Archive for 2011

Epic Failure: The Supercommittee Was A Super Joke

Courtesy of Michael Snyder of Economic Collapse 

Does anyone need any additional evidence that our political system is completely broken?  The bipartisan congressional supercommittee that was given two months to come up with at least $1.2 trillion in deficit cuts over the next decade has failed to reach an agreement.  It is an epic failure and a national embarrassment.  The truth is that they never even came close to an agreement.  In fact, as you will read below, the two sides on the panel have been barely even talking to each other.  In the end, the supercommittee was a super joke. Meanwhile, the U.S. national debt has passed the 15 trillion dollar mark and we are facing trillion dollar deficits as far as the eye can see.  We are heading directly for a national financial disaster, and our "leaders" seem powerless to do anything about it.

According to the supercommittee’s rules, any plan would have had to have been submitted to the Congressional Budget Office by Monday in order to give the CBO 48 hours to analyze how much the plan would reduce budget deficits over the coming decade.

When the supercommittee was announced, it made headlines all over the world, but now it is ending with a whimper.

The supercommittee was never a good idea in the first place, but you would have thought that they could have come up with something over the course of two months.

But instead all they are giving us are a whole bunch of excuses and a whole lot of hot air.

What a joke.

Is it really that difficult to come up with $1.2 trillion in cuts over a decade?

It isn’t as if they would even be cutting very deeply.  $1.2 trillion in cuts would not even cut the budget by $150 billion a year.  We would still be talking about trillion dollar deficits way into the future.

But instead of agreeing to some token cuts, they have chosen to do nothing and to blame each other.

So now $1.2 trillion in "automatic budget cuts" will go into effect starting in 2013.  But even that $1.2 trillion figure contains a lot of "fuzzy math".  For example, it includes $169 billion in "projected savings" from "reduced interest costs" on the national debt.

I would love to see how they came up with that figure.

In any event, the truth is…
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Precious Metals Charts Point to Higher Prices – Part II

Courtesy of Chris, the Gold and Oil Guy

Precious Metals Charts Point to Higher Prices – Part II

Over the recent couple months the precious metals charts have made some sizable moves. Most investors and traders were caught off guard by the sharp avalanche type selloff and lost a lot of hard earned capital in just a few trading sessions. Gold dropped over 20% and silver a whopping 40%.

The crazy thing about all this is that these types of moves in precious metals can be avoided and even taken advantage of in certain situations. There is no reason for anyone to continue holding on to those positions after they pullback 6% of more because of the type of price and volume action both gold and silver had been displaying in the past few sessions.

I warned investors on Aug 31st that precious metals were about to top any day and that protective stops should be tightened or taking profits was also a smart move. It was only 2 trading sessions later that precious metals topped and went into a free fall. You can get my detailed analysis if you read my report “Dollar’s On the Verge of a Relief Rally Look Out!”.

A couple weeks later once precious metals has found support and the uneducated investor’s were licking their wounds wondering what the heck just happened to their trading accounts… I put out another report but this time with a bullish outlook. Silver was currently trading at $29.96 and I had a $35-$36 price target over the next two months. Gold was trading down at $1611 and I saw it heading back up to $1750-$1775 area before finding resistance and pulling back. Both these forecasts were reached over the next two months. You can quickly review the report called “Precious Metals Charts Point to higher Prices” for more info.

With all that said, what exactly are the charts saying right now?

Current Precious Metals Charts Summary:

The past 6 weeks we have been watching both gold and silver struggle to hold up but they have managed to grind their way to my price targets. After reaching those targets a couple weeks ago sellers have stepped back into the precious metals market and put pressure these metals.

Last week gold and silver started to pullback in a big…
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The Coming European Superstate That Germany Plans To Cram Down The Throats Of The Rest Of Europe

Courtesy of Michael Snyder of Economic Collapse 

A lot of people were puzzled about what German Chancellor Angela Merkel meant when she recently stated that the ultimate solution to the financial crisis in the EU would "mean more Europe, not less Europe".  Well, now we are finding out.  A leaked internal German government memo entitled "The Future of the EU: Required Integration Policy Improvements for the Creation of a Stability Union" actually proposes the creation of a "European Monetary Fund" which would be given the power to run the economies of troubled European nations.  This "stability union" would be quickly followed by the creation of a full-fledged "political union".

Essentially, this leaked memo proposes the creation of a "European Superstate" which will be crammed down the throats of the rest of Europe whether they like it or not.  National sovereignty would be a thing of the past and European bureaucrats would run everything.  Of course this will never be accepted by the people of Europe until they feel the bitter pain of the coming financial collapse, but we are starting to see that there is already a clear plan for what the Germans wish to implement in the aftermath of the coming crisis.

A lot of people have just assumed that if there is a massive financial collapse in Europe and the euro crashes that it will mean that end of the euro and potentially the breakup of the EU.  But that is not what the Germans have planned at all.

An article in the Telegraph has posted details about the leaked internal German government memo mentioned above.  It really is startling to see that a full-fledged "political union" in Europe is being discussed at the highest levels of the German government….

The six-page memo, by the German foreign office, argues that Europe’s economic powerhouses should be able to intervene in how beleaguered eurozone countries are run.

The confidential blueprint sets out Germany’s plan to tackle the eurozone debt crisis by creating a “stability union” that will be “immediately followed by moves “on the way towards a political union”.

It will prompt fears that Germany’s euro crisis plans could result in a European super-state with spending and tax plans set in Brussels.

Can you imagine what Europe would look like under such a plan?

National sovereignty would be a thing of the


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Japan’s Kokusai Liquidates Remainder Of Euro Sovereign Exposure, Just As European Primary Issuance Supply Surges

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

When we discussed the specifics of the ongoing European bank run, we cited from the NYT which noted the actions of a core Japanese mutual fund with European sovereign exposure, namely that “earlier this month, Kokusai Asset Management in Japan unloaded nearly $1 billion in Italian debt.” The Nikkei has just reported that this was merely the beginning: “Kokusai Asset Management Co. has sold all Spanish and Belgian government bonds that were part of its flagship fund, Global Sovereign Open, The Nikkei learned Monday. As of Nov. 10, Spanish and Belgian bonds accounted for 1.8% and 3.1% of the fund, respectively. The share of the bonds in the fund’s portfolio fell to zero as of Thursday.” Just what prompted this drastic move and very loud slap in the face of the European confidence building exercise? “A Kokusai Asset Management official said the company sold off the bonds, amid widespread concerns about the outlook for Europe’s sovereign debt crisis to avoid hurting the value of the fund, given volatile prices of the bonds. The mutual fund operator had already divested the fund of all its French government bonds in October and all Italian bonds in early November.” It is safe to say that where one core asset managers has been (and no longer is), everyone else will shortly follow. For the simple reason that it is now if not cool to not have European exposure, it is certainly required by one’s LPs to cut down on all European bonds. Kokusai is merely the canary: expect everyone else to go ahead and dump the €741 billion in non-domestically held Italian (and then all other European sovereigns) bonds. Good luck ECB buying these in the secondary market. And one market where the ECB can do nothing by charter, is the primary issuance one, where as the following update from Morgan Stanley shows, things are getting from from bad to worse.

Issuance between now and year-end

 

A near-term silver lining for many countries is that their 2011 bond issuance programmes are drawing to a close in many cases (see Exhibit 4). France, Netherlands and Portugal have all completed their bond issuance programmes. However, Germany, Italy and Spain still have a fair way to go. In 2012, of


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Vix to 40+

Courtesy of ZeroHedge. View original post here.

Submitted by South of Wall Street.

SocGen’s news flow index suggests the VIX is headed between 40 and 50.  They arrive at this by counting “the number of newspaper articles highlighting themes related to economic strength…
Historically they have proven highly sensitive to financial assets pricing, and
often lead trends by a few months.”

 

 

With the VIX holding 30 (twice the level we started the year mind you) on every ‘confidence’
rally, I won’t be surprised the day she blows.  Whether it is China, Germany leaving the EU, or Israel lobbing one at Iran … we are in a very fragile environment, and I’m convinced that risk assets will not be able to handle any type of shock. 
This is for a variety of reasons: confidence, liquidity, regulation,
solvency, etc. 

The composition of this index from SocGen is not as important as the message that
we are in an extremely volatile environment – and volatility is
lagging.  Be prepared.

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Expect A Global Recession No Matters What Happens In The Euro Zone

Courtesy of www.econmatters.com.

By EconMatters

After MF Global went bust, most people believe it was an extreme "spectacular recklessness" under Jon Corzine, and that the U.S. banks should have only "moderate" European Exposure.  However, banking stocks have been under pressure with increasing investors worries.

Jefferies Group, for example, eventually disclosed detail position it held on European debt earlier this month after its shares plunged more than 20%.  But other banks have not followed suit as Bloomberg notes that since it is not required by the U.S. regulation,

"Firms including Goldman Sachs and JPMorgan don’t provide a full picture of potential losses and gains in the event of a European default, giving only net numbers or excluding some derivatives altogether." 

U.S. stocks took a beating after Fitch Ratings said on Wed. Nov. 16 that Europe’s debt crisis may pose a “serious risk” to U.S. banks, driving investors to safer bets such as U.S. Treasurys.  Fitch also notes that although U.S. banks have been reducing their direct exposure for well over a year, but they haven’t clearly disclosed the extent of their holdings of European sovereign debt or their trading positions with European counterparties.

There are clues to somewhat quantify the potential exposure on a global basis and of the U.S. banks.

Reuters cited a report by the IIF that European banks hold some $3.5 trillion of euro-zone sovereign bonds and U.S. banks have significant direct exposure to their European peers.  U.S. banks had about $180.9 billion of debt from GIIPS on their books at the end of June.  Guarantees and credit derivatives added another $586.6 billion, bringing the total to $767.5 billion based on Bank for International Settlements data.  But the exposure does not stop there,

" There is a secondary level of exposure that is potentially more worrying — through international banks lending to each other. Here the greatest risk stems from Italy and France. International bank claims on Italy total $939 billion, and French banks account for well over one-third of that, BIS data show… If Italian debt slumps even further, causing deeper losses for French banks, international banks could stop lending to France. The losses would ripple through the whole global financial system."

 

Chart Source: NYT, Oct. 23, 2011

These…
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Jim O’Neill Describes Europe’s Surreal Times, Asks If Germany And The Euro Area Even Want The Monetary Union Any Longer

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Among the traditionally meandering permabullish ramblings of a man who continues to ignore the disconnect between reality and his view of the world, tonight’s note by GSAM loss leader Jim O’Neill “Surreal Times” has a very ominous rhetorical question inbetween all the bullish propaganda: “The ECB doesn’t seem to regard 10-year Italian bonds as a bargain and, of course, it is rather tricky as they need to be sure that Monti will deliver. In turn, this means that what is really important is that Mario gets support from those in the background and, ultimately, the Italian voters. And then there is Spain. And still, of course, the troubling Greek situation. And ultimately, the complex world of Berlin and Frankfurt. As many European newspapers are asking in recent days, does Germany actually really still want the EMU? And, as I shall now provocatively ask, does the Euro Area? All very surreal.” No Jim, all very logical, because for the first time in decades, Europe is finally starting to do the math and realizes it is failing miserably. It is those stuck in a world in which combined total exports are greater than total imports by over $300 blilion: a mathematical lunacy, who think that what is happening is “very surreal.” To everyone else, the right phrase is “very much expected.”

From Goldman’s Jim O’Neill

Surreal Times.

Another fascinating week passes with the European mess understandably dominating the minds of everyone around the world. It is quite surreal. There are no signs of any real collective central leadership, many key players are hardening their positions, other regions of the world are increasingly worrying about it, and markets ended the week with a sort of eerie silence.

As I often have said since the European troubles escalated in August, there is life outside of Europe. That remains the case. But virtually wherever and whoever I talk to or with, people are so focused on the European issues. In the week ahead, I will be participating in a board meeting of BRUEGEL, the European think tank, which will be most interesting. Anyhow, more of this topic and others below.

Good Lord – Gaylord!

My last week started with a brief 2-day trip to Maryland and back. I thought I was going to Washington DC, but, in fact, it was…
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Occupy LA Teach In William K Black

Occupy LA Teach In William K Black

(H/tip Jesse)





China’s Vice Premier Sees “Chronic Global Recession”; Why this Astonishing Admission?

Courtesy of Mish

It’s not often we hear candid talk from global leaders about the economic realities that lay ahead. This is one of those rare times.

Please consider China vice premier sees chronic global recession 

A long-term global recession is certain to happen and China must focus on domestic problems, Chinese Vice Premier Wang Qishan has said.

"The one thing that we can be certain of, among all the uncertainties, is that the global economic recession caused by the international financial crisis will be chronic," Wang was quoted by the official Xinhua news agency as saying at the weekend.

Wang’s comments were the most bearish forecast ever by a top Chinese decision-maker about the world economy, and Beijing’s worry about a worsening global environment could translate into an impetus for pro-growth policies at home.

Why this Astonishing Admission?

Regular Mish readers will not find that forecast surprising in the least. What is surprising is the high-ranking official who makes that forecast.

In a world of global economic denial about the Euro, about deficits in the US, about housing bubbles in Australia, China, and Canada, and in general denial about every economic woe the world faces, one might ask "why this astonishing admission?"

I have a 3-part answer

  1. As China shifts from an untenable infrastructure model to a consumption model, as Europe faces a Eurozone breakup and harsh recession, as the US faces a deficit crisis (albeit halfheartedly at best), much global pain is in order.
  2. By framing the problem as a global problem, the vice-premier gets to blame the world economy for the internal strife in China.
  3. This is an indication that China is falling apart right here, right now, much faster than the Western world believes.

The admission by the vice-premier simply reflects the demise of China’s export model in the face of a rapidly slowing global economy accompanied by a regime change in China that will be forced to shift its internal priorities.

These thoughts echo comments I have made previously in …

Europe Undeniably in Recession; Germany Manufacturing PMI Contracts for First Time in Two Years, New Orders Collapse


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Presenting Russell Napier’s Greatest Hits

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Two weeks ago, courtesy of Gresham’s Law, we brought to our readers Jim Grant’s greatest hits: a compilation of the most memorable TV appearances by the famous newsletter writer. Today, we are happy to present another controversial luminary – Russell Napier: the renowned financial historian and consultant for CLSA, as well as author of the engrossing Anatomy of the Bear, who only together with Albert Edwards, has predicted that the S&P would eventually drop to 400. Napier has articulated some fantastic insights on the generational cycle, bear market bottoms and currencies in recent years. His insights, unlike those of TV pundits whose soundbites are only there to fill the gap between two ad segments, are always something to look forward to.





 
 
 

Zero Hedge

Bitcoin Buyer Beware

Courtesy of ZeroHedge. View original post here.

Entrepreneurs have a new trick to raise money quickly, and it all takes place online, free from the constraints of banks and regulators. As Axios reports, since the beginning of 2017, 65 startups have raised $522 million using initial coin offerings — trading a digital coin (essentially an investment in their company) for a digital currency, like Bitcoin or Ether.

One recent example, as NYT reports, saw Bay Area coders earn $35...



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ValueWalk

Magic Quadrant In Picking Stocks And Sports Betting

By Jacob Wolinsky. Originally published at ValueWalk.

Picking stocks is a tricky game and so is sports betting. With the NFL and NCAA football seasons only a few months away, we can analyze the professional sports-betting industry to better understand the complexities behind making money in the stock market. Anybody who has traveled to Las Vegas, and bet on a sporting event, understands that simply choosing a game winner is not enough for a casino to pay you winnings. You also need to forecast how many points you think a certain team will win or lose by (i.e., the so-called “spread”) – see also What Happens in Vegas, Stays on Wall Street. In the world of stocks, winning/losing is not measured by spreads but rather equities ...



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Phil's Favorites

Uber gets a backseat driver as Kalanick exits top job

 

Uber gets a backseat driver as Kalanick exits top job

Courtesy of John ColleyWarwick Business School, University of Warwick

TED Conference/Flickr, CC BY-NC ...



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Insider Scoop

Marveling At Multi-Factor ETFs

Courtesy of Benzinga.

Related This Goldman ETF Keeps Growing Getting Smarter About Smart Beta Related ...

http://www.insidercow.com/ more from Insider

Digital Currencies

Bitcoin In Perspective: Bill Gates Worth More, Gold 200 Times More

Courtesy of Mike Shedlock, MishTalk

An interesting article on HowMuch puts the Bitcoin phenomenon into proper perspective.

Google founder Larry Page’s net worth beats bitcoin’s entire market cap. Microsoft founder Bill Gates’s net worth is double Bitcoin.

Please consider The Bitcoin Economy, in Perspective.

Last year, Bitcoin became more stable than gold, and earlier this year, the price of a Bitcoin surpassed that of an ounce of gold for the first time. Currently, all the bitcoin in the world is ...



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Chart School

Russell 2000 at Rising Support

Courtesy of Declan.

There wasn't much to say about today, but the one index which caught my attention was the Russell 2000. The index caught a bounce in demand at the rising trendline and also did enough to recover the 20-day MA. Traders looking for pullback opportunity could take a look at the Russell 2000. Stops on a loss of 1,397.


The Nasdaq is primed for a move to challenge 6,350. Today's doji marks indecision just below 6,250 but if it can push above this price level it would likely trigger a spate of short covering. Technicals hav...

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Biotech

Even though genetic information is available, doctors may be ignoring important clinical clues

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

Even though genetic information is available, doctors may be ignoring important clinical clues

Courtesy of Greg HallCase Western Reserve University

Digitized strand of DNA. Mathagraphics/From www.shutterstock.com

With the availability of home genetic testing kits from companies such as “23andMe” and “Ancestry DNA,” more peo...



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OpTrader

Swing trading portfolio - week of June 19th, 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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Mapping The Market

Frontier laid off state Senate president after broadband vote it didn't like

Courtesy of Jean-Luc

Speaking of FTR – not nice people…

Frontier laid off state Senate president after broadband vote it didn’t like

By Arstechnica.com

Broadband provider Frontier Communications recently laid off the West Virginia state Senate president after a vote the company didn't like—and yes, you read that correctly.

West Virginia does not have a full-time legislature, and state lawmakers can supplement their part-time government salaries ($20,000 a year,&...



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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.

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Members' Corner

Robert Sapolsky: The biology of our best and worst selves

Interesting discussion of what affects our behavior. 

Description: "How can humans be so compassionate and altruistic — and also so brutal and violent? To understand why we do what we do, neuroscientist Robert Sapolsky looks at extreme context, examining actions on timescales from seconds to millions of years before they occurred. In this fascinating talk, he shares his cutting edge research into the biology that drives our worst and best behaviors."

Robert Sapolsky: The biology of our best and worst selves

Filmed April 2017 at TED 2017

 

p.s. Roger (on Facebook) saw this talk and recommends the book ...



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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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