Archive for 2009

IS CHINA THE ACHILLES HEEL?

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IS CHINA THE ACHILLES HEEL?

Courtesy of The Pragmatic Capitalist

Great piece of research here out of Societe General.  Is China, the supposed engine of global growth, actually the biggest risk to the global recovery?

http://ftalphaville.ft.com/lib/data/filecache/attachment/G/l/Global-Strategy-Weekly-06-16-09.pdf

*****

"Most areas in the markets have now discounted a V-shaped recovery. Any doubt will trigger a rapid reversal in prices. I continue to be extremely sceptical and see recent events as part of a 1930s-like, long march to revulsion. Talking about long marches, nowhere in the world fills me with more scepticism than the Chinese economic recovery. The continued enthusiasm for all things China reminds me so much of the way investors were almost totally blind to the fact the US growth miracle was built on sand. China could be the biggest disappointment yet."

 Full report here.

 


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Bloated State Police Pension Plans

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Bloated State Police Pension Plans – Something Has To Give

Courtesy of Mish

The police union in Michigan is doing what public service unions in general usually do, 1) whine for more taxes 2) Complain they need more workers to maintain safety 3) Elect layoffs over reduced pay 4) Ignore the long term issues that need addressing.

Please consider Michigan State Police layoffs take effect Sunday.

LANSING, Mich. (AP) – About 100 Michigan State Police troopers will be laid off Sunday after a last-ditch effort to avoid the job loss failed.

Members of the Michigan State Police Troopers Association voted against a furlough plan that would have temporarily cut their pay to avoid layoffs of low seniority workers.

The furlough plan would have required troopers to take 37 hours of unpaid leave over a six-week period. That would have saved jobs now, but there was no guarantee low-seniority officers would have kept their jobs in the next budget year.

Mike Moorman, the troopers’ union president, said the vote reflects dissatisfaction with how the state has handled public safety funding in recent years. Michigan has lost more than 2,000 law enforcement officers statewide this decade, including more than 400 from the state police. Positions have been eliminated as government tax revenues decline during a lengthy recession.

"The membership’s rejection of furlough time is not a reflection on our unwillingness to stop the loss of 100 troopers," Moorman said in a statement. "Our members are fed up with the lack of public safety priorities in Michigan, which have been discussed for years, yet never acted upon."

Col. Peter Munoz, director of the Michigan State Police, said in a statement he is "deeply disappointed" a solution could not be found to avoid the layoffs.

The state spent more than $8 million in the past few years training the troopers it now plans to lay off to save less than $2 million in the current budget year.

Some state lawmakers continue to question why Gov. Jennifer Granholm’s administration plans to move the police department into a new $40 million headquarters building in downtown Lansing early next year. The move could have long-term financial implications for the state police — including significantly higher annual lease payments of $3.7 million


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Paul Desmond of Lowry’s Research: 90% Down Days Siganling Trouble Ahead

Paul Desmond of Lowry’s Research: 90% Down Days Siganling Trouble Ahead

A quick video with Paul Desmond, President of Lowry Research (oldest TA firm on the Street) … a lot of talk about the 90% down days we have started to see the past 2 weeks. Just another opinion to mix in with your whirlwind of various views…

 


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Swing trading virtual portfolio – Week of June 29th, 2009

This post is for live trades and daily comments. 

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

- Optrader





Members of U.S. House Financial Services Committee Trading Stocks

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The "appearance of a problem" or a problem? 

Here’s the definition of insider trading from wikipedia

"Insider trading is the trading of a corporation’s stock or other securities… by individuals with potential access to non-public information about the company. In most countries, trading by corporate insiders such as officers, key employees, directors, and large shareholders may be legal, if this trading is done in a way that does not take advantage of non-public information."  [emphasis mine - Ilene]

…"In May 2007, a bill entitled the "Stop Trading on Congressional Knowledge Act, or STOCK Act" was introduced that would hold congressional and federal employees liable for stock trades they made using information they gained through their jobs and also regulate analysts or "Political Intelligence" firms that research government activities. The bill has not passed."

Members of U.S. House Financial Services Committee snapped up or dumped bank stocks as bottom fell out of market

Posted by Stephen Koff and Sabrina Eaton/Plain Dealer Reporters

As financial markets tumbled and the government worked to stave off panic by pumping billions of dollars into banks last fall, several members of Congress who oversee the banking industry were grabbing up or dumping bank stocks.

Anticipating bargains or profits or just trying to unload before the bottom fell out, these members of the House Financial Services Committee or brokers on their behalf were buying and selling stocks including Bank of America and Citigroup — some of the very corporations their committee would later rap for greed, a Plain Dealer examination of congressional stock market transactions shows.

Financial disclosure records show that some of these Financial Services Committee members, including Ohio Rep. Charlie Wilson, made bank stock trades on the same day the banks were getting a government bailout from a program Congress approved. The transactions may not have been illegal or against congressional rules, but securities attorneys and congressional watchdog groups say they raise flags about the appearance of conflicts of interest.

"I don’t think that any of these people should be owning these types of financial instruments," said Brian Biggins, a Cleveland securities lawyer and former stock brokerage manager. "I’m not saying they shouldn’t be in the


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Weekend Reading – Can American Consumerism Save Us?

There's hardly any point doing a wrap-up as hardly anything has been happening.

If you are buried in the daily gyrations of the market, lots of stuff happens during the day but, as soon as you step back and look at the action – you'll notice nothing really happened at all.  After a catastrophic downturn on Monday, we pretty much bottomed out at 8,250 on Tuesday until Thursday's 200-point bump and here we are, back at good old 8,450 - which is where we bumped along for pretty much all of May

Indeed our best plays have, by far, been our premium burning plays, as attested by the very nice performance of our $111,659 Virtual Portfolio, our exercise in conservative hedging that is outperforming most risk-based strategies in this very choppy market.  The other winning strategy in this annoying market has been Day Trading, and we've had fantastic performance from our Oxen Group picks each morning and Ilene has a good article what David looks for in "The 5 Keys to Identifying a Fundamental Day Trade."  Combine that article with our Strategy Section and my article on scaling in and you have your own little day-trader's manual! 

Est2009gdpThis will be useful next week as we have a 4-day week (Friday is the observed 4th of July) and there's no way we want to go into the 3-day weekend with too many positions so it's going to be a lot of in and out trading once again.  I probably shouldn't, but I keep focusing on these silly fundamentals like Bespoke's GDP chart on the right.  These are FACTS, which are the things being ignored as you hear things like Friday's Michigan Consumer Sentiment hit 70.  I often point out that these are the same consumers – 60% of whom, when polled, believe their homes have held their value or gone up in value.  Just because they are all chipper for the pollsters, does not mean they will be out there turning these economies around.

US consumers are the New York Yankees of global consumption.  They are indimidating, they are record-setting and, from an historical perspective, they give the IMPRESSION of being unbeatable - but I grew up in New York and remember a streak from 1965 to 1975 when they didn't win a single pennant.  That's a team that has averaged one World Series Title every 3.3 years since 1923 (26 Times World Champs) and one
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The 5 Keys to Identifying a Fundamental Day Trade

For a free subscription to Phil’s Stock World, click here (it’s easy, no credit card required). 

David, at The Oxen Group, has been kindly providing us with day-trading picks before the market opens. He has an excellent track record, which is posted in Oxen Group section and updated every few days. Below is an outline of the factors he considers when identifying high-probability trading opportunities. For more, visit The Oxen Group website and sign up for a free newsletter. - Ilene

The 5 Keys to Identifying a Fundamental Day Trade

day trading, quotesOne of the main sections of our site is our Oxen Picks. These are day trades that The Oxen Group makes everyday that are ideas for stocks we believe will move up for a single day that investors can make 3-5% on each day. The Oxen Picks have had some significant growth since we started them, making nearly 40% on a $3,000 portfolio. The portfolio has no long-term stocks. Every stock we buy, we sell the same day. And, we only buy one stock every day. The method behind it, however, is sound and continues to foster growth. That method begins with fundamentals and the 5 Keys to Identifying a Fundamental Day Trade.

Today, I am going to lay out for you the five keys to executing the fundamental day trade that will help you become a better day trading investor by identifying 5 signals that can help you select a trade. These signals are easy to understand and they will help transform your trading style into a much more astute investment strategy.

Identifying the Fundamentals

To begin to look for that perfect stock or ETF that will move up 4-5% in a single day, we first need to look for something that can propel the stock. Even the best technicals seldom can give you 5% upward movement intraday alone. This 4-5% movement we are talking about, additionally, is not from yesterday’s close, but it is movement within the day. That means we want to identify a stock that can be bought sometime in the morning and sold later in the day that will give us significant upward movement from our entry.

Stocks do not move on their own, though, therefore there are a number of fundamentally bullish categories that we can use to identify stocks:

1. Earnings

There are multiple ways to play a company’s…
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Zombie Community Banks

Zombie Community Banks

zombie banks, dead banks walkingCourtesy of Tom Lindmark at BUT THEN WHAT

With all the hoopla this week about the big banks repaying their TARP loans you would tend to think that the program is, if not winding down, then in a collect the interest and wait for repayment mode. If that’s the case, they you’re thinking if wrong.

The WSJ reports that the Treasury is busier than ever dolling out money to banks. This time they aren’t shoveling it out the door in chunks of billions of dollars, rather they’re spooning it out to the nation’s community banks.

In contrast to Wall Street firms like J.P. Morgan Chase & Co., Goldman Sachs Group Inc. and American Express Co. that returned $68.25 billion in one day this month to escape TARP and all the strings that were attached, a steady stream of small banks still is lining up for government money.

Since May 31, 20 small banks have received a total of $164.1 million in taxpayer-funded capital, according to the Treasury’s latest available figures. Half of those banks got the money in the same week that 10 big financial institutions gave theirs back.

Analysts see no end in sight to the trend. The recession and borrowers are squeezing most of the 8,200 federally insured commercial banks and savings institutions in the U.S., so even a dollop of TARP funds could make a difference. Some banks are turning to the government to fill a void left by investors who are leery about pouring money into the sector, despite the rebound by bank stocks since early March.

Meanwhile, the rules and stigma of TARP that turned some executives such as J.P. Morgan Chairman and CEO James Dimon against the program are irrelevant to small institutions.

Their employees usually don’t fly on corporate jets or collect hefty bonuses that trigger outrage from taxpayers, customers and Congress. And curbs on dividend payments are a modest price to pay for greater assurance that the banks can plow ahead with their core mission to gather local deposits, lend them nearby and support local charities, some recent TARP recipients said.

Maybe I’m missing the point, but TARP always seemed to me to have evolved into a program to recapitalize big banks, in essence to create the fiction that they were properly capitalized and hope that the banks would be able to repay the funds through earnings and a benevolent…
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The End of the Recession?

Courtesy of John Mauldin’s Thoughts from the Frontline

John Mauldin is a multiple NYT Best Selling author and recognized financial expert. He has been heard on CNBC, Bloomberg and many radio shows across the country.

The End of the Recession?green shoot

By John Mauldin

Last week we began a series on data abuse, about how various commentators twist and torture data to make it say what they want, or fail to look at the details underneath the headlines. Predictably, there is a lot of fodder this week as we forge ahead into this ripe territory. The headlines screamed that US income data went up unexpectedly. Green shoots were everywhere. But if you look at the actual data, you find something much different. And, I keep hearing the insistent refrain that the market is telling us that the recovery is around the corner. Well, the recovery may be, but can the market really tell us that? I have about 25 windows open in my computer, with tons of misleading data. Let’s see how much we can cover in this week’s letter.   [More information on John Mauldin's subscription service here.]

And now to funny-looking data. Where to begin? There are so many targets of opportunity!

The End of the Recession?

I walked into the office yesterday evening and there was someone on CNBC talking about how the 50-day moving average of the S&P 500 rising above the 200-day moving average was telling us the market was getting ready to rise and the recovery had started. I listened to his babbling for another 2-3 minutes and couldn’t take it anymore (and no, it was not my friend Larry Kudlow, who is a lot more balanced than whoever was on.)

We keep getting told that the market is telling us "something," usually that the recession is going to end. For some reason, people keep repeating the bromide that the market looks out about 6 months. To that I politely say, rubbish.

Riddle me this, Batman. Did the market see the recession in October of 2007? We were already in recession and the S&P 500 (see below) was making new highs! Where was the market prescience? Did it see the 25%+ drop in January of this year? And I could go back and cite scores of examples where the market "missed" the future turning points over the past ten decades.

jm062609image001
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Embrace Deflation – It’s The Cure, Not The Problem

Embrace Deflation – It’s The Cure, Not The Problem

deflationCourtesy of Mish

Concern over Japanese deflation is increasing. Please consider Japan Succumbs to Deflation as Consumer Prices Fall Record 1.1%

Japan’s consumer prices fell at a record pace in May, adding to the risk that deflation will become entrenched and hamper a rebound from the nation’s worst postwar recession.

Prices excluding fresh food slid 1.1 percent from a year earlier after dropping 0.1 percent in the preceding two months, the statistics bureau said today in Tokyo. It was the sharpest decrease since comparable figures were first compiled in 1971.

Bank of Japan Governor Masaaki Shirakawa said last week that price declines will accelerate through the middle of the fiscal year as demand slackens and crude oil continues to trade lower than last year’s record. Retailers including Aeon Co. are cutting prices to attract customers as falling wages and the worsening job outlook damp spending.

“Profits fall, then wages come down, then consumers stop shopping,” said Junko Nishioka, chief Japan economist at RBS Securities Japan Ltd. in Tokyo. “And because people aren’t shopping, companies lower prices. That’s the process that we’re starting to see. It isn’t easy to break out of.”

“With demand deteriorating, companies are finding it more difficult to sell goods and services and are turning to discounting,” said Azusa Kato, an economist at BNP Paribas in Tokyo.

Some 47 percent of 775 Japanese retailers surveyed by the Nikkei newspaper plan to lower prices in the year ending March 2010 to spur sales, up from 9 percent a year earlier. Aeon, Japan’s second-largest retailer, this week started a discount campaign for confectionary, drinks and mayonnaise.

Consumers, whose spending accounts for more than half of the economy, may delay purchases if they expect goods to get cheaper. That would erode profits and force companies to cut wages, which have already slid for 11 months. Japan only escaped from a decade of deflation in 2005.

Japanese Deflation Deepens

As Japanese deflation deepens, Japanese Bonds Complete 2nd Weekly Gain.

Japan’s bonds gained for a second week as a government report showed consumer prices fell at a record pace, adding to signs deflation will hamper the economic recovery and boost the value of the fixed payments of debt.

Ten-year yields touched the lowest in almost three months after the statistics bureau said yesterday


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Chart School

Selecting gold stocks by relative strength

Courtesy of Read the Ticker.

Before you make your investment decisions stop and review the relative strength of the stock to the sector or index.


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NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net

Investing Quote...

...“After spending many years in Wall Street and after making and losing millions of dollars, I want to tell you this:  It never was my thinking that made the big money fo...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Merkel Rules out Assistance for Deutsche Bank, Focus Reports (Bloomberg)

Chancellor Angela Merkel has ruled out any state assistance for Deutsche Bank AG in the year heading into the national election in September 2017, Focus magazine reported, citing unidentified government officials.

A divided town in Connecticut shows that finance is ruining Ame...



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ValueWalk

10 Timeless Lessons from Bernard Baruch

By Investment Master Class. Originally published at ValueWalk.

By Investment Master Class

Known as “The Lone Wolf of Wall Street”, Bernard Baruch was one of the the world’s most famous speculators of the 20th Century.  By the age of 30, Mr Baruch had amassed a fortune.  He went on to advise US presidents and congressional leaders from 1918 to 1948.

His memoirs, “My Own Story”, written in 1957, provides a fascinating account of Baruch’s life, his insight into human psychology and the history of speculation.  His first hand account of market pani...



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Zero Hedge

Washington Mall Shooter Caught: Suspect Is 20 Year Old Turk

Courtesy of ZeroHedge. View original post here.

Following last night's shooting at the Cascade Mall in Burlington, WA mall, when an unidentified gunman killed 5 then managed to slip away from authorities for nearly 24 hours, moments ago the Washington State Patrol tweeted that the shooter has, after a daylong manhunt, been captured.

Gunman captured tonight by authorities, Details forthcoming, Press Conference tonight at 1800 Continental Pl. Time TBA

— WA State Patrol (@wastatepatrol) September 25, 2016

The m...



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Phil's Favorites

A Sunni Muslim Addresses the Question: Is "Radical Islam" the Problem or is "Islam" the Problem?

Courtesy of Mish.

In 2015, President Obama told CNN that 99.9 Percent of Muslims Reject Radical Islam. He made the comments in response to a question about the White House avoiding using the phrase “Islamic terrorists.”

Hillary Clinton says “Let’s be clear: Islam is not our adversary. Muslims are peaceful and tolerant people and have nothing whatsoever to do with terrorism.”

Are they correct?

Obama Rejects Religious War

“It’s absolutely true that I reject the notion that somehow that [Isis] creates a religious war”.

Let’s Be Clear...



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Kimble Charting Solutions

Crude Oil attempting key breakout, says Joe Friday

Courtesy of Chris Kimble.

Below looks at Crude Oil on a “Monthly Closing” basis, since the early 1980’s.

Crude Oil started tanking in 2014 and its low earlier this year, took place at dual long-term support at (1) below.

CLICK ON CHART TO ENLARGE

Two support lines, that date back over a decade, came into play at (1) and so far have held. Crude remains in a down trend and this down trend is being tested at this time.

Joe ...



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OpTrader

Swing trading portfolio - week of September 19th, 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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Members' Corner

Market Liquidity and Macroeconomic Bullshit

 

Market Liquidity and Macroeconomic Bullshit

Courtesy of The Nattering Naybob

STJL - "Apparently macroeconomics is all bullshit – ROFL! Paging Naybob now… Famous Economist Paul Romer Says Macroeconomics Is All Bullshit."

The Nattering One muses... Macroeconomics as practiced by academics and those in charge is pure voodoo. Better to chant over goat blood, bird feathers and scattered entrails...

As for reality, overnight CNH HIBOR (...



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Mapping The Market

Here's a Cautionary Tale of Pension Privatization From Chile

Via Jean-Luc:

"When you let the free market take over, the little people get screwed and bankers get rich. Chile tried privatizing retirement plans and surprise, surprise, fund manager ate the profits… Pretty sure the results would be the same here..."  ~ Jean-Luc

Here's a Cautionary Tale of Pension Privatization From Chile

By KEVIN DRUM, Mother Jones

Among free-market fans, Chile's privatized pension plan has long been held up as a model for us to follow. The problem, as the Financial Times notes today, is ...



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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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Biotech

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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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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