Archive for 2009

Days of the Roundtable

Time for a Roundtable discussion.  Yes, round, do not argue

Days of the Roundtable

Courtesy of Michael Panzner, at Financial Armageddon

I rely on a variety of resources, including newsletters, blogs, and the mainstream media, to try and figure out what the future holds.

One publication that has always been helpful in this regard is Barron’s, the investment weekly, which I’ve been reading for several decades. Among the features I enjoy are Alan Abelson’s Up and Down Wall Street column and the Q&As with experts who, in many cases at least, seem to have been selected because they actually know what they are talking about (unlike many of those who are regularly quoted or profiled elsewhere).

What I especially look forward to, however, are the "Roundtable" issues, which feature articles drawn from moderated discussions between a select group of old hands, many of whom I respect a great deal.

Luckily enough (for those who don’t subscribe, at least), the financial weekly seems to be running a promotion whereby some of the material from the January 10th issue, which includes the first installment of the Annual Roundtable discussion, is available for free to nonsubscribers (though I’m not sure how long that will last).

Anyway, here is an excerpt from the article, entitled "Hang on Tight!" which includes a welcome sampling of the always straight-shooting and thought-provoking insights of Marc Faber and Fred Hickey.

Our go-to group of investment experts sees tough times for the economy — but good fortune for stockpickers.
ONCE UPON A TIME, WE LIVED IN A WORLD where asset-price inflation begat leverage, which begat more asset inflation, in a virtuous circle known as the great bull market. We bought bad art, good wine and vacation homes (many), and stocks "on the dips," which made us rich. And geniuses, of course.

Then the big, bad wolves — greed and excess — came and popped our bubble, and the markets’, and all the pretty assets fell to earth. The fairy god-mother — bearing a strange name for a godmother, Uncle Sam — tried to clean up the mess with great gobs of money, but little success. The

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It’s Schadenfreude Saturday!

Sunday too!  For anyone not familiar with the word "Schadenfreude," it is a loanword from Germany and means "pleasure taken from observing the misery of another."

It’s Schadenfreude Saturday!

Courtesy of Greg Newton, at NakedShorts.


Capping the payoff

Having earned been paid $115 million since 1999 for taking lunch and, on a busy day, pontificating, former Treasury secretary Bob Rubin capped his payoff for helping debauche Glass-Steagall, without which intervention Citi might still be a functional financial institution rather than a ward of state. 

Not forgetting, of course:
Inside and outside the bank, Mr. Rubin is blamed by some for pushing Citigroup to rev up risk-taking as the housing and derivatives bubbles expanded — a move that has saddled Citigroup with tens of billions of dollars in write-downs and necessitated a sweeping government bailout of the financial giant…Citigroup’s share price is down 70% since he came on board.
In the next turn of the revolving door, NakedShorts has the over/under on Hank Paulson joining the board of JP Morgan Chase (or similar) at Sep. 2009. And is taking the under. (Related links after the jump).

Bailing on another Ponzi

The eponymous J. Ezra Merkin resigned as chairman of GMAC LLC, slipping over the gunwales of the Cerberus-GM joint venture under cover of a “board restructuring” triggered by a TARP-funded bailout that, but for the fact that TARP has no rules other than whatever Hank & Neel say they are, seemed to have broken every rule in the book.
Mr Merkin stands at an intersection of two of the largest current business stories — the federal bailout of the auto companies and the Madoff financial scandal.
In addition to being chairman of GMAC, Mr Merkin is a hedge fund operator who invested more than $1.8 billion of his clients’ money with Mr Madoff. Mr. Merkin’s three private investment funds — Ascot, Ariel and Gabriel — are among the largest of the so-called feeder funds that placed investors’ money with Mr Madoff without their knowledge, according to the investors. Mr Merkin collected millions of dollars in management fees annually for his work.
Among all the allegedly professional money managers hit by the Madoff fraud, Merkin has been

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My Elliott Analysis

Here’s another EW analysis, making it clear that EWers in general believe that the market is approaching a turn from a corrective move up (wave 4) to a final move down (wave 5) to complete an Elliott Wave cycle. Differences between analyses are in the details of current wave 4, with the consensus being that wave 4′s end will result in another significant leg down in the markets.

My Elliott Analysis

Courtesy of Allan

Three updated charts of the S&P 500 index as of Friday’s close. In descending order, the Weekly, the Daily and a 60 minute chart.

The chart above is our main compass, a Weekly S&P 500 chart that is in the midst of a five wave sequence down from the 2007 highs. There are three clearly designated completed waves and by implication, a Wave 4 that has been sliding and slinking its way sideways to up against the major downtrend. A previously drawn wedge is placed earmarking this 4th Wave with the hope of isolating either an extended Wave 4 by a break upwards out of the wedge, or a completed Wave 4 by a breakdown below the wedge. As is obvious, neither an up or down breakout has yet occurred. By zeroing in on a couple shorter time frames, maybe we can glean some clues as to which way prices are headed.


Above is a Daily chart with a broader view of the 4th Wave. I’ve drawn in a channel that encompasses all price action since the November 21, 2008 low. Superimposed on that price action is a simple ABC sequence culminating with a Wave 4 top as of the close on Tuesday, January 6, 2009. What isn’t clear on this chart is whether or not Friday’s decline broke the bottom of that upward rising channel. For some clarity, let’s look at the 60 minute chart below.

Sixty minute

Whoa, Nellie (not an orthodox Elliott observation), this chart shows a break of that lower trend line clear as a bell.

The phrase means simply "very clear." A bell is used as a model of clarity because the sound of a bell

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Citigroup Pieces For Sale

Mish follows up the NY Times article saying goodbye to Robert E. Rubin at Citigroup and forecasting a piecemeal distribution of assets. 

Citigroup Pieces For Sale, Starting With Smith Barney

Citigroup is likely to be broken up. The New York Times highlights the story in Rubin Leaving Citigroup; Smith Barney for Sale.

Citigroup signaled a breakup of its unwieldy financial supermarket model with a possible deal to sell a share of its prized retail brokerage business to Morgan Stanley, said several people with knowledge of the discussions, underscoring the enormous problems the bank continues to confront even after receiving taxpayer bailout funds.

The new chapter of wrenching change came as former Treasury Secretary Robert E. Rubin, who came under fire for his strong support of that model in an advisory role that helped fuel the bank’s troubles, said he would resign.

The developments highlight how badly Citigroup has been damaged by the global financial crisis. Deepening losses, declining confidence in its leadership and a desperate need to raise capital have forced the bank to rethink the strategy it has clung to for years.

“This is either a one-off or the first inkling of a dismantlement of the company, taking apart of what John Reed and Sandy Weill did,” a senior executive with ties to the company said, referring to the two leaders who forged the landmark deal to bind Citicorp and Travelers Group in 1998.

With pressure mounting on Vikram S. Pandit, Citigroup’s chief executive, the company’s executives say the decision to split off Smith Barney, the “crown jewel” brokerage business he said he loved a few months ago, suggests the bank’s troubles are so deep that he is looking to reshape the company in a former image of itself.

While a deal is not yet final, such a change would position Citigroup to look more like Citicorp — a global franchise with strengths in trading, corporate and investment banking, and international consumer banking — than the bloated and unwieldy company it has become.

It also could lead to yet another shift in power on Wall Street. A joint venture with Morgan Stanley would create the nation’s largest brokerage network of 20,000 advisers, edging out Merrill Lynch’s thundering herd of brokers that Bank of America snapped up in September. Citigroup and

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Please Resume Your Chit-Chat

So fraud and deception is rampant in the securities industry, and the best solution is an overbroad, ambiguous ban on free speech?   

Life of Illusion – Joe Walsh

BuySide: Please Resume Your Chit-Chat

StockJockey's avatarCourtesy StockJockeyChris Cox

Securities regulators have done a lot of stupid things over the past year, but the SEC’s temporary ban on short selling financial stocks was probably the biggest. SEC chairman Chris Cox called it the biggest mistake of his tenure and the unintended consequences to Hedgistan, combined with the downfall of Lehman Brothers, unleashed a 1-2 punch that decimated the gang that probably deserved a medal, as opposed to the enema they received.

My take is that Hank Paulson (after being goaded by brokerage CEOs) strong-armed Cox into the move; intimidation seems to be a big part of Paulson’s management style. Bernanke does not seems to stand up to him either and will finally crawl out from under his desk as Paulson leaves town in two weeks.

But one of the more asinine proposals regulators have been floating is to restrict communication between money managers. Dan Loeb of Third Point LLC is never one to back down from a scrap, and penned a response to regulators who were seeking to blame shorts for talking amongst themselves and driving down the stocks of brokers:

Such conversations permit us to test our hypotheses and refine our thinking and, as a result, we believe that participating in give-and-take with other managers is in the best interest of our investors. Our outside counsel has examined this matter thoroughly and assured us that our position is consistent with the securities laws and that we have not violated any law in connection with these communications.

Now an industry group is rallying behind Loeb and the BuySide. Great news, but what took so long?

Hedge Fund Industry Opposes FINRA Rule on Circulation of Rumors  -  by Jim, at Jim Hamilton’s World of Securities Regulation

The hedge fund industry is concerned that a proposed FINRA rule designed to prevent the intentional circulation of rumors for the purpose of manipulating the market will interfere with the beneficial free flow of investment ideas. In a letter to FINRA, the Managed Funds Association said that proposed Rule 2030 would impair the ability of money managers to receive and investigate the validity of market information and have a negative impact on the overall efficiency of the marketplace. The MFA urged FINRA…
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THE WEEK THAT WAS 1/5-9/2009

“My bet is that the index may flirt with higher levels but very briefly and then will retrace to test 8348.”


-The INDU closed Friday right on its’ lower trendline.  The bearish move of this past week could begin to falter at this level, however, the index is more likely to continue its’ retracement to retest recent lows at 8348.  We are moving in a 700 point range between 8348-9065.  From a longer-term perspective, we have been making a [...]



In the beginning of our series on Risk Graphs, we talked about each of the individual trading instruments.  Among those discussed was the short call.  The short call is a marvelous tool when used in tandem with other instruments.  However when used alone, it is known as a ‘Naked [...]

THE WEEK THAT IS TO BE 1/12-16/2009

Treasury Budget
Export Prices-ex ag, Import Prices ex-oil, Retail Sales, Retail Sales- ex auto, Business Inventories, Crude Inventories
Core PPI, Initial Claims, PPI, Philadelphia Fed
Core CPI, CPI, Capacity Utilization, Industrial Production, Michigan Sentiment-Prel

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Any way that you measure it, we’re in for some rough sledding ahead.  We are about to see the result of a disastrous 4th quarter 2008 in the upcoming earnings season.  Already, we’ve gotten some ‘Same Store Sales’ figures on several retailers and they weren’t pretty.  Jobs numbers indicate further job losses.  We ended the [...]


Zero Hedge

The Elimination Of Reason

Courtesy of ZeroHedge. View original post here.

Submitted by Jeff Thomas via,

Recently, I paid for an item with the exact amount requested, including 89 cents in change. The salesgirl stared at the coins and clearly wasn’t sure what to do. Eventually, she reached for a calculator and began to total them up one at a time: 25 + 25 + 25 + 10 + 4. Having been schooled in the age prior to calculators, I’m accustomed to doing arithmetic in my head, but this particular instance evidenced a level of “dumbing down” over the last fifty years that was beyond what I had realised.


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Phil's Favorites

Global Warming Scam Exposed

Courtesy of Mish.

When you are willing to pay for global warming “research” that has a predetermined outcome, all you do is open the door for fraud.

Reader Mark emailed an example today.

Please consider Top University Passed Off Rivals’ Research to Bankroll Climate Change Agenda.

One of the world’s leading institutes for researching the impact of global warming has repeatedly claimed credit for work done by rivals – and used it to win millions from the taxpayer.

An investigation by The Mail on Sunday also reveals that when the Centre for Climate Change Economics and Policy (CCCEP) made a b...

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Global Asset Management 3Q16 - Cash is a Capital Allocation Strategy

By VW Staff. Originally published at ValueWalk.

Global Asset Management commentary for the quarter ended September 30, 2016.

Also see


Dear Friends,

Year-to-date we’v...

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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

The Brexit economy: falling pound and rising inflation fuel fears of slowdown (The Guardian)

The British economy’s post-Brexit vote bounce is losing momentum as the weak pound and higher inflation herald a squeeze in living standards, according to a Guardian analysis.

S&P 500 Skew Unwind Shows Complacency Over Clinton Win: Analysis (Bloomberg)


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Swing trading portfolio - week of October 24th,2016

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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Kimble Charting Solutions

Banks- This is putting a smile on this sector

Courtesy of Chris Kimble.

Historically, when strong bull markets have taken place, Banks go along for the ride. Since the summer of 2014, banks have under performed the broad market by around 12%, as the S&P is just a couple of percent from all-time highs. Are banks about to act healthier and put a smile on this sector, which could help the S&P breakout above the 2,150 level?

Below looks at the Bank Index (BKX)



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Chart School

Weekly Market Recap Oct 23, 2016

Courtesy of Blain.

The week that was…

A sleepy week indeed as almost all the “action” came out of a gap up Tuesday morning and a gap down Friday morning (which was met with buyers).  Outside of those events, the indexes stuck closely to unchanged most of the week.  Earnings began in earnest but outside of some individual high profile stories it was a lot of beating lowered expectations.

“Despite a couple of good reports, we’re in the midst of another earnings season that is hardly painting a bright picture,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott. “Having another quarter where profits contract is not an underpinning for stocks to advance, and the market is searching for, if not demanding, a catalyst to move higher. At the moment, one is lackin...

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Members' Corner

The Orlando Massacre Part 3

Courtesy of Nattering Naybob.

A continuation of a Naybob of IT's Natterings from Part 1 and Part 2...

While many Christian churches expressed grief and offered free funeral services for the victims of the Orlando shooting, the fundamentalist Westboro Baptist Church held an anti-gay protest during the funeral of the victims.

But the Westboro Baptist Church's protest rally was blocked by about 200 people who formed a human barricade on the main street in downtown Orlando, ...

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Mapping The Market

The Most Overlooked Trait of Investing Success

Via Jean-Luc

Good article on investing success:

The Most Overlooked Trait of Investing Success

By Morgan Housel

There is a reason no Berkshire Hathaway investor chides Buffett when the company has a bad quarter. It’s because Buffett has so thoroughly convinced his investors that it’s pointless to try to navigate around 90-day intervals. He’s done that by writing incredibly lucid letters to investors for the last 50 years, communicating in easy-to-understand language at annual meetings, and speaking on TV in ways that someone with no investing experience can grasp.

Yes, Buffett runs an amazing investment company. But he also runs an amazing investor company. One of the most underappreciated part of his s...

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Digital Currencies

Gold, Silver and Blockchain - Fintech Solutions To Negative Rates, Bail-ins, Currency Debasement and Cashless

Courtesy of ZeroHedge. View original post here.

By Jan Skoyles

I was so pleased yesterday by the announcement that I have joined the Research team at GoldCore as it meant that I could finally start talking about it and was back in a role that lets me indulge in my passion by researching and geeking out on all things gold, silver and money.


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Epizyme - A Waiting Game

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

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...

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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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PSW is more than just stock talk!


We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more! features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...

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