Archive for 2012

The Rebirth of the Actively Managed U.S. Stock Fund

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.


By Nic Colas of ConvergEx Group

The persistent negative investment flows at U.S. listed mutual funds specializing in domestic stocks is one of the most important long-term trends catalyzed by the Financial Crisis.  AUM has dropped by $473 billion since January 2007 despite the S&P 500 Index’s essentially flat performance over this period.  The news is no better since the beginning of 2012 – despite the ongoing rally in domestic equities – with $6.8 billion of further outflows year to date.  In today’s note Nic Colas, of ConvergEx analyzes what will reverse this trend along two vectors: the desire and ability of individuals to invest.  The rally in risk assets, along with declining actual volatility, is the best hope for a reversal in money flow trends. Offsetting that factor are continued stresses on household budgets and consumer psychology combined with problematic demographic trends.  Bottom line: domestic money flows have likely become more economically sensitive than in previous cycles


Like many investment professionals who came up through the ranks as single stock analysts, I turn to time-tested but industry-specific paradigms when analyzing unfamiliar business problems.  In my case, that means pulling lessons from a decade-plus of staring at the U.S. auto industry for clues about how and when individuals choose to spend their money on large purchases like cars and trucks.  These products are typically deeply cyclical in terms of demand.  A good year might see 16 million or more units move off dealer lots.  A bad year would register 12 million or less.  Product pricing follows the same contour; a weak market means more incentives – a polite word for the old Lee Iacocca catch phrase, “Buy a car, get check!”


Back in the early 1990s, Chrysler’s chief economist – a talented and gregarious fellow named Don Hilty – walked me through his model for assessing how the American consumer decides it is time to buy a new car.  This calculus was critical for Chrysler, since it had little in the way of overseas operations to buffer the shock of a weak U.S. market.  Getting demand levels correct – and therefore production and dealer inventories – was worth well over $100 million in incremental profits, and Don’s assessment of the market was the lead presentation at every company Board of Directors meeting.…
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“Welfare” – The Great Delusion

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

We have long argued that at its core, modern society, at least on a mathematical basis – the one which ultimately trumps hopium every single time - is fatally flawed due to the existence, and implementation, of the concept of modern "welfare" – an idea spawned by Otto von Bismarck in the 1870s, and since enveloped the globe in various forms of transfer payments which provide the illusion of a social safety net, dangles the carrot of pension, health, and retirement benefits, and in turn converts society into a collage of blank faces, calm as Hindu cows. Alas, the cows will promptly become enraged bulls once they realize that all that has been promised to them in exchange for their docility and complacency has… well… vaporized. It is at that point that the final comprehension would dawn, that instead of a Welfare State, it has been, as Bill Buckler terms it, a Hardship State all along. Below we present the latest views from the captain of The Privateer on what the insoluble dilemma of the welfare state is, and what the key problems that the status quo will face with its attempts at perpetuating this lie.

From The Privateer

The Great Delusion – “Welfare”

For the best part of the last two decades, it has been accepted as an indisputable fact even by the mainstream media that the two great pillars of the welfare state – medicare and social security – will break the government which offers them. Today, every nation in the world makes at least some pretense of providing “welfare” to its citizens. Since the “developed” (or “rich”) nations are those where these systems are most “developed”, these are the nations most at risk of crumbling under their burdens.

Welfare has many antonyms, but “hardship” is particularly apt in this context. Wikipedia’s entry on “welfare” ends like this: “… this term replaces “charity” as it was known for thousands of years, being the act of providing for those who temporarily or permanently could not provide for themselves.” As usual, the defining characteristic is missed. Charity is voluntary. “Welfare” as practised by government is compulsory. This makes the two terms opposites. It also brings about the opposite results. Charity is a voluntary act made by those who have a surplus to assist

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A Wall Street Insider’s Response To Greg Smith

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by ZH reader Sleestak, who sports a 15 year career in the bulge bracket, including GS and the less fortunate Lehman Brothers, as a fixed income trader.

Greg Smith, the Jerry Maguire of Goldman Sachs, has struck a nerve with his New York Times OpEd admonition of the culture at his former firm, the symbol of all that is successful – and wrong – on Wall Street.  What he did was gutsy, if ill-advised.  But his disillusionment at a once-admired business culture gone bad is also almost adorably naïve and, worse, diverts from the real cancer that has metastasized in our banking “culture” during his years in it.

I’ll say it again: Greg Smith has nerve.  He took great risk putting his name to that letter.  He will be getting calls, emails and all else, straight to his person.  He might well face litigation, this from a foe few dare challenge.  And the men at the at the top, CEO Lloyd Blankfein and COO Gary Cohn, are powerful indeed, and Greg Smith has just publicly done them far more damage as individuals than any testimony in front of Congress did.

Still, what did Greg Smith really think he was getting into when he signed up to work on Wall Street?  Perhaps when contemplating his career he saw the ads we all see on television for Morgan or Merrill: “We’ll help you build your future with sound financial knowhow…”  And that does sound nice.  Finance is complicated and “lay” people surely can use a hand from a thoughtful ally in the trenches.  It is charming to think Greg Smith was taken in by such a mission.

But away from the advertising sets, Wall Street always has been a kill-or-be-killed pit of near-violent wills set against each other.  Perhaps a bit less so in the retail businesses that sell to Moms and Pops (though “broker production” is a hotly competitive racket, to be sure), but certainly in the institutional businesses where Greg Smith operated.   In these businesses, in which the banks trade with professional, accredited investors, the customers are often as bloodthirsty as the banks.  Yes, many could use a good salesman’s hand in furthering their interests, but as many – so many – seek the desk that’s sleeping that day and exact a predatory…
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Things That Make You Go Hmmm – Such As $4.00 Gas (Again)

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.


From Grant Williams’ Things That Make You Go Hmmm

After the attack on ‘speculators’ failed to lower gas prices (here’s a piece of free advice by way of a simple mathematical equation for anybody in the current Administration who may be reading: ZIRP ? Low Gas Prices), it was the turn of the other staple solution to an intractable problem; the US Strategic Petroleum Reserve (SPR):

(Montreal Gazette): A group of Democratic lawmakers in the U.S. House of Representatives is again urging President Barack Obama to aggressively use the threat of releasing oil from emergency reserves to rain on speculators driving up oil prices.


The three lawmakers are gathering signatures from others in Congress for a letter to Obama to press him to wield the 696 million barrels of oil that the government stores in salt caverns as a weapon against “rapid price escalations resulting from speculation in the oil markets.”

Last June (the 24th to be precise), it was announced that 60 million barrels of oil would be released from world reserves, with about half of that amount being taken from the SPR. Oil was trading at $91 when the announcement was made but actually rose in price – hitting $97 – before dropping to $88 once the surplus oil was introduced on July 15.

60 million barrels = $3 lower price. Hardly bang for the buck – especially as oil was back above $100 before the end of the year.

As much as the SPR is seen by many to be the panacea for high prices, the lack of available additional supply from the world’s biggest producers is a far bigger concern; one which my friend Ronni Stoeferle from Vienna wrote a fantastic report on recently entitled “Nothing To Spare” (you can email Ronni HERE for a copy of the report which is an incredibly detailed piece of work). In it he took an in-depth look at some of the supply constraints facing the world and his conclusions are, to say the least, troubling:

The still low reserve capacity makes the oil price vulnerable to geopolitical tensions. With the exception of Saudi Arabia, no country holds any significant reserve capacities. But since

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Apple CEO Tim Cook to Host Conference Call Monday 9am EDT to Discuss Plans for Cash Balance

Courtesy of Benzinga.

Tim Cook, Apple’s (NASDAQ: AAPL) CEO, and Peter Oppenheimer, Apple’s CFO, will host a conference call to announce the outcome of the Company’s discussions concerning its cash balance. Apple will not be providing an update on the current quarter nor will any topics be discussed other than cash.

The conference call will take place Monday, March 19, 2012 at 6:00 a.m. PDT/9:00 a.m. EDT.

For more Benzinga, visit Benzinga Professional Service, Value Investor, and Stocks Under $5.

Weekly Market Commentary: Rally Makes New Highs

Courtesy of Declan Fallon

Markets posted new highs within rising price channels, led by a breakouts in the Dow and S&P, as breadth indicators continued to map swing lows. Volume rose in accumulation as money flowed in from the sidelines.

The S&P cleared the 2011 swing high, but has larger resistance at 1,426 from 2008 to contend with. But given the breaks in other indices this should be cleared over the coming weeks.

The Percentage of S&P Stocks above the 50-day MA rose sharply after spiking at a low in the 50s, but is off past swing highs in the 90s. The one concern is the ‘sell’ trigger in the MACD which may suggest the top in the S&P is closer than expected.

The S&P Bullish Percents slow burn a swing high, but this is not necessarily bearish for the S&P; in 2009 the S&P added another 10% after the breadth indicator topped at 88%.

The Dow was able to take the Large Cap rally a stage further. It cleared the 2008 high by Friday’s close.

The Nasdaq posted a new multi-year high, but unlike Large Cap indices was unable to do so on higher volume accumulation. Bears may look to broadening wedge resistance as an opportunity to take profits or launch a short attack, although the first point of support is just below 2,900.

While the Russell 2000 is working on a challenge of 825, but has larger resistance at 868 to consider.

For the coming week, bears are likely to turn up the heat on the Nasdaq. If they can turn it away from broadening wedge resistance it will add supply into the market and see other indices fall in sympathy. But any decline will quickly run into support, making it a better environment for profit taking than for aggressive shorts.


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St. Patrick’s Weekend Trading Jobs

Courtesy of Declan Fallon

Searching for the pot of gold at the end of the rainbow; try applying for some of these trading jobs:

Electronic Execution Broker
Project Manager, Decision, Risk Management
Project Manager, Risk Management
CI/Portfolio Manager
Citi Retail Services – VP, Credit & Portfolio Manager
Compliance Manager with Futures Experience at Investment Co! $80-120K
Consultant, Hedge Fund Administration
Investment Operations Specialist; $45-60K
Sr Technician, Alternative Investments
Treasury Specialist
Compliance – Leading Hedge Fund
Consultant, Hedge Fund Administration (Investor Services)
Investor Center Investments Representative – Santa Monica, CA
Broker Trainee Program
Administrative Associate – Investment Sales Group (126-377)
Investment Consultant – Salaried plus bonus!
Securities/Mergers & Acquisitions Associate ($130-200K)
Equities Trader
Senior Trader – Proprietary
Index Arbitrage / Delta One Trader
Forward Desk Trade
Index Traders – London and Hong Kong
Single Stock and Index Options Traders
Portfolio Trader ($45-60K)
Jr. Trader – Equity Products Bilingual Japanese ($100-125K)
Active Trader VIP Specialist

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Will Apple Announce “The Dividend” Tomorrow?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Minutes ago Apple announced that first thing tomorrow it will “host a conference call to announce the outcome of the Company’s discussions concerning its cash balance. Apple® will not be providing an update on the current quarter nor will any topics be discussed other than cash.” As a reminder, Apple has just about 100 billion in cash. Everyone expects a dividend. So what happens when everyone finally gets what they have been expecting for so long? Will it mean the end of the growth phase and the advent of the “MSFT” anti-growth curve? Also, which bank will claim the commission for advising Apple on how to spend a cash amount that while nearly a third of Greek GDP, is less than half of the US February budget deficit (in other words, Apple could fund just 12 days of the US spending burn rate in February)? Finally, was the pre-election administration at all involved in the making of this decision – remember the company was expected to announce a cash-related decision a month ago, and nothing happened. Why now? All shall be revealed tomorrow at 9 am.

From the press release:

WHAT: Tim Cook, Apple’s CEO, and Peter Oppenheimer, Apple’s CFO, will host a conference call to announce the outcome of the Company’s discussions concerning its cash balance. Apple® will not be providing an update on the current quarter nor will any topics be discussed other than cash.

WHERE: Via conference call. The dial-in number for press is (877) 616-0063 (toll-free) or (719) 219-0041. Please enter confirmation code 592016.

WHEN: Monday, March 19, 2012 at 6:00 a.m. PDT/9:00 a.m. EDT

REBROADCAST: The conference call will be available as a continuous rebroadcast beginning Monday, March 19 at 9:00 a.m. PDT/12:00 p.m. EDT through Monday, April 2 at 9:00 a.m. PDT/12:00 p.m. EDT. The dial-in number for the rebroadcast is (888) 203-1112 (toll-free) or (719) 457-0820. Please enter confirmation code 6274937.

WEBCAST: Apple will provide live audio streaming of its conference call using Apple’s industry-leading QuickTime® multimedia software. The live webcast will begin at 6:00 a.m. PDT on March 19, 2012 at and will also be available for replay for approximately two weeks thereafter. The webcast is available on any iPhone®, iPad®, iPod touch® or any Mac® or PC running…
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World Markets Weekend Review: The Rally Strengthens

Courtesy of Doug Short.

The 2012 worldwide rally reignited last week, with six of the eight indexes in our basket finishing with a weekly gain — the reverse ratio from the previous week. Germany’s DAXK was the top performer with a gain of 4.03%. France’s CAC 40 finished second with a gain of over 3%. The S&P 500 finished in third, but its gain of 2.43% was enough to make it the sole index to set a new interim high. The SENSEX and Shanghai Composite were the two indexes posting weekly losses, with the Shanghai as the biggest loser, down 1.42%.

The adjacent table shows the 2012 year-to-date performance of our gang of eight. At this point six markets are holding double-digit gains at the end of eleven weeks, but the S&P 500 is a new member of the 10% plus club, replacing the Shanghai Composite. But even the worst year-to-date performer, the FTSE 100, is up over 7%.

A Closer Look at the Last Four Weeks

The tables below provide a concise overview of performance comparisons over the past four weeks for these eight 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 and better understand weekly volatility. The colors for each index name help us visualize 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, CAC 40 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.

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Guest Post: Who Is Really Paying The $25 Billion TBTF Mortgage Settlement

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by David Schawel of

Who Is Really Paying The $25 Billion TBTF Mortgage Settlement

The surprising tale that I will attempt to pen in this blog entry has a very familiar cast of characters; the Obama Administration, the Housing Bubble, “Toxic Mortgages”, and Too Big To Fail “TBTF” Banks among others.  While the headline of TBTF banks in a $25bil mortgage settlement is known to many, the underlying details of the settlement are less known and quite appalling when you pull back the covers.

The wounds on past and present homeowners are still fresh from the housing crisis.  As Jonathan Laing points out in this weekend’s Barron’s cover story, “five million of the country’s 76million mortgage holders have lost their homes to foreclosure or lender ordered short sales since 2006, and an estimated 14million more own more on their homes than their properties are currently worth.  In all, some $7.4 trillion in homeowners’ equity has been destroyed according to Mark Zandi…” 

Cries for Accountability

While blame deserves to be cast upon numerous parties for the housing bubble, Americans have rightly called for accountability on the TBTF banks.  Accountability for what? Among other faults, robo-signing became prevalent among TBTF banks as they forged mortgage documents in order to ensure proper paperwork was done to foreclose on properties.

Details of the $25bil Settlement (in the words of HUD) & Public Lauding

“On February 9, the Department of Justice, the U.S. Department of Housing and Urban Development, other federal agencies, and 49 state attorneys general announced the largest federal and state settlement agreement in history with the five major mortgage servicers for their mortgage servicing practices. The agreement has the potential to help nearly two million American homeowners through a variety of means, including loss mitigation tools such as principal reduction and refinancing of loans for borrowers who owe more on their house than it is worth (“underwater” homeowners), payments of billions of dollars to federal and state parties, and payments directly to individuals who lost their homes to foreclosure and meet certain other criteria.” The public seemed to buy right into this news.  After all, $25bil being paid by the bank sounds pretty tough right? Upon news of the $25bil Mortgage settlement many media members gushed over President Obama’s “accountability” of
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Zero Hedge

TRUMP exposes the Establishment, politics a metaphor for FX

Courtesy of ZeroHedge. View original post here.

There's still a large percentage of the American population that doesn't understand money.  That's why we released our book, Splitting Pennies - to explain how the financial system works.  FX continues to remain a mystery to voters, although it may be the most important issue that can make or break the US economy in the next 10 years.  The election is a political metaphor to the lie being sold in ecomomics; the Establishment has convinced us that, price inflation is from retailers - it's small business that causes inflation.  Not monetary supply...

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Interview With Tobias Carlisle Of Greenback'd And Carbon Beach AM

By Guest Post. Originally published at ValueWalk.

Interview With Tobias Carlisle Of Greenback’d And Carbon Beach AM by The MicroCap Conference

Check out our second interview with Tobias Carlisle of the blog Greenback’d and partner at Carbon Beach Asset Man...

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Phil's Favorites

Renzi's Gamble Even Bigger Than Most Think

Courtesy of Mish.

Italian Prime Minister Matteo Renzi threatened to step down if a December government-reform measure he seeks does not pass.

The reform will dramatically reduce the power of the Senate. It will also give a parliamentary majority to the party that gets the most votes. Renzi wants that authority.

Ironically, if the referendum does pass, Italy is more likely to leave the Euro than if it doesn’t. A graph of Italian Voter Polls shows why.

Opinion Polling for the Next Italian General Election


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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

Crude Rally May Clinch Top Stock Market Status for Canada in ’16 (Bloomberg)

Gold’s best run since 2010 pushed Canadian equities to the top spot among developed-market stocks this year. Fifty dollar crude will give them an opportunity to stay there.

Would Cutting Corporate Tax Rates Really Grow the Economy? (The Atlantic)

One of the things Hillary Clinton and Donald Trump disagree most strongly about is how to stimulate the economy. Donald Trump has one idea that conservative economist...

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Kimble Charting Solutions

Bio-Tech; In more trouble if this fails, says Joe Friday

Courtesy of Chris Kimble.

At one point in time, actually for years, Bio-Tech (IBB) was a market leader. From the 2009 lows to 2015, IBB out gained the S&P by more than 250%. Since the summer of 2015, Bio Tech has remained a leader, a “downside leader!” IBB has lagged the S&P by over 35% in the past 15-months.

Is the downside leadership over for IBB? Below updates the pattern on IBB


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Chart School

SP500 Status Pre US 2016 Elections

Courtesy of Read the Ticker.

Where have we been, what does the future look like?

More from RTT Tv

NOTE: does allow users to load objects and text on charts, however some annotations are by a free third party image tool named

Investing Quote...

..."There is what I call the behaviour of a stock, actions that enable you to judge whether or not it is going to proceed in accordance with the precedents that your observation has noted. If a stock doesn’t act right don’t touch it, because, be...

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Members' Corner

The Orlando Massacre Part 3

Courtesy of Nattering Naybob.

A continuation of a Naybob of IT's Natterings from Part 1 and Part 2...

While many Christian churches expressed grief and offered free funeral services for the victims of the Orlando shooting, the fundamentalist Westboro Baptist Church held an anti-gay protest during the funeral of the victims.

But the Westboro Baptist Church's protest rally was blocked by about 200 people who formed a human barricade on the main street in downtown Orlando, ...

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Swing trading portfolio - week of October 17th, 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 ...

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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...

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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.


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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...

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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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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, ...

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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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