Archive for 2011

Oxen Group EquityAnalytics – Application Software

Wolfgang Munchau On How The Greek Rollover “Deal” Is A Toxic CDO

Courtesy of Tyler Durden

A week ago, Zero Hedge penned “An MLEC In PIIGS’ Clothing: The Latest Greek Bailout Proposal Picks Up Where the Super SIV Failed” in which we explained how the current fatally flawed proposal for a Greek bailout is nothing more than a structured vehicle, expected to remain off the books, and much more importantly, expected to not trigger rating agency ire, and kill the entire extend and pretend game: remember – an Event of Default by a rating agency, even a Technical one (completely irrelevant of what ISDA does with Greek CDS) means game over for the European Central Bank and its €2 trillion in “assets”, not to mention the western financial system. Now, a week later, the FT’s own Wolfgang Munchau explains why our observation of how toxic the “bailout plan” is was rather accurate: “This structure is still not quite so complex as some of the more elaborate CDOs we have encountered in the global financial crisis. If you take some time to work through the arrows and boxes, you see relatively quickly that this complex structure is not a private sector participation at all. Rather it is a private sector bail-out… I have no space for a large drawing with lots of boxes and arrows to explain the complexity of the vehicle, through which eurozone governments want to involve the private-sector banks in its next loan package.” Munchau’s conclusion: “If this was any other field of human activity, you would go to jail if you accepted, let alone made such an indecent offer.” On the other hand, all is fair in love and perpetuating the ponzi Status QuoTM. Our follow-on observation that “The two things that are keeping the Eurozone afloat: an SPV and a CDO” alas appears also to be rather in line. And before the entire financial system collapses upon itself like a cheap lawnchair, this will be fondly remembered as one of the more prudent “rescue” mechanisms enacted to delay the inevitable.

And inevitable it is:

It is also inevitable that Greece will default on its coupon payment at some point. The interest will be 8 per cent under a benign growth scenario, and 5.5 per cent under a not so benign one. Either way, Greece cannot pay such a high level of interest.

Here is how…
continue reading

Goodbye Rare Earth Minerals, Hello Not So Rare Underwater Minerals: Vast ___ Oxide Deposit Discovered In Pacific Seabed

Courtesy of Tyler Durden

Two weeks ago we demonstrated what happens to prices of so-called “rare” earth minerals, which are almost exclusively controlled by China, and whose exports China recently decided to cut to a mere trickle, resulting in a 10+ fold increase in some of the most rare minerals in under a month. It also has allowed the third R bubble to persist as long as it has. It appears that the bubble is about to pop big time. According to Nikkei, “Vast deposits of rare earth minerals have been discovered on the seabed of the Pacific Ocean amounting to 1,000 times those on land, media reported on Monday citing a study by Japanese researchers.” Of course, this could merely be one of those not quite definitive discoveries, which end up being disproven eventually, but which serve to merely pop a temporary speculative bubble. Just like the IEA. In the meantime, it may be time to temporarily erase the Rare from Rare Earth Minerals, and change Earth to Underwater.

Reuters has more:

The deposits are estimated to amount to 100 billion metric tons, the Nikkei business daily said.

They are believed to lie at a depth of 3,500 to 6,000 meters and cover an area of over 11 million square meters, the reports said.

China, which produces 97 percent of global rare earth supplies, has been tightening trade in the strategic metal, which is used in high-tech electronics, magnets and batteries, causing concerns globally about supply and triggering jumps in prices.

The study by researchers from the University of Tokyo and the Japan Agency for Marine-Earth Science and Technology is to be published on Monday in the online edition of the British science magazine Nature Geoscience, the reports said.

Japan’s imports of rare earths from China fell 3 percent in May from April, the first month-on-month drop in three months, as the price of the metal surged, Japan’s finance ministry said last month.

Demand could pick up later in the year as Japan continues to recover from the March 11 earthquake.

To those who say that this is very much like the US announcing there has been a record discovery of crude oil under the Marriner Eccles building, we would say you are spot on. But then again for the Japanese “recovery” scenario to proceed as expected,…
continue reading

June Light Vehicle Sales SAAR Drops To 10 Months Low, Upside Economic Case In Question

Courtesy of Tyler Durden

As is by now well known, when it comes to upside theories debunking the bearish “economic contraction” case, there are two core arguments: a Japanese pick up, and a surge in automotive production and sales. And following a jump in Japanese industrial production last week, there was a brief consensus that the soft spot as a result of the earthquake and tsunami have been overcome. Until the subsequent Tankan confidence index release, that is. And in the meantime, nobody can still explain how the economy is expected to return to trendline if peak electric consumption can not be met by a crippled electrical infrastructure. Which leaves auto production, and the latest iteration of inventory restocking. Zero Hedge already discussed the glaring split in inventory data between the Chicago PMI and the Manufacturing ISM, which as Goldman noted previously is a major wildcard in determining future GDP growth. Perhaps David Rosenberg said it best in his Friday Breakfast with Dave: “While there is no doubt that we will see an inventory boost from a revamping of auto production in the coming quarter, what will be critical is whether final sales will hold up. So far in June, chain store sales are running below plan. Auto sales, however, are the real wild card and could hold the key as to whether we are, in fact, at an inflection point. Go back to August 2007 and they put in an interim peak of 16.3 million annualized units. They bottomed for good in February 2009 at 9.2 million units. Then they hit a nearby high of 11.7 million units in March of last year just ahead of the market downturn and “double dip” concerns, only to then trough at 11.5 million in August 2010 just as the market was ready to rip. And then, in February of this year, sales peaked at 13.4 million in February. The May number was 11.8 million – and today we get June. Stay tuned.” Consensus was for a significant rise to 12.0 million in June. The actual number was 11.45 million. The lowest since August 2010. So much for an inflection point (not to mention that all of this ignores the record channel stuffing in post-reorg GM).

Here is how the June “end of the soft spot” appears in chart form.

Goldman’s Brian Jacoby who was among…
continue reading

50 U.S. Health Care Statistics That Will Absolutely Astonish You

Courtesy of Michael Snyder of Economic Collapse

The U.S. health care system has become one gigantic money making scam, and you are about to see the statistics that prove it.  Today, the United States spends more on health care per person than any other country in the world by far.  The health insurance companies and the big pharmaceutical corporations are raking in gigantic mountains of cash and yet the quality of the health care that we receive in return is rather quite poor.  People living in Puerto Rico have a greater life expectancy than we do.  Residents of Cuba have a lower infant mortality rate than we do.  We are the most medicated population on the planet and yet we are also one of the sickest.  If the U.S. health care system was a country, it would have the 6th largest economy on the globe and yet rates of cancer, heart disease and diabetes continue to increase.  The U.S. health care statistics that you are about to read below are absolutely stunning.  For as much money as we shell out for health care, we should have the greatest system in the entire world.  But we don’t.  Something has gone horribly wrong.

As you read this, there are hordes of health bureaucrats and greedy corporate fatcats that are becoming incredibly wealthy while the rest of us go broke trying to pay for our health care.  In the United States today, health care bills cause more bankruptcies than anything else does.  Millions of Americans are afraid to go to the hospital because they know that even a short visit would be a huge financial burden.

Sadly, our politicians in Washington D.C. continue to make the problem worse.  Obamacare was one of the worst pieces of legislation that anyone has ever come up with in the history of the United States.  You could put a thousand monkeys in a room with a thousand typewriters for a thousand years and they wouldn’t come up with anything as bad as Obamacare.  Rather than doing something to address the abuses of the health insurance companies and the pharmaceutical corporations, Obamacare actually gives them more power.  In fact, huge portions of Obamacare are virtually identical to a bill that was written by the health insurance trade association in 2009.  Under Obamacare our health care costs will go up even faster and the quality of our health…
continue reading

Here’s What’s In Gary Shilling’s Huge Guide To The Coming Collapse In China

Courtesy of Joe Weisenthal at The Business Insider

Investor Gary Shilling is a China bear (like many others) and he just wrapped up a 5-part series for Bloomberg on why the country is zooming towards an inevitable hard landing.

In it he takes a wide-ranging look at the country, examining its growth strategy, its demographic problems, and its failures in economic planing.

We read through the piece, and plucked out the key points.

Decoupling is a myth: China is still highly dependent on the US consumer.

China won’t easily flourish if there’s a hiccup in the west.

Source: Bloomberg: Shilling: China Heading For A Hard Landing, Parts 1-5


US total GDP of $14.3 trillion is still 3x that of China’s

US total GDP of $14.3 trillion is still 3x that of China's

Meanwhile, US GDP per capital is over 12x China.

To close that gap in 30 years would require 3 decades of 10% growth.

Source: Bloomberg: Shilling: China Heading For A Hard Landing, Parts 1-5


The country’s inexhaustible supply of cheap labor will peak as soon as 2014

The country's inexhaustible supply of cheap labor will peak as soon as 2014

Image: Screenshot

Thanks to the country’s one-child policy (now relaxes), it’s already running into demographic problems.

Another fact about Demographics: "As the Chinese population ages, the ratio of retirees to working-age people is forecast to rise from 39 percent last year to 46 percent in 2025."

Source: Bloomberg: Shilling: China Heading For A Hard Landing, Parts 1-5


Wages are already rising

Wages are already rising

More and more countries are moving form China to Vietnam or Pakistan.

Source: Bloomberg: Shilling: China Heading For A Hard Landing, Parts 1-5


Inflation is already crippling

In Beijing, only the top 20% of income earners can afford to buy a house.

Source: Bloomberg: Shilling: China Heading For A Hard Landing, Parts 1-5


Meanwhile, the government has uncovered a huge volume of bank loans that were illegally funneled into property investments

Meanwhile, the government has uncovered a huge volume of bank loans that were illegally funneled into property investments

Image: AP Images

When the property bubble bursts, watch out.

Source: Bloomberg: Shilling: China Heading For A Hard Landing, Parts 1-5


Signs of cooling are already clear

Signs of cooling are already clear

The latest HSBC

continue reading

A Look At Events In The Week Ahead: Less Headline Risk, More ECB Rate Hikes

Courtesy of Tyler Durden

From Goldman Sachs

Last week was a good week for risk sentiment with almost all of the major hurdles taken successfully. The Greek Parliament voted in favour of the reform package as well as the implementation laws. The Eurozone has already approved the disbursement of the 5th tranche of the initial support package and the IMF is likely to follow with approval. On the activity side, the Chicago PMI and the Manufacturing ISM all came out much stronger than expected. Not every single news item was positive though. The composition of the ISM showed a big rise in the inventory component. Moreover, a number of regional business surveys from Europe, China, and the Japanese Tankan all failed to show the improvements visible in the US data. The Turkish trade deficit remained shockingly wide.

Still, against the backdrop of improving US data and the Greek votes, risky assets performed well across the board. In the middle of the week, we added more pro-cyclical risk via a long AUD/JPY recommendation, as well as short position in 5-year Treasuries and a long recommendation in our GS Wavefront Growth basket. Our FX recommendations generally performed well in this environment, with the Dollar TWI declining by about 1.5% in the second half of the week. As one of our core views we expect more USD weakness and we remain positioned via a number of Asian and European crosses (short USD versus CNY, PHP, MYR, EUR, NOK).

In the week ahead, we are waiting for the second batch of key activity data in the form of service sector and non-manufacturing surveys, as well as US payrolls. The Chinese non-manufacturing PMI has already been released over the weekend, showing a decline from 61.9 to 57.0.

After last week’s key votes in Greece, headline risk should decline though we are now entering the phase where the final negotiations for the second support package take place. The updated funding strategy for Greece will likely be unveiled by Eurozone Finance Ministers on July 11.

There will be central bank meetings by the ECB (+25bp), BOE (on hold), in Malaysia (+25bp), Mexico (on hold), and Poland (on hold).

Monday 4 July

Turkey CPI (June): Given the huge imbalances in Turkey currently and strong demand growth, inflation will likely remain relatively high. Consensus expects +7.0% yoy after +7.2% in May.

UK Construction PMI (June): Last month’s…
continue reading

Sean Corrigan’s Commodities Corner

Courtesy of Tyler Durden

From Sean Corrigan of Diapason Securities

Commodities Corner

Regular readers may be aware that two of the author’s greatest bugbears are Malthusianism and mindlessly mathematical macroeconomics.

The two of these come into no sharper focus than when we turn to the hoary old canard of ‘Peak Oil’, especially when it cites the work of those two past masters of wrongly–applied ratiocination, Hubbert and Hotelling.

The former we have recently dealt with already, so let us say a few words about the latter—a gentlemen who was a statistician, not an economist, in an era when there was still an honourable degree of separation between the two disciplines (ironically, he was also, at one time, Murray Rothbard’s professor at Columbia before the latter had a self?declared ‘epiphany’ regarding the flimsy epistemological grounds upon which much statistics lies and quit the course forthwith).

The better to set the scene, let us first note that those who think of themselves as ‘resource economists’ all seem to think of their subject as if they were describing an Easter egg hunt.

In this, an explicitly determine number of eggs are scattered about over a given territory and the seekers are then sent off to find them. Once found and eaten, they can never be replaced. I’m sorry, boys and girls, but the fun’s over and it’s back to spinach and cauliflower from here on in.

From this gross misrepresentation of what John Bratland has tellingly called the entrepreneurial business of ‘resourcing’, the RE crowd then  concocts a mathematically neat, but practically irrelevant, analysis of which the founding tenet was the so?called ‘Hotelling Rule.’

Pondering the question of how one should price a non?renewable stock of a good, Hotelling arrived at the pseudo?rigorous and partly tautologous conclusion that its price should ascend continuously at the rate of interest (by which he really meant the general rate of profit achievable in all  other fields of endeavour), a result which implied that the NPV of the sale proceeds would not only equal the product of the cash price times the stock, but that—and this both an eco?alarmist’s and an asset?pusher’s dream—that the price would mount exponentially along the way to its final and utter exhaustion.

This, however, begs so many questions it is at risk of being arrested for intellectual vagrancy.

Among the many shortfalls displayed by this essentially static schema, it assumes…
continue reading

World Markets in Review: Huge Rallies to Close the Quarter

Courtesy of Doug Short

Major world markets rallied again last week, with most making exceptional gains to close the second quarter and start the new month. The S&P 500 and FTSE 100 were both up more than 5%, the DAX more than 4%, and the SENSEX gained almost 3% on top of its 2% rally the previous week. The Nikkei and Hang Seng also recorded strong back-to-back weekly gains. The laggard Shanghai also finished in the green, up half a percent, following a nearly 4% gain the week before.

The tables below provide a concise overview of performance comparisons over the past four weeks for these seven major indexes. I’ve also included the average for each week so that we can evaluate the performance of a specific index relative to the overall mean. The colors for each index name help us trace the comparative performance over time.


The chart below illustrates the comparative performance of World Markets since March 9, 2009. The start date is arbitrary: The S&P 500 and BSE SENSEX hit their lows on March 9th, the Nikkei 225 on March 10th, the DAX on March 6th, the FTSE on March 3rd, the Shanghai Composite on November 4, 2008, and the Hang Seng even earlier on October 27, 2008. However, by aligning on the same day and measuring the percent change, we get a better sense of the relative performance than if we align the lows.



A Longer Look Back

Here is the same chart starting from the turn of 21st century. The relative over-performance of the emerging markets (Shanghai, Mumbai, Hang Seng) is readily apparent.



Check back next weekend for a new update.










Phil's Favorites

Kansas Ends Bad Economic News by Not Reporting It

The "ostrich approach" to measuring real-life results of important economic policy experiments is to deny they exist. The problem with that is even failed experiments provide a lot of information. For instance, consider Kansas. 


more from Ilene


Timely (Free) Advice

By BroyHill. Originally published at ValueWalk.

This wonderful advice from Fred Schwed was originally published in 1940 – some things never change.

“When there is a stock-market boom, and everyone is scrambling for common stocks, take all your common stocks and sell them. Take the proceeds and buy conservative bonds. No doubt the stocks you sold will go higher. Pay no attention to this – just wait for the depression which will come sooner or later. When this depression – or panic – becomes a national catastrophe, sell out the bonds (perhaps at a loss) and buy back the stocks. No doubt the stocks will go lower still. Again pay no attention. Wait for the next boom. Continue to repeat this operation as long as you live, and you’ll have the pleasure of dying rich”.


more from ValueWalk

Zero Hedge

Are You Ready?

Courtesy of ZeroHedge. View original post here.

Presented with no comment...



more from Tyler

Kimble Charting Solutions

U.S. Dollar Rally: A tale of two chart patterns

Courtesy of Chris Kimble.

This article was originally written for See It Market.

The U.S. Dollar Index has been trading in a wide consolidation pattern over the last 18 months or so.  But after the recent U.S. Dollar rally, that consolidation has formed two distinct chart patterns.

And as you may have guessed… one is bullish while the other is bearish.



more from Kimble C.S.

Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

Oil Rises as OPEC Chief Barkindo Seeks to Resolve Output Plan (Bloomberg)

Crude advanced as OPEC’s secretary-general was due to visit Baghdad on Tuesday for talks aimed at resolving a deal on output after Iraq said it should be exempt from planned cuts.

Iron Ore Hoisted on Coat-Tails of Coal’s Record Rally in China (Bloomberg)

Iron ore is surging thanks to its bulk-commodity compatriot, coal. Iron ore futures in Singapore ad...

more from Paul

Chart School

RTT browsing latest..

Courtesy of Read the Ticker.

Please review a collection of WWW browsing results.

Date Found: Sunday, 10 April 2016, 01:58:50 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: Pay attention : www.thefelderrepo...

Date Found: Monday, 11 April 2016, 03:52:28 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: RTT: Who owns the SP500?

Date Found: Monday, 11 April 2016, 03:53:00 PM...

more from Chart School


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 ...

more from OpTrader

Members' Corner

World Series 2016

Courtesy of Nattering Naybob.

The good news... Waiting since 1945, after 71 years, the Chicago Cubs have a chance to win their first WS since 1908.  The bad news... The Cubs face an Indian's team that has been waiting since 1948 to win a WS and last appeared in 1997.

CLE swept BOS, and took out TOR who had swept TEX, and has only lost ONE post season game.  That being Game 4 ALCS at TO, yet, during that series, no Indians starting pitcher made it through more than six innings. 

In fact, Trevor Bauer, only lasted two outs during his one start, leaving Merritt and the pen to bear the burden of over eight innings of baseball.  Mid range reliever Merritt notched a victory in that game with ERA 1.80; WHIP 0.60 with 5 IP. 

What does all that tell you? Oddly enough, without Carr...

more from Our Members

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...

more from M.T.M.

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.


more from Bitcoin


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...

more from Biotech

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...

more from David


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, ...

more from Promotions

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...

Learn more About Phil >>

As Seen On:

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.

Market Shadows >>