. I want to once


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Exposing The Utter Hypocrisy Of The FDIC

Here’s another disturbingly fascinating article by Tyler Durden at Zero Hedge. – Ilene

Exposing The Utter Hypocrisy Of The FDIC, And How Andy Beal Is Making A Killing Off It

Courtesy of Tyler Durden at Zero Hedge

For all those who feel like punching their monitor or TV every time the administration says that the legacy loan program is fair and equitable at a transaction price in the 80-90 cent ballpark, we have some news for you (that will likely make the half life of said monitor or TV even shorter).

But first, there has been a lot of speculation about where banks have marked their commercial loan portfolios. Zero Hedge had previously discovered and disclosed interpretative data from Goldman, which concluded that the major banks were still stuck in a fairytale world where these loans were marked in the 90+ ballpark, a far, far cry from where comparable loans would clear in the market. Of course, FDIC’s head Sheila Bair (who many WaMu shareholders lately do not feel too hot about) had some interpretative voodoo of her own, claiming the bid offer disconnect is purely due to a lack of liquidity and access to financing: 

"It has been clear for some time that troubled loans and securities have depressed market perceptions of banks and impeded new lending. Difficult market conditions have complicated efforts to sell these troubled assets because potential buyers have not had access to financing. The Legacy Loans Program aligns the interests of the government with private investors to provide financing and market-based pricing, and is a critical step forward in the process of restoring clarity to the markets. While there are inherent challenges to implementing a program of this magnitude quickly, the framework announced today provides the foundation upon which the FDIC will begin to build immediately."

So it came as a big surprise that none other than the FDIC keeps a track of where commercial loans clear in its own internal auctions. In a relatively obscure part of the FDIC’s website, there lies a little gem of disclosure, which exposes all the rhetoric by Sheila Bair and by other members of the administration as hypocrisy on steroids. We bring you: FDIC’s closed loan sales database. Zero Hedge took the liberty of compiling some of the data


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Wall Street Back To Its Criminal Ways?

Here’s an interesting piece on market manipulation, dug up by Zero Hedge.

Wall Street Back To Its Criminal Ways?

There was a time on Wall Street when insider trading was rampant, when sellside analysts would pump stocks under the guidance of their superiors only to have their corporate finance colleagues do an equity offer shortly after, when the amount of money a bank’s corporate clients paid would determine its rating, and when analysts said in internal emails a company is worthless, only to issue reports claiming the company was the next sliced bread. Then things changed for the better briefly, when Spitzer came on the stage. However, with his thunderous fall from grace in an act of utter hypocrisy, the behavior he fought so hard to curb started gradually coming back.

Yesterday, Wall Street’s shadiness came back with a vengeance.

 
As Zero Hedge disclosed yesterday, mall REIT Kimco decided to dilute its equityholders by issuing over $700 million (including the green shoe) in new shares which would be used to buy back the company’s debt, as KIM has $735 million in debt maturities over the next 3 years, and a $707 million currently drawn on its secured credit facility. One look at the company’s equity prospectus reveals that the lead underwriter is non other than "scandal-central" investment bank Merrill Lynch. [click on images for larger views]
 

 
There is, of course, nothing wrong with being a member of an underwriting syndicate – in fact, absent generating profits from AIG structured finance liquidations forever, banks like ML (better known these days as Bank of America’s slam dunk acquisition if one listens to Ken Lewis) will need it if they want to generate revenues. However, what Zero Hedge has a major problem with, is what ML equity research analyst Craig Schmidt did hours if not minutes after the offering was announced. In a research note update, Schmidt, who now gets his paycheck from Bank Of America (this will be relevant in a second), raised KIM’s rating from Underperform to Buy.

 
This is where visions of Jack Grubman should resurface. While Zero Hedge will not speculate over the efficiency of the Chinese Wall at Merrill Lynch, aka Bank Of America, something


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W.H. team discloses TARP firm ties

From NatureAre there NO conflict of interest rules when it comes to financial companies and government positions? 

W.H. team discloses TARP firm ties

By Kenneth P. Vogel at Politico

Lawrence Summers, a top economic adviser to President Barack Obama, pulled in more than $2.7 million in speaking fees paid by firms at the heart of the financial crisis, including Citigroup, Goldman Sachs, JPMorgan, Merrill Lynch, Bank of America Corp. and the now-defunct Lehman Brothers.

He pulled in another $5.2 million from D.E. Shaw, a hedge fund for which he served as managing director from October 2006 until joining the administration.

Thomas E. Donilon, Obama’s deputy national security adviser, was paid $3.9 million by the power law firm O’Melveny & Myers to represent clients including two firms that receieved federal bailout funds: Citigroup and Goldman Sachs. He also disclosed that he’s a member of the Trilateral Commission and sits on the steering committee of the supersecret Bilderberg group. Both groups are favorite targets of conspiracy theorists.

And White House Counsel Greg Craig earned $1.7 million in private practice representing an exiled Bolivian president, a Panamanian lawmaker wanted by the U.S. government for allegedly murdering a U.S. soldier and a tech billionaire accused of securities fraud and various sensational drug and sex crimes.

Those are among the associations detailed in personal financial disclosure statements released Friday night by the White House…

More here.

 





What Now For The S&P 500?

Braunie’s target for the S&P is quite a bit lower, here’s why:

What Now For The S&P 500?

Courtesy of Braunie at The Market Guardian

The dramatic run up of 25% that we have seen in the S&P 500 from it’s 666 lows may be coming to an end. The retracement back over the 840 level should provide sufficient resistance to reverse this market to the downside. I am looking for an area to once again get short this market and trade with the major trend in our favor. Would you believe me if I said the target for the S&P is down near 500?

Checkout this short video that will cover two important elements in trading: the Elliott wave theory, and the other is the Fibonacci retracement levels that prove right more than wrong. As always, the video is available with our compliments and there is no requirement to register to watch this video. Click the chart to see the video.

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The Credit Bubble Was a Ponzi Scheme Enabled by the US Dollar

Jesse’s Café Américain  -- A glimpse of reality: US debt, the greatest bubble of them all.

The Credit Bubble Was a Ponzi Scheme Enabled by the US Dollar

Courtesy of Jesse’s Café Américain

They say a picture is worth a thousand words.

Here is a picture of the US credit bubble, with the deleveraging which has just begun.

It is/was a Ponzi scheme, enabled by the advantages of controlling the reserve currency of the world, pure and simple.

[click on charts for sharper images]

It was the US dollar that was monetized, or more specifically US debt obligations, which are now substantially worthless and will have to take a significant haircut in real terms. This is similar to the Japanese experience in which they monetized their real estate.

Ironically, those expecting this deleveraging to result in a stronger dollar could not be more mistaken. The Obama Administration is scrambling to obtain relief from Europe and Asia, getting them to inflate their own currencies through ‘stimulus,’ in order to continue to hide the unalterable truth – the US must partially default on its debt as expressed in the dollar and the Bond.

This is the inevitable outcome of all Ponzi schemes. Several smaller, private schemes already have collapsed. The big one is yet to come down. And when it does, the foundations of democracy will shake, several governments will fall, and we will once again experience the kind of uncertainty more familiar to those who lived in the first half of the twentieth century.

The sad truth is that the Obama Administration has barely begun the real work of rebuilding the economy. Everything to date is simple looting, paper-hanging, and the rewriting of history.

Until the median wage improves significantly in real terms, and the economy is put back on a productive basis without relying on the unsupported expansion of credit, there will be no recovery, merely sound byte opportunities for the smoke and mirror crowd.

This is the reality.

 

Previously at Jesse’s Café Américain:

Pictures From a Monetary Bubble

Credit bubbles are very much like pyramid, or Ponzi, schemes.

The middle class is particularly hard hit as they exchange their remaining real assets in an increasingly corrupted financial system. They are dulled by falling from crisis to crisis.


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Phil's Favorites

How much longer will Maduro's grip on power last? Look to the military

 

How much longer will Maduro's grip on power last? Look to the military

Courtesy of David Pion-Berlin, University of California, Riverside

If the Venezuelan military withdraws support for President Nicholás Maduro, his end may be near.

A large middle class has been thrust into poverty in Venezuela. Food and medicine are in short supply, and malnourishment is widespread. Security forces have violently beaten back security forces and jailed leading opposition figures.

Reigning over this disaster is Maduro, who ...



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Zero Hedge

Spanish Bond Yields Plunge To Record Lows As 'Economy Improves' (Just Don't Tell The Nation's Youth)

Courtesy of ZeroHedge. View original post here.

Spain’s two-year bond yields have collapsed to a record low -35bps this week and Portugal's followed suit, plunging near record low levels as Draghi's "whatever it takes" has benefitted all those front-running bondholders but left youth unemployment hovering still near record-high levels.

...

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ValueWalk

Q2/H1 Hedge Fund Letters - Letters, Conferences, Calls, And More

By Jacob Wolinsky. Originally published at ValueWalk.

The Q2 / H1 hedge fund letters page is now up – as mentioned last time this will be more of a hedge fund news resource page. While the bulk and majority of the content will be about letters, we will also have links to conferences, feature stories and related hedge fund resources that may be of interest.

This post was started on July 1st 2017 as we like to get the hedge fund news up right away, but as the quarter just ended and we frequently update posts even six months after a time period has passed make sure to check back.

As always, before getting into the nitty gritty of hedge fund news and material we must state to protect ourselves from trolls that the links are not an endorsement whatsoever nor does any omission mean anything, besides for the fact that we do not find the letter interesting/n...



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Digital Currencies

Ukrainian Lawmakers Disclose $45 Million In Bitcoin Holdings

Courtesy of ZeroHedge. View original post here.

As Ukraine's crackdown on corruption continues, three lawmakers from Ukraine’s ruling party revealed this week that they own a combined $45 million in bitcoin, according to a report by RIA Novosti, a Russian foreign news service.

Their holdings came to light during mandatory financial disclosures by members of the Ukrainian parliament, part of an IMF-approved strategy to tamp down corruption in Ukraine. The country's democratic institutions, which were never very robust to begin with, have been further destabilized by...



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Insider Scoop

Home Depot Called 'The Best House' On The Retailer Block

Courtesy of Benzinga.

Related HD Counting the Minutes: Fed Eyed For Possible Hints Of Balance Sheet Plans, Rate Hike Benzinga's Top Upgra...

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Chart School

Time to Short?

Courtesy of Declan.

We had the profit taking sell-off and then the bounce but is now the time for shorts to come in more aggressively? After yesterday's gapped gains there was a significant slow down in the market advance. This action presents an opportunity for shorts to attack.

The Semiconductor Index is one of the most attractive indices for shorts. The massive June bearish engulfing pattern remains dominant and offers guidance going forward. Tuesday's doji has the makings of a bearish harami cross.  Technicals are bearish and aligned in shorts favor.

...

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OpTrader

Swing trading portfolio - week of August 14th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Biotech

Editing human embryos with CRISPR is moving ahead - now's the time to work out the ethics

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

Editing human embryos with CRISPR is moving ahead – now's the time to work out the ethics

Courtesy of Jessica BergCase Western Reserve University

There’s still a way to go from editing single-cell embryos to a full-term ‘designer baby.’ ZEISS Microscopy, CC BY-SA

The announcement by researchers in Portland, Oregon that they’ve successfully modified the genetic m...



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Members' Corner

Why we need to act on climate change now

 

Why we need to act on climate change now

Interview with Jan Dash PhD, by Ilene Carrie, Editor at Phil’s Stock World

Jan Dash PhD is a physicist, an expert at quantitative finance and risk management, and a consultant at Bloomberg LP. In his thought-provoking book, Quantitative Finance and Risk Management, A Physicist's Approach, Jan devotes a chapter to climate change and its long-term systemic risk. In this article, Ilene interviews Jan regarding his thoughts on climate change and the way it can affect our futu...



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Mapping The Market

The App Economy Will Be Worth $6 Trillion in Five Years

Courtesy of Jean-Luc

This would be excellent news for AAPL and GOOG to a lesser extent although not inconsequential:

The App Economy Will Be Worth $6 Trillion in Five Years 

In five years, the app economy will be worth $6.3 trillion, up from $1.3 trillion last year, according to a report released today by app measurement company App Annie. What explains the growth? More people are spending more time and -- crucially -- more money in apps. While on average people aren't downloading many more apps, App Annie expects global app usership to nearly double to 6.3 billion people in the next five years while the time spent in apps will more than double. And, it expects the...



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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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