Archive for 2010

More Bonus + Less Lending = The March on Wall Street

Courtesy of Static Chaos

By Static Chaos

According to a Wall Street Journal analysis of Treasury Department data, the biggest recipients of taxpayer aid made or refinanced 23% less in new loans in February, the latest available data, than in October, the month the Treasury kicked off the Troubled Asset Relief Program (TARP). (Chart 1)

Excluding mortgage refinancings, consumer lending dropped by about one-third between October and February. Commercial lending slumped by about 40% over that period, the data indicates.  All but three of the 19 largest TARP recipients originated fewer loans in February than they did at the time they received federal infusions.

Meanwhile, the average Wall Street bonus soared almost 14 times higher (by 2006); the average worker’s salary has essentially been stagnant sine the mid-1980s. (Chart 2) 

Wall Street bonuses paid to New York City securities industry employees rose by 17% to $20.3 billion in 2009, according to an estimate released in February by State Comptroller Thomas P. DiNapoli.  (Click here for a chart showing bonuses paid from 1985-2009.) 

Total compensation at the largest securities firms grew even faster and industry profits could exceed an unprecedented $55 billion in 2009, nearly three times greater than the previous all-time record. In 2008, the industry lost a record $42.6 billion.

Basically, after unloading their toxic assets onto the Fed / taxpayers’ balance sheet, Wall Street is able to increase bonus partly through less lending, because with the free money from the government, banks have discovered that lending to businesses and consumers does not give them as high returns as other activities such as juicing up stock markets and commodities.

A 17% bonus increase in a recession year with a nationwide jobless rate of around 10%, coupled with a reduction in lending while receving TARP money - a sure fire recipe for becoming public enemy number 1.

So, no surprise here -- a video from WSJ.com dated Apr. 30 showing thousands of demonstrators rallied against big banks in New York’s financial district, calling for accountability and job creation.  Wonder if Goldman Sachs employees are still packing guns?  

Static Chaos





ANOTHER GREEK BAILOUT, ANOTHER MONDAY MELT-UP?

ANOTHER GREEK BAILOUT, ANOTHER MONDAY MELT-UP?

Courtesy of The Pragmatic Capitalist 

Traders piled into stocks last Thursday when the news of a Greek bailout hit the wires.  Stocks soared back to near highs as euphoria swept the markets and investors celebrated the austerity based recession that is now a near guarantee in parts of Europe.  The news became official this morning with a fresh bailout of Greece (which seems to be the market moving news just about each Sunday these days).  Greece will receive $145B in what can only be described as a Scott Norwood-like kick of the can down the road – hard but “wide right!”. Traders love the news, of course, just as they have every Sunday night that such reports have been released:

Mon ANOTHER GREEK BAILOUT, ANOTHER MONDAY MELT UP?

The politicians across Europe are playing this bailout as if it is a bailout of the people of Greece and Europe itself.   The truth is, these measures will force Greece into a near guaranteed recession for several more years and possibly to the brink of depression as savage austerity measures are imposed.  The likelihood of further austerity measures in surrounding nations is almost guaranteed as well.  Meanwhile, this bailout will be funneled through Greece and directly into the coffers of the foolish buyers of Greek bonds – primarily the large European banks.  Once again, these foolish politicians bailout Wall Street in favor of Main Street and sell it as a bailout of Main Street.  Hopefully the entire continent of Europe will remember this when they enter the voting booth.

It will be interesting to see how this evolves in the coming months.  My guess is that Greece is not the last domino in this row.  The problems in Italy, Portugal and Spain will continue to build as the Euro economy remains fragile.  Should these countries impose painful austerity measures in an attempt to get ahead of potential Greek-like problems they could actually drive their own economies closer to the brink.  The Euro has been exposed as a fatally flawed currency in its current format.   These measures have done nothing to solve the actual problem in the Euro, but have nearly guaranteed a much weaker economy than most Europeans deserve.

Despite the fact that nothing has actually been resolved here, traders are piling into equity futures overnight in anticipation of a Thursday-like celebration.  I think the following saying is appropriate:


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THE STOCK MARKET VS THE ECONOMY

THE STOCK MARKET VS THE ECONOMY

Courtesy of The Pragmatic Capitalist 

By Boeckh Investments: 

30757422-The-Economy-vs-the-Stock-Market-The-Boeckh-Investment-Letter





Editorial Note

This is a followup to TED’s previous post, American Baby

Editorial Note

Courtesy of The Epicurean Dealmaker 

No good deed goes unpunished.

— Anonymous

My recent exercise in flag-waving seems to have generated some confusion in a few quarters. If I interpret his telegraphic tweets aright1—always a risky business, under the best of circumstances—reader "CorneliusZH" seems to have interpreted my post as an attack on the banking industry qua industry, and that I implied that all its denizens, from lowest recent recruit to highest panjandrum, should be tarred with the brush of anticompetitive, plutocratic misbehavior.

This was not my intent at all.2 Let me be clear: as CorneliusZH wrote, many of the people who work in the investment banking industry are indeed Horatio Alger stories themselves. (For what it is worth, so am I.) Careful readers will recall that I alluded to the current CEO of Goldman Sachs, Lloyd Blankfein, as an admirable exemplar of that very thing.3 I have known very few, if any, colleagues or competitors over the years who have achieved success at (or even entry into) investment banking based on nepotism or anything other, really, than a rare combination of high native intelligence, relentless hard work, and grand ambition. There have been a few people I know who got a start based upon who Daddy was, but they quickly got winnowed out if they couldn’t deliver the goods like their peers. (Most of those were hired with the implicit understanding that Daddy would hand out fee business to the investment bank which hired Junior, anyway. Unless they proved themselves otherwise, such quid pro quos were always viewed as temporary investments in human capital only.)4

There was also nothing in my post which should lead a cautious reader to assume I advocate the dissolution of investment banks, the imposition of punitive taxes on finance industry compensation, or the passage of badly written, excessively repressive legislation on the industry itself. Number one, that just isn’t in my piece. And number two, have you read anything I’ve written in these pages over the past few years? Shit, man, carve out a couple days, pour yourself a few beers, and read it. You will quickly find such impressions to be badly mistaken.…
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Oil Spill: Here’s The Inside Scoop

Courtesy of George Washington

Washington’s Blog

The Gulf oil spill is much worse than originally believed.

As the Christian Science Monitor writes:

It’s now likely that the actual amount of the oil spill dwarfs the Coast Guard’s figure of 5,000 barrels, or 210,000 gallons, a day.

Independent scientists estimate that the renegade wellhead at the bottom of the Gulf could be spewing up to 25,000 barrels a day. If chokeholds on the riser pipe break down further, up to 50,000 barrels a day could be released, according to a National Oceanic and Atmospheric Administration memo obtained by the Mobile, Ala., Press-Register.

CNN quotes the lead government official responding to the spill – the commandant of the Coast Guard, Admiral Thad Allen – as stating:

If we lost a total well head, it could be 100,000 barrels or more a day.

Indeed, an environmental document filed by the company running the oil drilling rig – BP – estimates the maximum as 162,000 barrels a day:

In an exploration plan and environmental impact analysis filed with the federal government in February 2009, BP said it had the capability to handle a “worst-case scenario” at the Deepwater Horizon site, which the document described as a leak of 162,000 barrels per day from an uncontrolled blowout — 6.8 million gallons each day.

Best-Case Scenario

BP is trying to perform a difficult task of capping the leak by using robotic submarines to trigger a “blowout preventer” 5,000 feet below the surface of the ocean. Here’s a photo of the robot trying to activate the switch on April 22nd:

(courtesy of the US Coast Guard)

If successful, the leak could be stopped any day. Everyone is rooting for the engineers, so that they may successfully cap the leak.

Already, however, the spill is worse than the Exxon Valdez, and will cause enormous and very costly destruction to the shrimping, fishing and tourism industries along the Gulf Coast of Louisiana and Florida. It will be years before good estimates on the number of dead fish, turtles, birds and other animals can be made.

The Backup Plan

If the blowout preventer can’t be triggered, the backup plan is…
continue reading





Oil Spill: The Inside Scoop

Courtesy of George Washington

Washington’s Blog

The Gulf oil spill is much worse than originally believed.

As the Christian Science Monitor writes:

It’s now likely that the actual amount of the oil spill dwarfs the Coast Guard’s figure of 5,000 barrels, or 210,000 gallons, a day.

Independent scientists estimate that the renegade wellhead at the bottom of the Gulf could be spewing up to 25,000 barrels a day. If chokeholds on the riser pipe break down further, up to 50,000 barrels a day could be released, according to a National Oceanic and Atmospheric Administration memo obtained by the Mobile, Ala., Press-Register.

CNN quotes the lead government official responding to the spill – the commandant of the Coast Guard, Admiral Thad Allen – as stating:

If we lost a total well head, it could be 100,000 barrels or more a day.

Indeed, an environmental document filed by the company running the oil drilling rig – BP – estimates the maximum as 162,000 barrels a day:

In an exploration plan and environmental impact analysis filed with the federal government in February 2009, BP said it had the capability to handle a “worst-case scenario” at the Deepwater Horizon site, which the document described as a leak of 162,000 barrels per day from an uncontrolled blowout — 6.8 million gallons each day.

Best-Case Scenario

BP is trying to perform a difficult task of capping the leak by using robotic submarines to trigger a “blowout preventer” 5,000 feet below the surface of the ocean. Here’s a photo of the robot trying to activate the switch on April 22nd:

(courtesy of the US Coast Guard)

If successful, the leak could be stopped any day. Everyone is rooting for the engineers, so that they may successfully cap the leak.

Already, however, the spill is worse than the Exxon Valdez, and will cause enormous and very costly destruction to the shrimping, fishing and tourism industries along the Gulf Coast of Louisiana and Florida. It will be years before good estimates on the number of dead fish, turtles, birds and other animals can be made.

The Backup Plan

If the blowout preventer can’t be triggered, the backup plan is…
continue reading





Oil Spill: How Bad?

Courtesy of George Washington

Washington’s Blog

The Gulf oil spill is much worse than originally believed.

As the Christian Science Monitor writes:

It’s now likely that the actual amount of the oil spill dwarfs the Coast Guard’s figure of 5,000 barrels, or 210,000 gallons, a day.

Independent scientists estimate that the renegade wellhead at the bottom of the Gulf could be spewing up to 25,000 barrels a day. If chokeholds on the riser pipe break down further, up to 50,000 barrels a day could be released, according to a National Oceanic and Atmospheric Administration memo obtained by the Mobile, Ala., Press-Register.

Indeed, CNN quotes the lead government official responding to the spill – the commandant of the Coast Guard, Admiral Thad Allen – as stating:

If we lost a total well head, it could be 100,000 barrels or more a day.

Best-Case Scenario

The oil company running the oil drilling rig – BP – is trying to perform a difficult task of capping the leak by using robotic submarines to trigger a “blowout preventer” 5,000 feet below the surface of the ocean.

If successful, the leak could be stopped any day. Everyone is rooting for the engineers, so that they may successfully cap the leak.

Already, however, the spill is worse than the Exxon Valdez, and will cause enormous and very costly destruction to the shrimping, fishing and tourism industries along the Gulf Coast of Louisiana and Florida. It will be years before good estimates on the number of dead fish, turtles, birds and other animals can be made.

Worst-Case Scenario

As the Associated Press notes:

Experts warned that an uncontrolled gusher could create a nightmare scenario if the Gulf Stream carries it toward the Atlantic.

This would, in fact, be very bad, as it would carry oil far up the Eastern seaboard.

Specifically, as the red arrows at the left of the following drawing show, the Gulf Stream runs from Florida up the Eastern Coast of the United States:


[Click here for full image.]

In a worst-case scenario – if the oil leak continued for a very long period of time – the oil could conceivably be carried from…
continue reading





Full, Unabridged And Totally Hilarious G-Pap Speech To Cabinet

Courtesy of Tyler Durden

“Ladies and Gentlemen, I have convened this Cabinet today to an historic meeting. All the citizens of Greece feel the crucial nature of these moments and the burden of historical responsibility. Avoiding bankruptcy is a red line for the Nation.

“I would like to make it absolutely clear to everybody — I have done and will always do whatever it takes for the country not to go bankrupt. We are waging together a difficult and relentless battle dealing with the problems — the dimensions of which one could never have imagined. It is true, we were the first to speak of the crisis — a crisis of politics, a crisis of institutions, a crisis of values which in turn led to the huge economic crisis. “No citizen of Greece could however ever have imagined the size of the debt and the deficit which the former government had caused and hid upon its exit. This is not the time for accusations, however. The people of Greece are fully aware of where they lie. The consequences however are manifold.

“First of all, the lack of trust that Greek citizens have in their institutions and the present political system, the lack of credibility of our political system is so great that citizens even show distrust to us and to this government. From the first day however I personally and all of us here have fought battle after battle trying to finally make those profound changes and create a society where justice prevails, where the money of the Greek people is put to good use and where the democratic state protects the rights of its citizens.

“For the first time in years a government is working with such dedication to the task assigned to it by the citizens of this country.

“In all sincerity, we are a different government. Despite this long battle with the crisis of debt and lending, day by day, we are
making small and even greater reforms to a system which did not serve the interests of this country.

“This is something we will continue to do ceaselessly as we round the cape of economic crisis in order not to find ourselves in this situation again. “Our first concern was to regain credibility with our citizens. We have been honest from the…
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Investor Sentiment: Time To Pay Attention!

Courtesy of thetechnicaltake

After 8 months of indifference to the constant and persistent rise in stock prices, the "smart money" has finally turned bearish. It is time to pay attention.

The "Smart Money" indicator is shown in figure 1. The "smart money indicator is a composite of the following data: 1) public to specialist short ratio; 2) specialist short to total short ratio; 3) SP100 option traders. The "Smart Money" indicator is has turned bearish for the first time since January, 2009.


Figure 1. "Smart Money" Indicator/ weekly

*****

The "Dumb Money" indicator (see figure 2) looks for extremes in the data from 4 different groups of investors who historically have been wrong on the market: 1) Investor Intelligence; 2) Market Vane; 3) American Association of Individual Investors; and 4) the put call ratio. The "Dumb Money" indicator is bullish to an extreme degree, and this implies that a price move is either nearing its end or the ascent of prices is surely to show. This is our expectation 85% of the time.

Figure 2. "Dumb Money" Indicator/ weekly
*****

Figure 3 is a weekly chart of the S&P500 with the InsiderScore "entire market" value in the lower panel. From the InsiderScore weekly report we get the following: "early signals indicate that insiders are not going to deviate from the path they’ve taken over the past year".

Figure 3. InsiderScore/ weekly "entire market" value
*****

Figure 4 is a weekly chart of the S&P500. The indicator in the lower panel measures all the assets in the Rydex bullish oriented equity funds divided by the sum of assets in the bullish oriented equity funds plus the assets in the bearish oriented equity funds. When the indicator is green, the value is low and there is fear in the market; this is where market bottoms are forged. When the indicator is red, there is complacency in the market. There are too many bulls and this is when market advances stall.

Currently, the value of the indicator is 67.14%. Values greater than 58% (arbitrarily chosen) are associated with market tops, and the red dots over the price bars indicate such.


Figure 4. Rydex Total Bull v. Total Bear/ weekly
*****
Shorter term Rydex measures showed excessive bullishness (i.e, not seen since 2004) earlier in the week.


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Greece Bailed Out To Get In Even More Debt

Courtesy of Tyler Durden

Does anyone have a problem with the attached chart?

Ignore for a second the sheer lunacy of anyone who thinks that the Greek government can grow GDP and decline the budget deficit in a straight line now that the country will see crippling strikes and rolling riots (not to mention blackouts) on a daily basis. But do note the black line, which shows the projected Debt/GDP ratio for the country as part of the bailout package. In essence Greece will go from having “only” a 133% Debt/GDP ratio to an insane 149% in 2013 before presumably dropping to 144% lower in 2014, still a good 11% higher than currently. Greece just got bailed out so it can get into even more debt! What psychopath of the Keynesian school thinks that this unbelievable trajectory is anything but a complete and utter waste of money? German, and US taxpayers, are merely giving Greece money so it can increase it debtor status with French and a few other European banks. To say that this is a viable solution is something that only those who bow at the altar of Alan Greenspan can do.





 
 
 

Zero Hedge

Will Bitcoin Mining Consume All The World's Current Electricity Production By Feb 2020?

Courtesy of ZeroHedge. View original post here.

Via PowerCompare.co.uk,

Bitcoin’s ongoing meteoric price rise has received the bulk of recent press attention with a lot of discussion around whether or not it’s a bubble waiting to burst.

However, most the coverage has missed out one of the more interesting and unintended consequences of this price increase. That is the surge in global electricity consumption used to “mine” more Bitcoins.

How ...

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Phil's Favorites

Bitcoin & Fiat Paper Dollars

Courtesy of Zero Hedge

By Chris Whalen

This past week on Bloomberg Television, I referred to bitcoin as "a fraud decorated with technology." The fraud comes about because the exchange of a fiat legal dollar for a token, to use the kind description adopted by the Securities and Exchange Commission, seems unfair and frankly incomplete. But since the dollar itself is a product of government fiat, the subject seems open to debate.

The fact that a growing crowd of people have decided to speculate in this modern day version of tulip bulbs does not alter the unfairness of the exchange.  Our friend Jim Rickards recently squared off against four bitcoi...



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Digital Currencies

Bitcoin & Fiat Paper Dollars

Courtesy of Zero Hedge

By Chris Whalen

This past week on Bloomberg Television, I referred to bitcoin as "a fraud decorated with technology." The fraud comes about because the exchange of a fiat legal dollar for a token, to use the kind description adopted by the Securities and Exchange Commission, seems unfair and frankly incomplete. But since the dollar itself is a product of government fiat, the subject seems open to debate.

The fact that a growing crowd of people have decided to speculate in this modern day version of tulip bulbs does not alter the unfairness of the exchange.  Our friend Jim Rickards recently squared off against four bitcoi...



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Chart School

Happy Thanksgiving :) Friday Should Be A Winner

Courtesy of Declan

Thanksgiving Wednesday was never going to generate an exciting day but it was good to see early week gains retained. Upcoming Thanksgiving Friday is typically a day when Junior traders go wild and decent gains are posted - even if trading volume is light. With last week's lead action I wouldn't be surprised if this pattern was to repeat.

Tech Indices have been leading the charge in recent days and I would look to the Nasdaq and Nasdaq 100 to be the primary chargers on Friday. Technicals are firmly in the green.

The Nasda...



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Insider Scoop

8 Stocks To Watch For November 22, 2017

Courtesy of Benzinga.

Related CRM 9 Stock's Moving In Tuesday's After Hours Session Salesforce Falls Despite Q3 Beat The Vetr co...

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Biotech

The two obstacles that are holding back Alzheimer's research

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

 

The two obstacles that are holding back Alzheimer's research

Courtesy of Todd GoldeUniversity of Florida

Family members often become primary caregivers for loved ones with Alzheimer’s disease. tonkid/Shutterstock.com

Thirty years ago, scientists began to unlock the mysteries regarding the cause of Alzheimer’...



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ValueWalk

Robert Mugabe Under House Arrest, Military Takes Control Of Zimbabwe

By Andjela Radmilac. Originally published at ValueWalk.

Zimbabwe’s head of state, 93-year-old Robert Mugabe, has been placed under house arrest after what seems to be a military coup took place in the nation’s capital.

By U.S. Navy photo by Mass Communication Specialist 2nd Class Jesse B. Awalt/Released [Public domain], via Wikimedia CommonsRobert Mugabe is safe

Following numerous reports on social media late Thursday night about the increased military presence in Harare, the capital of Zimbabwe, the country’s military took...



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Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...



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Mapping The Market

Puts things in perspective

Courtesy of Jean-Luc

Puts things in perspective:

The circles don't look to be to scale much!

...

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OpTrader

Swing trading portfolio - week of September 11th, 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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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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FeedTheBull - Top Stock market and Finance Sites



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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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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