Archive for 2012

As WTI Passes $105, Guardian Says Iran “Military Action Likely”, Would Send Crude Soaring

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Between the Chinese 'surprise' RRR and the Iran export halt to UK and France (and escalating tensions), Oil prices are off to the races this evening. WTI front-month futures have just broken $105 (now up more than 10% in the last two weeks), the highest levels in over nine months and just 8% shy of the 5/2/11 post-recession peak just under $115. Brent (priced in EUR) remains off last week's intraday highs (as EUR strengthens) but still above the pre-recession peak but in USD it traded just shy of $121 – well above last week's peak.

Of course, this will be heralded as a sign of demand pressure from a 'growing' global economy rather than the margin-compressing, implicit-taxation, consumer-spending-crushing supply constraint for Europe and the US that it will become in the not too distant future. As we post, The Guardian is noting that US officials are commenting that "Sanctions are all we've got to throw at the problem. If they fail then it's hard to see how we don't move to the 'in extremis' option." The impact of any escalation from here is gravely concerning with PIMCO's $140 minimum and SocGen's $150-and-beyond Brent prices rapidly coming into focus – and for those pinning their hopes on the Saudis coming to the rescue (and fill the Iranian output gap), perhaps the news that our Middle-East 'allies' cut both production and exports in December will stymie any euphoria.

From The Guardian: US officials believe Iran sanctions will fail, making military action likely

Growing view that strike, by Israel or US, will happen
• 'Sweet spot' for Israeli action identified as September-October
• White House remains determined to give sanctions time

"It's not that the Israelis believe the Iranians are on the brink of a bomb. It's that the Israelis may fear that the Iranian programme is on the brink of becoming out of reach of an Israeli military strike, which means it creates a 'now-or-never' moment," he said.

"That's what's actually driving the timeline by the middle of this year. But there's a countervailing factor that [Ehud] Barak has mentioned – that they're not very close to making a decision and that they're also trying to ramp up concerns of an Israeli strike to drive the international community towards putting more pressure on the Iranians."

Chart: Bloomberg





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Net Euro Shorts Rise Again In Past Week – Tom Stolper Bullish Call On Euro Imminent?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Just in time for the latest headfake out of Europe where sentiment at least on thus Sunday afternoon is that Greece is somehow saved (on a rehash of an old story, namely that the ECB welcomes the combination of the EFSF and the ESM - something that Germany has previously expressly refused to comply with, and something which is utterly meaningless – where will the money come from – Italy and Spain? Or will China invest more than the single digit billions in EFSF bonds raised to date?), we look at the CFTC Commitment of Traders for an update on speculative sentiment. There we see that just as the general public was starting to comprehend that Germany may let Greece fail after all, a fact confirmed by Tom Stolper’s most recent flip flopping on the EURUSD, which caused the Goldman catalyst to end his call for a rise in the EUR currency (and for ZH to take the opposite side as usual, a trade which is now 160 pips in the money-  recall “Needless to say, we are now closing our short reco at a profit 9 out of 9 times in a row, and doing the opposite – i.e., going long.”), speculators ended the two consecutive weeks in reducing net short exposure, and the week ended February 14 saw net short interest rise again from -140.6k to -148.6k. So if one is wondering what the weak hands are doing that just got burned shorting the pair in the past 10 days, the 100 pip move higher (which has sent the ES over 1370 and the DJIA futures over 13K) this afternoon explains it. For those wishing to bet on a contrarian outcome, which in Europe is pretty much a given, our advice is to wait for Tom Stolper to issue his latest EUR bullish forecast, which will likely be forthcoming any minute, and which will cement the FX strategist’s place in the FX anti recommendation hall of fame.





Presenting The Goldman Wall Of Worry, And The One Key Item Missing

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Now that the bipolar market has once again resynced general risk appetite with the EURUSD (high Euro -> high ES and vice versa), everything in the macro front aside from European developments, is noise (and the occasional reminder by data adjusting authorities in the US that the country can in fact decouple with the entity responsible for half the world’s trade. This will hardly come as a surprise to anyone. In fact, the conventional wisdom as shown by Goldman’s latest client poll has European sovereign crisis worries far in the lead of all macro risks. Behind it are Iran and nuclear tensions, China hard-landing, the US recovery/presidential election and the Japanese trade deficit/record debt/JGB issues. Which for all intents and purposes means that the next big “surprise” to the market will be none of the above. What are some of the factor not listed as big macro risks? According to David Kostin ‘Risks that clients did not mention include late March US Supreme Court review of health care reform (implications for 12% of S&P 500); mid-year deadline to implement Dodd-Frank financial reform (14% of market); and the French Presidential election on April 22nd where polls show incumbent Nicolas Sarkozy trails opposition candidate Francois Hollande.” Oddly enough, one very crucial item missing is once again surging inflation courtesy of trillions in stealthy central banks reliquification, sending crude to the highest since May 2011, and the most expensive gas price in January on record.

That this has somehow failed to penetrate investors’ skulls shows just how erroneously transfixed the market is that Bernanke has inflation, or rather deflation, under control. As WTI passes $105 in the next few hours, look for Op-Eds lamenting the hundreds of billions in lost purchasing power that have already more than offset the benefit from extended tax cuts. Alas, as noted previously, the central bank tsunami is only just starting. Watch for inflation, and concerns thereof, to slowly seep into everything, especially in the chart below.





ReTuRN To EURO PLaNeT of THe APeS

Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.

EURO PLANET OF THE APES

On the beach of a strange foreign land

A symbol emerged from the sand

He fell to the ground

He knew what he found

Another poor victim of Rand

The Limerick King

 

EURO PLANET OF THE APES
.

Schauble was simply in shock
Merkel appeared like a rock
They’re theory was moot
They could not refute
Those Greeks sure know how to get into hock!!!

The Limerick King and WB7

EURO PLANET OF THE APES II
.

 

ESCAPE FROM EURO PLANET OF THE APES

A leader emerged from the pack
And carefully planned his attack
His first move was key
To ensure victory
The office of Goldman he’d sack!

The Limerick King





Guest Post: Our Tolerance For Fashionable Deception

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Ben Tanosborn

Our Tolerance For Fashionable Deception

Nothing appears as ugly as unmasked raw propaganda, or seems as fashionable as well-crafted deception.  Yet, the catwalk for both forms of propaganda is one and the same, deception wearing the most titillating togs provided by the top fashion house, the House of Public Relations. And the deceptive PR isn’t limited to multinational firms or businesses in general; it is part and parcel of our daily existence, having infiltrated most if not all institutions, totally poisoning politics, and eroding away whatever little honesty might still be left in our elected officials.

During the past century we have seen the transformation of the raw epithet known as propaganda, and all its implied vilification, to that of an accepted social science with full academic accreditation, unashamedly sitting at the same table with all reputable and time-honored professions.  We, members of society, have swallowed lock, stock and barrel the presumed need by notable individuals and institutions to receive help from specialized professionals to show us all the good things about them, their positive contribution to society.  But much of what we get is tainted with deceit.

From press releases to the practice of damage control, public relations, the pseudo-science, is there more often than not ready to deceive us all.  The alchemy of spinning factoids into facts, the use of euphemisms and constant truth cherry-picking, has reached such degree of sophistication that we are, as individuals, no longer able to discern fact from fiction.  Yet, the one place we should be looking for help to unravel deception from truth, the government, is often complicit with those engaged in the deception… that is, when not being the source of the deception itself.  Now, to further complicate matters, we have entered the age of Internet-mediated PR!

Americans have been victims – some might argue, beneficiaries – of three grand deceptions during the past three generations, in all cases having the government as either the deceiver or co-deceiver; the very instrument for the capitalist entrenched power.  One of the three grand deceptions has to do with the very defense of predatory capitalism, a system we are told to equate with democracy and our very constitutional freedoms.  That supreme deception has allowed the build-up of an imperial military, and permitted America’s…
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The Volcker Rule: A User’s Manual

Courtesy of ZeroHedge. View original post here.

Submitted by MacroAndCheese.

 

macroandcheese.org

 

The Volcker Rule, named for the former Chairman of the Federal Reserve credited with taming inflation in the early 1980s, is a specific section of the Dodd-Frank Act that was signed into law on July 21, 2010.  Although the Dodd-Frank Act is now law, the Volcker Rule is not slated to be implemented until July 21, 2012, on the two-year anniversary of the original bill.
 
This entry provides a brief overview of the Volcker Rule and its key statutes, including what entities are impacted, which bank trading activities will be prohibited, the measures that will be required for compliance, and the implementation timeline.   This explanation frequently references the original document itself, with specific citations sourced with the relevant page(s) provided in parentheses.  The original document can be found here:
 

  http://www.sec.gov/rules/proposed/2011/34-65545.pdf

 

 

What is the Volcker Rule?

 

The Volcker Rule (“VR”) is an addendum to the “Dodd-Frank Wall Street Reform and Consumer Protection Act.”  The VR runs 298 pages.  Its intent is to prohibit commercial banks from engaging in “proprietary trading” according to a limited, prescribed definition (see below).  The VR does not prohibit banks from trading altogether, although it will require banks to document all trades that are not “exempted,” and to demonstrate that these trades follow procedures as mandated.  The VR will be overseen by five separate government entities, including the Federal Reserve, SEC, CFTC, FDIC, and OCC (Office of the Comptroller of the Currency.)

 

 

What is the Dodd-Frank Act?

 

The Dodd-Frank Act (“DFA”) was enacted to carry out financial reform measures in response to the financial crisis and recession of 2007-2009.  The intent of the bill
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Dis and Dat

Courtesy of ZeroHedge. View original post here.

Submitted by Bruce Krasting.

.

Self-Serving Accounting

There’s been an ongoing row about changes in lease accounting. Big players in the leasing industry (think GE) have been fighting the changes tooth-and-nail. This article had some interesting data on the consequences of the new accounting rules:

 

 

Consulting firm Chang & Adams found that proposed standards for lease accounting will result in an increase in total reported debt liabilities of $1.5 trillion; increased costs of $10.2 billion annually; job losses of over 190,000; and a lowered GDP of $27.5 billion annually.

$1.5 trillion is a hell of a lot of money to suddenly appear on the balance sheet of these lessors, for that reason alone I expect that the new rules will be watered down. No one wants to see another $1.5T of debt exposed those days. From the C&A report:

 

Essentially, the standards will require tenants to place leases on their balance sheets—an enormous line item that consists of anything from office, business and farm machinery to, yes, real estate.

 

But really, it’s there. I can’t imagine how the accounting rules can bury this debt. I’m amazed there a is even any debate, after all we’ve been through. The conclusion that it could cost 190k jobs and $28b annually might be correct. I would like to see a different report. What is the cost (in both jobs and money) of allowing phony accounting to persist? A few years ago we were measuring this in the Trillions. We still are.

 


Self-Serving Forecasts

This week the Fed came out with its consensus forecast of inflation for the next three years. No surprises, the Fed governors believe that inflation is a non-event:

 

 

I’m not sure if the Fed is trying to fool us with this very tame view of inflation. But the Fed is not fooling the market. The Ten-Year TIPS/Bond spread is now forecasting inflation at 2.3%. That’s the highest reading in…
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The Trouble with the Volcker Rule

Courtesy of ZeroHedge. View original post here.

Submitted by rcwhalen.

“I believe that the officers, and, especially, the directors, of corporations should be held personally responsible when any corporation breaks the law.”

– Theodore Roosevelt, speech at Osawatomie, Kansas
“The New Nationalism”  August 31, 1910

For a while now I have been saying that the Volcker Rule is a bad idea.  I share the respect and admiration we all have for its namesake, former Fed Chairman and full-time public citizen Paul Volcker.  But Volcker has never been a hawk on bank superivision, especially when it comes to large banks like his former employer Chase Manhattan Bank.  I called Volcker “the father of too big to fail” in my 2010 book, Inflated: How Money & Debt Built the American Dream.  The epyhonimous rule that now terrorizes much of the financial industry is thus especially incongruous and for the following reasons. 

<http://www.amazon.com/Inflated-Money-Built-American-Dream/dp/0470875143>

The Volcker Rule seeks to forbid banks from acting as principal in the financial markets for tactical trading gains of any time duration, limiting the investments by the bank to held-to-maturity positions for the corporate treasury.  Most of the comments by the industry, media and other observers have focused on the sales/trading area of the large universal banks affected by the Volcker Rule, but the changes imposed by this draconian prescription also impact the activities of the investment side of the house.  Hold that thought.

In conceptual terms the Volcker Rule is a step back towards the 1930s era Glass-Steagall separation of investment and commercial banking, but only a half-step and this is the crucial point.  The Volcker Rule imposes activity limits on the entire bank without separating the agency and principal functions into different corporate buckets with separate capital in a legal and financial sense.  The Volcker Rule focus on imposing the limitation upon the whole organization does great mischief, as noted by the hundreds of public commenters on the rule. 

Keep in mind that most of the capital in a bank is meant to support principal risk taking by the bank, not customers, in the form of either lending or investing, while the agency activities for customers such as brokerage, trust and asset management are relatively less capital intensive, like an order of magnitude less.  By not bifurcating the capital inside the large universal banks between the…
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On The Greek “Glitch”, Systemic Instability And Skating On Water

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

By Bill Buckler of The Privateer

The Greek “Glitch”

Cast your mind back to the first half of 2007. In the US, Fed Chairman Bernanke was telling his colleagues that the sub prime mess was “grave but largely contained”. Meanwhile, at the White House, President Bush was echoing his predecessor. When the first signs of the Asian Crisis of the late 1990s began to emerge, President Clinton called it a “glitch in the road”. Mr Bush used the same phrase to describe the sub prime situation in 2007. Fast forward to the new potential financial crisis, this time in Europe. As far as the global markets are concerned, this is yet one more in the long line of “glitches”.

The Asian crisis was not allowed to derail the global financial system. It was “fixed” by throwing a huge amount of money at it. The result was the “tech wreck” of 2000-2002. The sub prime mess in the US was not allowed to derail the global financial system. It was “fixed” by so much money that it made the Asian crisis bailouts look like a shower of loose change. The result was the global stock market swoon of late 2008 – early 2009. That one was “fixed” by trotting out the financial “nuclear option”, the direct monetisation of sovereign debt by central banks which came to be known as “Quantitative Easing” (QE).

The current crisis is a sovereign debt crisis. This one is focussed on Greece and has a publicised deadline of March 20 – just over a month from now. On that date, the Greek government must roll over a “tranche” of debt coming due. The amount of this debt is 14.5 Billion Euros. In the context of the serial reliquification of the global system which has been the recurring theme of the last two decades, this sum is less than a rounding error. It is a sub-atomic particle in the structure of the global system.

That fact, in itself, should be enough to starkly show how fragile the entire system is. When the prospect of a nation being unable to roll over a paltry few Euros of maturing debt is enough to galvanise the entire financial world into monetary excess exceeding anything imaginable as recently as late 2007, one must conclude that the
continue reading





 
 
 

ValueWalk

Perpetual Beta

By Guest Post. Originally published at ValueWalk.

“The strongest predictor of rising into the ranks of superforecasters is perpetual beta – the degree to which one is committed to belief updating and self-improvement. It is roughly three times as powerful a predictor as its closest rival, intelligence.” – Philip E. Tetlock and Dan Gardner

Learning from failure requires two things. One – we must expect to fail. Two – we must recognize when we fail. In Superforecasting, Tetlock and Gardner suggest that vague terms like “probably” and &#...



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Phil's Favorites

Why Montana just elected Greg Gianforte, a man charged with assault, to Congress

 

Why Montana just elected Greg Gianforte, a man charged with assault, to Congress

Courtesy of Lee Banville, The University of Montana

Until just about 24 hours before the polls closed, the race for Montana’s sole congressional seat seemed to be focused on health care, Donald Trump and gun rights. Republican businessman Greg Gianforte appeared to be headed for a likely victory in the race against another political newcomer, musician and Democrat Rob Quist.

Then came Wednesday night.

As most people seem to now know, Gianforte lashed out at Ben Jacobs of the Guardian when the reporter pressed him for his stand on the House Rep...



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Zero Hedge

Stocks Surge For 7th Straight Day As US Macro Data Hits 15-Month Lows

Courtesy of ZeroHedge. View original post here.

"Smells Like Victory" - Happy Memorial Weekend...

Let's start with this...

S&P at record highs as US macro data topples to 15-month lows...

Nasdaq hit record highs as Earnings Expectations slump to 2017 lows...

...



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Digital Currencies

Bitcoin Is Crashing (Again)

Courtesy of Zero Hedge

While Bitcoin is still up 13% on the week (its 8th weekly ruse of the last 9), the dollar price of the virtual currency is collapsing again in US trading (after a big rebound during the Asian session)...

Just as with yesterday, there is no immediate news catalyst for the flush.

Meanwhile, the huge arb with South Korea bitcoin pricing remains, and as of this moment is still nearly $1000.

Today's drop ...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

U.S. stocks scale new peaks on retailer results; oil falls (Reuters)

Two top U.S. equity indexes scaled record peaks on Thursday after strong earnings reports from retailers, outpacing European shares which were little changed, while oil prices plunged after top crude producers extended output cuts for a shorter period than expected.

Hedge Funds Squeezed by World's Highest Rents Are Moving Out (Bloomberg)

Benjamin Fuchs raised eyebrows five years ago when he opened his hedge fund next to a place selling live chickens in Hong Kong’s hustling, bustl...



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Chart School

S&P Breakout on Higher Volume Accumulation

Courtesy of Declan.

While I expected the Dow Jones to be the breakout flyer, instead it was the S&P which led the charge on higher volume accumulation.  Technicals are all in the green with a return of the MACD trigger 'buy'.



The Dow did manage to break past 21,000 with a MACD trigger 'buy' but it's still contained by all-time high resistance at 21,200. The index is still well positioned for a larger breakout, but this is the sixth day of consecutive gains for the index so some pullback can be expe...

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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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OpTrader

Swing trading portfolio - week of May 22nd, 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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Biotech

Beyond just promise, CRISPR is delivering in the lab today

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

Beyond just promise, CRISPR is delivering in the lab today

Courtesy of Ian HaydonUniversity of Washington

Precision editing DNA allows for some amazing applications. Ian Haydon, CC BY-ND

There’s a revolution happening in biology, and its name is CRISPR.

CRISPR (pronounced “crisper”) is a powerful technique for editing DNA. It has received an enormous amount of attention in the scientific and popular press, largely based on the promise of what this powerful gene e...



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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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Mapping The Market

Bombing - Right or Wrong?

Courtesy of Jean-Luc

I am telling you Angel – makes no sense… BTW:

Republicans Love Bombing, But Only When a Republican Does It

By Kevin Drum, Mother Jones

A few days ago I noted that Republican views of the economy changed dramatically when Donald Trump was elected, but Democratic views stayed pretty stable. Apparently Republicans view the economy through a partisan lens but Democrats don't.

Are there other examples of this? Yes indeed. Jeff Stein points to polling data about air strikes against Syria:

Democr...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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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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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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