Archive for 2011

The Sun Chairman, What’s Future Is Prologue, And Why The Second French Revolution Is Coming To America

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

For our closing post of the day we once open the floor to Sean Corrigan who proves that just when we thought all historical comparisons to the current deplorable economic miasma have been used up, a new one springs up, this time perhaps the one most indicative not so much of the past but of the future. Indeed, if history is any indication, and it is, America’s catastrophic and untenable position is worse than even that of one Louis XIV, better known as “The Sun King”, whose rule set the stage for the downfall of the French monarchy and which ultimately culminated with the French Revolution of 1789. For arguably the best indication of historical parallels to the present, and yet another confirmation that there really is nothing new in this world, especially in the world of central planning of monetary affairs, we present the following summary of the practices of Louis XIV which is verbatim applicable to the actions of the current central planning cartel: “The administration of the finances appears to have practised a subtle and ingenious tactic… [and] by modifications in the monetary unit, attempted to influence economic phenomena. Changes… were made to prepare for the issue of loans or to audit the circulation of the treasury notes, or to regulate exchange, to modify the balance of trade… to effect a redistribution of wealth, to influence the price level of commodities, perhaps to attenuate economic crises and famines…

It may come as a surprise to some that the very same type of central planning that Bernanke, and his central banking brethren, are trying to inflict (and failing) upon the world, was the same that was attempted on so many occasions in history, most poignantly, and catastrophically in the late stages of the French monarchy. Needless to say the attempts by one man to control a far simpler French economy well over two centuries ago failed, yet ironically, not even then did the economy reach our current level of collapse. Which begs the question: how long until our own “Sun Chairman” finally forces the hundreds of millions of great unwashed out of their hypnotic trance following the realization that their “equity” in the great American experiment, their pensions, lifetime accrued benefits, retirement funds, and of course savings, have been completely wiped out, and…
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Guest Post: Bernanke Pledges To Screw Your Grandmother For At Least Two More Years

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Jim Quinn of The Burning Platform

Bernanke Pledges To Screw Your Grandmother For At Least Two More Years

“A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank.” - Ron Paul


I wonder what goes through Ben Bernanke’s mind as he sits in his gold plated boardroom in the majestic Marriner Eccles building in Washington DC and decides to screw grandmothers in order to further enrich Wall Street bankers. He just pledged to keep interest rates at zero percent for two more years. Ben is a supposedly book smart man. Does he have no guilt or shame for what he has wrought? How does he sleep at night knowing he has created bloody revolutions around the globe due to his inflationary zero interest policy? People are dying because he has decided that an elite group of Wall Street bankers who recklessly brought down the worldwide financial system in 2008 deserve to be kept alive and enriched at the expense of the many.

He uses words like transitory to describe inflation. Even as the price of gold reveals his lies he continues to promote policies that will lead to the demise of the USD and our economic system. There is only one way to counter his lies – truth. With a corporate fascist government run by the few for the benefit of the few, telling the truth is treason as stated by Ron Paul:

“Truth is treason in the empire of lies.”

The storyline being sold to you by Bernanke, his Wall Street masters, and their captured puppets in Washington DC is that deflation is the great bogeyman they must slay. They make these statements from their ivory jewel encrusted towers as the real people in the real world deal with reality. The reality since Ben Bernanke announced his QE2 policy in August 2010 is:

  • Unleaded gas prices are up 45%.
  • Heating oil prices are up 46%.
  • Corn prices are up 71%.
  • Soybean prices are up 26%.
  • Rice prices are up 13%.
  • Pork prices are up 31%.
  • Beef prices are up 25%.
  • Coffee prices are up 38%.
  • Sugar prices are up

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Yahoo! Moving Higher on Business Insider Blog Post

Courtesy of Benzinga.

Time Warner Cable (TWC) is in talks to purchase Carlyle Group’s Insight Communications for about $3 billion, according to Bloomberg sources. A deal could be announced as early as Monday.

New York based Insight is the ninth-largest U.S. cable operator, with 680,000 customers in Kentucky, Indiana, and Ohio. Carlyle took Insight private in 2005.

Time Warner Cable Close to $3B Deal for Insight Communications -Bloomberg

Courtesy of Benzinga.

Time Warner Cable (TWC) is in talks to purchase Carlyle Group’s Insight Communications for about $3 billion, according to Bloomberg sources. A deal could be announced as early as Monday.

New York based Insight is the ninth-largest U.S. cable operator, with 680,000 customers in Kentucky, Indiana, and Ohio. Carlyle took Insight private in 2005.

At 50x Leverage And 2% Tier 1 Capital, Is SocGen Truly A Paragon Of Balance Sheet Invincibility?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The fact that European banks have just a tad more leverage compared to their US cousins has been well-known for quite some time. One need merely to look at the chart from our February 2010 post to see how American financial institutions stack up relative to European ones as a %-age of host country GDP. This issue came to a very violent head last week when market participants finally realized the painfully obvous, namely that even without direct Greek exposure (and there certainly is a lot of that), SocGen is simply not a viable business model for the long-run courtesy precisely of its tremendous leverage. And unfortunately, while SocGen’s CEO was quick to appear on any TV station that would have him and deny rumors of the bank’s viability, he had little if anything to say about the bank’s actual solvency and leverage. Alas, therein lies the rub. As the attached table created by Jean-Piette Chevalier demonstrates, SocGen is back at the leverage it had back in 2007 at just over 50x. As a reminder, not even Lehman was this bad when it blew up (and that excludes the beneficial boost from Repo 105). In other words, SocGen has a Tier ratio of 2.0%… a number which the bureaucrats at Basel will have no choice but tell the bank must go up. And go up it will… assuming SocGen can issue €84 billion in new capital to pad its equity (on €19 billion of market cap… mmhmmm). Of course, in order to raise capital, SocGen would have to admit that the market was, in fact, correct in its assessment that the bank was undercapitalized, which would then send the stock even lower, and so forth, chicken or egg style. While we doubt any of this is new to the market, we doubt the response will be one of buying euphoria. Luckily, the only thing that can send the price tumbling now is actual selling, as opposed to shorting. And as we all know, nobody could possibly sell stocks: after all it is simply the evil shorters who are responsible for every market collapse in history, never the long idiot money which never did its homework, and suddenly becomes the last bagholder standing and first to bail from what is obviously a disastrously…
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Eurobonds Ruled Out; Eurobong Still In Play

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Not even minutes after we finished ridiculing Springer/Die Welt‘s attempt at propaganda spin whereby eurobonds were actually presented as not only good for Germany, but about to be “instituted” (and fully expected the immediate response to be one of refutation via official channels), here comes the FT with the official denial: “Germany and France are ruling out common eurozone bonds to solve the bloc’s current debt crisis, in spite of renewed pressure ahead of a meeting of chancellor Angela Merkel and president Nicholas Sarkozy on Tuesday. Wolfgang Schäuble, German finance minister, made clear in an interview with Der Spiegel, that Berlin remains opposed to such a policy. “I rule out eurobonds for as long as member states conduct their own financial policies and we need different rates of interest in order that there are possible incentives and sanctions to enforce fiscal solidity,” he said. So, uh, Die Welt’s prognostication that “The federal government is now willing, if necessary, to accept a Eurobond transfer union” is about, oh, 100% wrong? Oops. As for those expecting an announcement of a eurobond on Tuesday following the latest round of “emergency” Merkel-Sarkozy, we suggest you put down the Eurobong: “Senior French officials also played down speculation that any firm announcement on jointly issued bonds would be issued after meetings when Ms Merkel comes to Paris on Tuesday. “Eurobonds would require a much more determined integration of budgetary policy,” one said. “We do not have that today. It could be a long-term project, but you cannot have eurobonds and at the same time national economic and budgetary policies.” Translation: “there is this thing called elections coming, and some of us career politicians, who have no idea how to do anything actually valuable for society, and still have not plundered enough in the form of bribers, pardon, lobby money, are not insane enough to propose that German and France foot the bill for the entire European bailout.” Even though that is precisely what they will do via the EFSF. And we certainly expect yet another round of eurobond rumors the next time the EURUSD tumbles by 200 pips in the span of 10 minutes (which courtesy of the broken FX market as described by Sean Corrigan earlier, is roughly every several hours).

More from the FT:

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The Four Bad Bears: Another Update

Courtesy of Doug Short.

During the Great Financial Crisis, I updated this chart series on a daily basis. I retired it over a year ago but have posted occasional updates on request. With the market selloff of the past few weeks, I continue to receive frequent requests for updates.

So, here again are the Four Bad Bears.



Since inflation is a favorite topic on this website, I’ve also updated a set of charts to facilitate a comparison of the nominal and real declines. See also my logarithmic scale view of the “Four Bad Bears” comparison.

For charts of S&P 500 bear market and recoveries since 1950, see this series.



For a better sense of how these cycles figure into a larger historical context, here’s a long-term view of secular bull and bear markets, adjusted for inflation, in the S&P Composite since 1871.

For a bit of international flavor, here’s a chart series that includes the so-called L-shaped “recovery” of the Nikkei 225. I update these weekly.

These charts are not intended as a forecast but rather as a way to study the current market in relation to historic market cycles.





Guest Post: The Market From The Eyes Of An 8 Year Old

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

From Peter Tchir of TF Capital Markets

The Market From The Eyes Of An 8 Year Old

After two incredibly volatile weeks, where more Americans now know the ticker symbol for Gold (GLD) than its Periodic Table Symbol (AU), I’m just not sure what to write.  Trying to make sense of it all is hard enough, and by this time on a Sunday, what hasn’t already been written?  I guess I could have tried to write something title “Circular reasoning and cognitive dissidence in the markets” , but that seemed fairly complex.  Instead, maybe looking at the past couple of weeks through the eyes of a child, is a better idea. 

Son:  Dad, do you FINALLY have time to go fishing?

Me:  Sure, sorry about this week, but it’s been just crazy in the markets.

Son: Sure, but you always say that.

Me:  No, really, it has been crazy ever since the debt ceiling weekend.

Son:  Debt ceiling weekend? /raises eyebrows/  What is a debt ceiling?

Me:  It is a limit on how much the government can borrow, and the market was really concerned about it.

Son:  Ah, the market was worried we were borrowing too much?

Me:  No, that we couldn’t borrow more to pay our debts.

Son:  How is borrowing more the same as paying debts?

Me:  It’s complicated, but we needed to borrow more or else we might have been downgraded.

Son:  What’s a downgrade?

Me:  Its something the rating agencies do, you don’t need to worry about it, since its complicated.  But anyways we raised the limit and could borrow more, so everyone should have been happy.

Son:  Don’t you tell me to save and not borrow?  That borrowing for stuff you don’t need is bad.

Me:  Well, yes, but some people think that it’s different for governments than people or families.

Son:  But why is it good for me to save, but bad for the government to save?

Me:  You wouldn’t understand.

Son:  Okay, so what happened.

Me:  Well, one of the rating agencies downgraded us.

Son:  For taking on more debt?

Me:  No, because our politicians can’t agree.

Son:  Don’t you always say politicians never agree?  And what does that have to do with debt?

Me:  It’s all complicated, someday maybe you will understand, but then it got…
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The Media Admits To Ignoring Ron Paul

Courtesy of ZeroHedge. View original post here.

Why? Because if "the unelectable one" were to become president, the financial kleptocratic, oligarchic status quo, which just so happens is the big legacy media’s biggest advertising base, would be wiped out overnight. Next up: big media becomes very small media. The clip below from CNN explains it all.

As for the reason why Bachmann took first, one picture speak a thousand words:

h/t John and Travis


Phil's Favorites

Bernanke's Balderdash


Bernanke’s Balderdash

Courtesy of David Stockman

The US and world economies are drifting inexorably into the next recession owing to the deflationary collapse of commodities, capital spending and world trade. These are the inevitable “morning after” consequence of the 20-year global credit binge which has now reached its apogee.

The apparent global boom during that period was actually a central bank driven excursion into the false economics of household borrowing to inflate consumption in the DM economies; and frenzied, uneconomic investing to inflate GDP in China and the EM.

The common denominator was falsification of financial prices. By destroying honest price discovery...

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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

Bond Funds Have Been Borrowing to Boost Returns (Bloomberg)

For more than two decade, Bill Gross did the seemingly impossible, according to Bill Gross.

Drug that rose 5,000% hasn't come down in price (CNN)

Remember the drug used by cancer and AIDS patients that skyrocketed from $13.50 to $750 a pill? Well, the price has yet to come back to earth.

The company still has not cut the price below $750 even thoug...

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Zero Hedge

The Deep State: Source Of All Negativity

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Doug Casey via,

I’d like to address some aspects of the Greater Depression in this essay.

I’m here to tell you that the inevitable became reality in 2008. We’ve had an interlude over the last few years financed by trillions of new currency units.

However, the economic clock on the wall is reading the same time as it was in 2007, and the Black Horsemen of your worst financial nightmares are about to again crash through the doors and end the party. And this time, they won’t be riding children’s ponies, but armored Percherons.


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Kimble Charting Solutions

Free Premium Trail Offer & Free Webinar Viewing Available Now!

Courtesy of Chris Kimble.


Ryan Detrick and I produced a webinar this week, covering some new indicators we created, which we shared publicly for the first time.

We also shared two new Buy & Hold indicators we created, as well as two short-term trades, that look goo...

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Chart School

Bulls Keep Buying Into The Close

Courtesy of Declan.

Good stuff for bulls as resistance levels get ticked off on the advance. There breathing room for many indices and a chance for consolidation. Nit pickers could point to light volume, but it would be hard for buyers to be coming in here given the sequence of gains.

The Nasdaq 100 still remains tagged to resistance. Can it break tomorrow or will sellers make an appearance. All I know is yet another short trade of mine is stopped out. I should add, I haven't touched my investment account. I would be looking to buy if I had the funds available.

The S&P made a decisive push past its 50-day MA. Next resistance is up at 2,044. Tech...

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All About Trends

Mid-Day Update

Reminder: David 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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Whitney Tilson On LL, EXACT, And Martin Shkreli


Whitney Tilson On LL, EXACT, And Martin Shkreli

Courtesy of Value Walk

1) The shares of one of my largest short positions (~3%), Exact Sciences, crashed by more than 46% yesterday. Below is the article I published this morning on SeekingAlpha, explaining why I think it’s still a great short and thus shorted more yesterday. Here’s a summary:

  • The U.S. Preventative Services Task Force’s Colorectal Cancer Screening Draft Recommendation issued yesterday is devastating for Exact Sciences’ only product, Cologuard.
  • I think this is the beginning of the end for the company.
  • My price target for the stock a year from now is $3, so I shorted more yes...

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Sector Detector: Searching for solid support in the face of global headwinds

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

Courtesy of Sabrient Systems and Gradient Analytics

Uncertainty about the health of the global economy led investors to flee U.S. equities during Q3, primarily driven by worries about China's growth prospects and the Federal Reserve’s decision to not raise rates. Sure, there are plenty of real and perceived headwinds, but on balance it seems that a recession here at home is not in the cards. And when you consider sentiment and the technical picture, it appears that a continuation of Friday’s bounce is in store. The question remains as to whether the seasonally strong Q4 will be able to propel the bulls through levels of resistance that have built up.

In this weekly update, I give my view o...

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Swing trading portfolio - week of October 5th, 2015

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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Baxter's Spinoff

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

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...

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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 


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Watch the Phil Davis Special on Money Talk on BNN TV!

Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene


The replay is now available on BNN's website. For the three part series, click on the links below. 

Part 1 is here (discussing the macro outlook for the markets) Part 2 is here. (discussing our main trading strategies) Part 3 is here. (reviewing our pick of th...

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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

Thank you for you time!

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About Phil:

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

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About Ilene:

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

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