Archive for 2011

Lonely Analyst Warns of 2015 Bank Crisis Amid `Upbeat’ Davos – Bloomberg

After the 2008 crisis, governments and central banks spent unprecedented amounts of taxpayer money to bail out the financial system. Part of Wilkinson’s concern is that if the system is allowed to return to its old boom-bust habits, debt- strapped governments may not be able to handle the fallout of another crisis, either financially or politically.

“If there is another banking crisis, the Western governments are just in no shape to stabilize the system, they’ve expended their entire arsenal on the last round of fiscal injections,” Wilkinson said.

Full article here: Lonely Analyst Warns of 2015 Bank Crisis Amid `Upbeat’ Davos – Bloomberg.





The state of the union: The union’s troubled state | The Economist

Both parties’ ideas are rotten, but the collision between them looks like being worse. On March 4th the federal government will run out of money unless Congress first passes a bill voting more; a few weeks after that, it will bump up against the federal debt ceiling, now set at an apparently insufficient $14.3 trillion, unless, again, Congress votes to increase it. Both measures must be passed by a House of Representatives now firmly in Republican hands, and also require the support of seven or more Republican senators. The Republicans have vowed to exact deep spending cuts in return for their assent. The president will not accept these. The stage is set for a savage spring.

Full article here: The state of the union: The union’s troubled state | The Economist.





Goldman On What Happens To Oil As Egypt Contagion Flares

Courtesy of Tyler Durden

A week after Zero Hedge first speculated what may happen to oil prices should the Suez Canal be shut down, Goldman arrives on the scene… And as expected, to Goldman it is all (mostly) priced in – the risk of contagion to Saudi is zero. After all, rich people never revolt… And things must always evolve according to what only Goldman Sachs has foreseen.

From Goldman’s Jeffrey Currie:

Mass political protest spread from Tunisia to Egypt this past week, which raised concerns that the political instability may spread further and even into the energy-rich nations in the Gulf. Although commodity prices rose sharply, this rise in prices reflects concerns over political contagion and not direct physical disruptions as the impact on commodity fundamentals remains contained for now.

Recent events can impact commodity fundamentals via three channels

Although commodity fundamentals remain undisrupted, we see three channels that drive fundamental risks: 1) the risk of a disruption of commodity shipping routes posed by a further deterioration of conditions in Egypt, 2) the risk posed to crude oil supply should the political instability spread to the major producing countries in the region, which we view as unlikely given GCC affluence, and 3) the risk posed to agricultural demand should regional governments escalate imports of agricultural commodities in an effort to ensure local food supplies to avoid political unrest.

Oil impact determined by political and financial contagion risk

Ironically, while the impact on the crude oil market will likely be determined by whether or not the political contagion can be contained, the impact on the agricultural markets will likely be determined by the extent of the effort to contain the political contagion, with greater efforts likely leading to higher agricultural prices. Although we see the risk of political contagion as relatively low in the more affluent countries, financial contagion has already spread to these regions, raising the cost of oil production. Further, if these countries feel compelled to increase  spending in the face of greater political pressure, it could lead to a rise in the oil price required to balance budgets in these countries.

Should political contagion risk ease, the oil market is vulnerable to a near-term but temporary correction

Net, we see the current political crisis as raising near-term risk to agricultural prices. For oil, should the


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The 5 Black Swans That Keep Dylan Grice Up At Night… And How To Hedge Against Them All

Courtesy of Tyler Durden

With all the hoopla over Egypt some have forgotten that this is merely a geopolitical event (one of those that absolutely nobody, with a few exceptions, was talking about less a month ago, so in many ways this is a mainstream media black swan which once again exposes the entire punditry for the pseudo-sophist hacks they are), and that the actual mines embedded within the financial system continue to float just below the surface. Below we present the five key fat tail concerns that keep SocGen strategist Dylan Grice up at night, which happen to be: i) long-term deflation, ii) a bond market blow-up, iii) a Chinese hard-landing, iv) an inflation pick-up, and v) an Emerging Markets bubble. Far more importantly, Grice provides the most comprehensive basket of trades to put on as a hedge against all five of these, while also pocketing a premium associated with simple market beta in a world in which the Central Banks continue to successfully defy gravity and economic cycles. For all those who continue to trade as brainless lemmings, seeking comfort in numbers, no matter how wrong the “numbers” of the groupthink herd are, we urge you to establish at least some of the recommended trades in advance of what will inevitably be a greater crash than anything the markets experienced during the depths of the 2008 near-cataclysm.

But before we get into the meat of the piece, we were delighted to find that Zero Hedge is not the only entity that believes that providing traditional annual forward looking forecasts is nothing more than an exercise in vanity (and more oftan than usual, error).

At this time of the year we’re supposed to give our predictions for what’s in store for the year ahead. The problem is I don’t have any. Not because making forecasts is difficult. It isn’t. It’s just pointless. Instead, I suggest getting in touch with our inner Kevin Keegan, the hapless former England football manager who, facing the sack after a bad run of results famously lamented “I know what’s around the corner, I just don’t know where the corner is.” The more people construct portfolios on the assumption that they can see the future, the greater the opportunity for those building portfolios which are robust to the reality that we can’t.

That said,…
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Risk plunges while oil, USTs, and JPY surge on safe haven bid as the revolution is being televised

Courtesy of naufalsanaullah

Original piece here.

20110131





A Bubble in Complacency

Bubble, complacency, economyCourtesy of John Mauldin, Thoughts From The Frontline

The Recent GDP Numbers – A Real Statistical Recovery
Consumer Spending Rose? Where Was the Income?
A Bubble in Complacency
Egypt
Rosie, Las Vegas, Phuket, and Bangkok

This week I had the privilege of being on the same panel with former Comptroller General David Walker and former Majority Leader (and presidential candidate) Richard Gephardt. A Democrat to the left of me and a self-declared nonpartisan to the right, stuck in the middle and not knowing where the unrehearsed conversation would take us. As it turned out, to a very interesting conclusion, which is the topic of this week’s letter. By way of introduction to those not familiar with them, David M. Walker (born 1951) served as United States Comptroller General from 1998 to 2008, and is now the Founder and CEO of the Comeback America Initiative. Gephardt served in Congress for 28 years, was House Majority Leader from 1989 to 1995 and Minority Leader from 1995 to 2003, running for president in 1988 and 2004.

Some housekeeping first. We have posted my recent conversation with George Friedman on the Conversations with John Mauldin web site. And on Saturday we will post the Conversation and transcript I just did with David Rosenberg and Lacy Hunt, which I think is one of the more interesting (and informative!) ones I have done. You can learn more about how to get your copy and the rest of the year’s Conversations (I have some really powerful ones lined up) by going to www.johnmauldin.com/conversations. Use the code “conv” to get a discount to $149 from the regular price of $199. (If you recently subscribed at $199 we will extend your subscription proportionately. Fair is fair.)

The Recent GDP Numbers – A Real Statistical Recovery

Now, before we get into our panel discussion (and the meeting afterward), let me comment on the GDP number that came in yesterday. This is what Moody’s Analytics told us:

“Real GDP grew 3.2% at an annualized pace in the fourth quarter of 2010. This was below the consensus estimate for 3.6% growth and was an improvement from the 2.6% pace in the third quarter. Private inventories were an enormous drag on growth, subtracting 3.7 percentage points; this bodes very well for the near-term outlook and means that current demand is very strong. Consumer spending, investment and…
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Swing trading virtual portfolio – week of January 31st, 2011

This post is for live trades 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

Optrader 

Swing trading virtual portfolio

 

One trade virtual portfolio





China Central Bank Advisor Urges Increase In Official Gold And Silver Reserves

Courtesy of Tyler Durden

And so the long anticipated incursion by the PBOC, whose holdings of gold are behind even those of GLD, begins. Bloomberg has just reported, that “China central bank adviser Xia Bin said the country should increase its gold and silver reserves, the Economic Information Daily reported today, citing an interview with Xia.” But how can this be: after all China has trillions in USD-denominated reserves, and any indication that it believes these are based on a currency that may actually be impaired will be an act of Mutual Assured Destruction. Well, yes and no. China is merely taking the next defection step in what is already failed Nash equilibrium. The first? The Fed’s gross monetization of all US debt. The observant ones will realize that Chinese holdings in November were lower than they were in June of 2009! Who has picked up the slack? Why the Federal Reserve of course. Simply said, the Fed is explicitly making China’s creditor status increasingly less relevant. Zero Hedge has long been wondering how much longer China will take this direct defection in what previously had been a stable equilibrium balance in which China provides the US vendor financing, while the US imports China’s crap. As the Criminal Reserve is increasingly taking away the leverage that China used to enjoy as Creditor numero uno, it is only a matter of time before China fires back. And it may have just done that.

More from Bloomberg:

China should encourage foreign companies to list in the yuan-denominated market, the report said, citing Xia. The nation should slow the overseas listings of Chinese companies, especially resources related, strategic and monopoly firms, the report said, citing Xia.

For now this is still merely sabre ratling. However, one day soon, a report will come out confirming that the PBOC has purchased anywhere between 10 and 100 tonnes of gold (which it is rumored to be doing now in the form of stealth accumulation). That’s when things for the gold shorts, especially those whose massive position shorts have been grandfathered by the C(riminal)FTC, will get ugly.





PSW’s Stock World Weekly Newsletter

Courtesy of ilene

Here’s the most recent Stock World Weekly.  - Ilene

Screen shot 2011-01-30 at 1.34.41 AM





WASHINGTON STATE JOINS MOVEMENT FOR PUBLIC BANKING

Courtesy of ilene

Taking back control of their finances from the TBTF banks is a great idea for other states to pursue as well. – Ilene  

WASHINGTON STATE JOINS MOVEMENT FOR PUBLIC BANKING

Courtesy of Ellen Brown at Web of Debt

Bills were introduced on January 18 in both the House and Senate of the Washington State Legislature that add Washington to the growing number of states now actively moving to create public banking facilities.

The bills, House Bill 1320 and Senate Bill 5238, propose creation of a Washington Investment Trust (WIT) to “promote agriculture, education, community development, economic development, housing, and industry” by using “the resources of the people of Washington State within the state.” 

Currently, all the state’s funds are deposited with Bank of America. HB 1320 proposes that in the future, “all state funds be deposited in the Washington Investment Trust and be guaranteed by the state and used to promote the common good and public benefit of all the people and their businesses within [the] state.”

The legislation is similar to that now being studied or proposed in states including IllinoisVirginiaHawaiiMassachusetts, Maryland, Florida, Michigan, Oregon, California and others. 

The effort in Washington State draws heavily on the success of the 92-year-old Bank of North Dakota (BND), currently the only state-wide publicly-owned U.S. bank.  The BND has helped North Dakota escape the looming budgetary disaster facing other states.  In 2009, North Dakota sported the largest budget surplus it had ever had. 

The Wall Street Credit Crisis Is Crippling State and Municipal Governments

That state budget deficits are reaching crisis proportions was underscored in the January 19 New York Times:

[A]lmost everywhere the fiscal crisis of states has grown more acute. Rainy day funds are drained, cities and towns have laid off more than 200,000 people, and Arizona even has leased out its state office building. . . .

“It’s the time of the once unthinkable . . . ,” noted Lori Grange, deputy director of the Pew Center on the States. “Whether there are tax increases or dramatic cuts to education and vital services, the crisis is bad . . . .”

The “once unthinkable” includes not only draconian cuts in services, increases in taxes, and sale of public assets, but now filing for bankruptcy.  States are not currently allowed to go bankrupt, but…
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Zero Hedge

Nexit Looms - Dutch Parliament To Debate Leaving The Eurozone

Courtesy of ZeroHedge. View original post here.

Submitted by Michael Shedlock via MishTalk.com,

Potential Eurozone disruption possibilities keep compounding.

For example, the Netherlands Parliament will now debate leaving the Eurozone.

In long-winded wording for a potential “Nexit”, Reuters reports Dutch relations with euro up for debate after lawmakers commission probe...



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Phil's Favorites

Proudly Permabullish

Maybe Joshua Brown's quite period is over? He did at least emerge from his vacation to post Proudly Permabullish, which is a reminder to look at the stock market between reading depressing news articles from me. (5-year S&P 500 chart from Yahoo.)

Proudly Permabullish

Courtesy of 

It’s become fashionable in the age of social media to derisively sneer at our fellow investors who are too optimistic and refer to them as “permabulls.” This sort of thi...



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ValueWalk

Warren Buffett's Top 20 High Dividend Stocks

By Sure Dividend. Originally published at ValueWalk.

Updated February 24th, 2017 by Nicholas McCullum

I think you’ll agree with me that high dividend stocks can be excellent investments for those looking for both:

  1. Current income
  2. Strong total returns

But it can be difficult to find high quality, high dividend stocks.

It isn’t much good finding high yielding stocks when they cut their dividends shortly thereafter.

That’s where Warren Buffett comes in…

Warren Buffett’s portfolio is filled with quality high dividend stocks.

You can ‘cheat’ off of Warren Buffett’s own picks to find high quality, high dividend stocks for your portfolio.  That’s because Buffett (and other institutional investors) are required to perio...



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Mapping The Market

Why Facts Don't Change Our Minds

Courtesy of Jean Luc

Good article about facts and why we reject them:

WHY FACTS DON’T CHANGE OUR MINDS

New discoveries about the human mind show the limitations of reason.

By Elizabeth Kolbert

In “Denying to the Grave: Why We Ignore the Facts That Will Save Us” (Oxford), Jack Gorman, a psychiatrist, and his daughter, Sara Gorman, a public-health specialist, probe the gap between what science tells us and what we tell ourselves. Their concern is with those persistent beliefs which are not just demonstrably false but also potentially deadly, like the conviction that vaccines are hazardous. Of course, what’s hazardous is not being vaccinated; that’s why vaccines were created in the first place. “Immunization is one of the triumphs of modern medicine,” the Gormans no...



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Market News

Breaking News And Best Of The Web

Courtesy of John Rubino.

US stocks finish at record high. Gold and silver at multi-week highs. Bitcoin near all-time high. Trump national security adviser scandal evolving, EPA chief controversy ramping up after email release. Debate over Putin and fake news intensifies.  

Best Of The Web

It’s bubble time! – Peak Prosperity

Dazed & confused… Treasury buying vs. asset valuations? – Econimica

...



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Digital Currencies

As Bitcoin Surges To Record High, China Prepares Its Own Digital Currency

Courtesy of Mike Shedlock (Mish)

Bitcoin hit an all-time high over $1200 today.

Traders are happy because the SEC is expected to rule on a Bitcoin ETF by March 11.

Meanwhile, Bloomberg reports China Is Developing its Own Digital Currency.
 

After assembling a research team in 2014, the People’s Bank of China has done trial runs of its prototype cryptocurrency. That’s taking it a step closer to becoming one of the first major central...

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Kimble Charting Solutions

Crude Oil; Energy stocks suggesting its about to fall, says Joe Friday

Courtesy of Chris Kimble.

Below takes a look at the price action of Crude Oil, Energy ETF (XLE) and Oil & Gas Exploration ETF (XOP) over the past three years.

Could Energy stocks be suggesting the next big move in Crude Oil again? Which direction are they suggesting?

CLICK ON CHART TO ENLARGE

At this time the intermediate trend in Cru...



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Members' Corner

The Manchurian President

 

The Manchurian President

Courtesy of  at BillMoyers.com

As the Trump presidency unravels, unraveling the country along with it, there is no real political antecedent, no lessons from American history on which to draw and provide guidance. We are in entirely uncharted waters.

But there is an antecedent in our popular culture that provides a prism through which to view the contemporary calamity, especially the alleged collusion between Trump’s henchmen and Russian intelligence to deny Hillary Clinton the presidency. I am not the first observer who has ...



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Chart School

Good Recovery

Courtesy of Declan.

In early morning action it was a clear swing to sellers after yesterday's non-event. However, buyers came back and were able to make a good chunk of these losses into today's close.

Large Caps remained the most attractive as defensive stocks often are during times of doubt. The S&P registered higher volume accumulation as intraday action proved to be relatively tight.

The Nasdaq suffered larger losses, but there was no distribution to go with it. Technicals were relatively immune to today's action.

...

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OpTrader

Swing trading portfolio - week of February 20th, 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

Phil's Stock World's Las Vegas Conference!

Learn option strategies and how to be the house and not the gambler. That's especially apropos since we'll be in Vegas....

Join us for the Phil's Stock World's Conference in Las Vegas!

Date:  Sunday, Feb 12, 2017 and Monday Feb 13, 2017            

Beginning Time:  9:30 to 10:00 am Sunday morning

Location: Caesars Palace in Las Vegas

Notes

Caesars has offered us rooms for $189 on Saturday night and $129 for Sunday night but rooms are limited at that price.

So, if you are planning on being in Vegas (Highly Recommended!), please sign up as soon as possible by sending...



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Biotech

The Medicines Company: Insider Buying

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

I'm seeing huge insider buying in the biotech company The Medicines Company (MDCO). The price has already moved up around 7%, but these buys are significant, in the millions of dollars range. ~ Ilene

 

 

 

Insider transaction table and buying vs. selling graphic above from insidercow.com.

Chart below from Yahoo.com

...

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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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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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