Author Archive for ilene

Target2 and Secret Bailouts: Will Germany be Forced Into a Fiscal Union with Rest of Eurozone?

Courtesy of Mish.

Project Syndicate writer, Hans-Werner Sinn, explains why the ECB’s asset purchases and Target2 imbalances constitute “Europe’s Secret Bailout”.

Under the ECB’s QE program, which started in March 2015, eurozone members’ central banks buy private market securities for €1.74 trillion ($1.84 trillion), with more than €1.4 trillion to be used to purchase their own countries’ government debt.

The QE program seems to be symmetrical because each central bank repurchases its own government debt in proportion to the size of the country. But it does not have a symmetrical effect, because government debt from southern European countries, where the debt binges and current-account deficits of the past occurred, are mostly repurchased abroad.

For example, the Banco de España repurchases Spanish government bonds from all over the world, thereby deleveraging the country vis-à-vis private creditors. To this end, it asks other eurozone members’ central banks, particularly the German Bundesbank and, in some cases, the Dutch central bank, to credit the payment orders to the German and Dutch bond sellers. Frequently, if the sellers of Spanish government bonds are outside the eurozone, it will ask the ECB to credit the payment orders.

In the latter case, this often results in triangular transactions, with the sellers transferring the money to Germany or the Netherlands to invest it in fixed-interest securities, companies, or company shares. Thus, the German Bundesbank and the Dutch central bank must credit not only the direct payment orders from Spain but also the indirect orders resulting from the Banca de España’s repurchases in third countries.

The payment order credits granted by the Bundesbank and the Dutch central bank are recorded as Target claims against the euro system.

For the GIPS countries [Greece, Italy, Portugal, and Spain], these transactions are a splendid deal. They can exchange interest-bearing government debt with fixed maturities held by private investors for the (currently) non-interest-bearing and never-payable Target book debt of their central banks – institutions that the Maastricht Treaty defines as limited liability companies because member states do not have to recapitalize them when they are over-indebted.

If a crash occurs and those countries leave the euro, their national central banks are likely to go bankrupt because much of their debt is denominated in euro, whereas their claims against the respective states and the banks will be converted to the


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Surplus or Stimulus

Courtesy of The Automatic Earth



René Magritte Le Cri du Coeur 1960 

Austerity is over, proclaimed the IMF this week. And no doubt attributed that to the ‘successful’ period of ‘five years of belt tightening’ a.k.a. ‘gradual fiscal consolidation’ it has, along with its econo-religious ilk, imposed on many of the world’s people. Only, it’s not true of course. Austerity is not over. You can ask many of those same people about that. It’s certainly not true in Greece.

IMF Says Austerity Is Over

Austerity is over as governments across the rich world increased spending last year and plan to keep their wallets open for the foreseeable future. After five years of belt tightening, the IMF says the era of spending cuts that followed the financial crisis is now at an end. “Advanced economies eased their fiscal stance by one-fifth of 1pc of GDP in 2016, breaking a five-year trend of gradual fiscal consolidation,” said the IMF in its fiscal monitor.

In Greece, the government did not increase spending in 2016. Nor is the country’s era of spending cuts at an end. So did the IMF ‘forget’ about Greece? Or does it not count it as part of the rich world? Greece is a member of the EU, and the EU is absolutely part of the rich world, so that can’t be it. Something Freudian, wishful thinking perhaps?

However this may be, it’s obvious the IMF are not done with Greece yet. And neither are the rest of the Troika. They are still demanding measures that are dead certain to plunge the Greeks much further into their abyss in the future. As my friend Steve Keen put it to me recently: “Dreadful. It will become Europe’s Somalia.”

An excellent example of this is the Greek primary budget surplus. The Troika has been demanding that it reach 3.5% of GDP for the next number of years (the number changes all the time, 3, 5, 10?). Which is the worst thing it could do, at least for the Greek people and the Greek economy. Not for those who seek to buy Greek assets on the cheap.

But sure enough, the Hellenic Statistical Authority (ELSTAT) jubilantly announced on…
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Neil deGrasse Tyson on the Threat of Science Denial

 

Neil deGrasse Tyson on the Threat of Science Denial

Courtesy of 

This post first appeared on BillMoyers.com.

Just in time for Earth Day, astrophysicist Neil deGrasse Tyson releases a short film on Facebook that he says "may be the most important words I have ever spoken." It's already been viewed nearly 20 million times.

DeGrasse Tyson highlights some of the points he made in his three-part series of conversations with Bill Moyers in 2014, which explored a variety of topics, including the beauty of the scientific method in the search for truth, the value of innovations in science and technology in the ascendency of America, and how political debates about established science are delaying critical conversations about the best ways to combat climate change.

“You have not fully expressed your power as a voter until you have a scientific literacy in topics that matter for future political issues,” he told Bill. “This requires a base level of science literacy that I don’t think we have achieved yet.”

Dig deeper and watch all three episodes.





Why the French presidential candidates are arguing about their colonial history

 

Why the French presidential candidates are arguing about their colonial history

Courtesy of Jennifer Sessions, University of Iowa

When the French presidential elections begin on April 23, the world will be watching closely. The Conversation

Polls are tightening up, but Marine Le Pen, of the far-right National Front (FN) Party, seems likely to get through to the second, runoff ballot on May 10. Will the xenophobic populism that brought Brexit to the U.K. and Donald Trump to the White House claim the Elysée Palace, too?

Le Pen’s expected advance has been one of the few constants in a campaign marked by surprising, dispiriting twists. To a historian of French colonialism like me, one of the most revealing is the renewed debate over the memory and teaching of the colonial past. The candidates’ positions on this issue can be seen as a revealing barometer of French attitudes toward immigration, race and multiculturalism today.

Sixty million subjects

At its height in the 1930s, the French empire encompassed some 60 million colonial subjects, from the Caribbean to Southeast Asia. But after decolonization in the 1950s and 1960s, the French relegated imperial racism, slavery and colonialism to the “historical back burner.” The eruption of the history wars finally broke this public silence in the mid-1990s.

There were two main triggers for the decade-long fight about how to remember France’s colonial history.

The first was the 150th anniversary of the French abolition of colonial slavery in 1998. Angered by the self-congratulatory celebration of French abolitionists, black and Afro-Caribbean activists demanded greater attention to enslaved Africans’ suffering.

Christiane Taubira. Wikicommons/Claude Truong Ngoc

Their efforts culminated in a 2001 law sponsored by Guyanese deputy Christiane Taubira. The “Taubira Law” “recognizes the slave trade and slavery as crimes against humanity.”

The second came in 2000, with revelations about the French army’s systematic use of torture during the Algerian War of Independence (1954-1962). Memoirs published by an Algerian nationalist and a French military officer and studies by two young French historians unleashed harsh condemnation
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‘Public goods’ made America great and can do so again

 

'Public goods' made America great and can do so again

Courtesy of Marina v. N. WhitmanUniversity of Michigan

Image 20170414 25875 n1x0xj

Public goods come in many forms, from highways to magnificent mountains. Road sign via www.shutterstock.com

All Americans are lucky to live in a country brimming with public resources that everyone can share. The Conversation

Many are provided by government and funded with our tax dollars, such as the highways that crisscross the country, the 84 million acres of national parks and the roughly 100,000 public schools that give all children access to education.

Others come from nature, like mountains, lakes and rivers, which also depend on a reliable government and meaningful regulations to preserve and protect them.

While the collective value of these “public goods” is probably incalculable, the economic impact of schools, clean air and vast highways has been significant. In fact, I would argue that public goods are what have made America great.

Unfortunately, our stock of public goods has been declining for half a century, particularly those that require the government’s purse strings. President Trump’s proposed budget would make things even worse by cutting, among many other things, funding for national parks, the cleanup of the Great Lakes and efforts to minimize climate change.

So if Trump is serious about making America as great as it can be, investing in our public goods – as well as those equally vital ones we share with other nations – would be a good place to start.

Nonexcludable and nonrivalrous

The formal definition of a public good is that it’s something that is nonexcludable and nonrivalrous. That’s a fancy way of saying that everyone can take advantage of it and that one person’s use doesn’t reduce its availability to others.

Setting aside for a moment natural public goods, the ones provided by the government have been on the decline. U.S. public capital investment, net of depreciation, fell to just 0.4 percent of GDP in 2014 from 1.7 percent in 2007 and about 3 percent in the 1960s.

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Why are we dragging our feet when more automation in health care will save lives?

 

Why are we dragging our feet when more automation in health care will save lives?

Courtesy of Thomas HoovenColumbia University Medical Center

Image 20170418 32726 ro3ifj

From closed-loop ventilators to smarter vital sign monitors, automation has untapped potential to improve medical outcomes. From www.shutterstock.com

As a neonatologist, I worry about patients with pulmonary hypertension. This unforgiving disease, sometimes seen after premature birth, can end with sudden death from constricting blood vessels in the lungs. One minute a baby in the neonatal ICU may be sleeping comfortably; moments later, doctors and nurses are giving chest compressions and rescue medications. The Conversation

A pulmonary hypertension crisis, as these frightening episodes are called, starts with a drop in the blood oxygen level. That drop triggers a monitor to beep. It’s up to the nurse to hear the sound, come to the bedside and take action.

The first and most effective step in stopping a pulmonary hypertension crisis is simple: Give oxygen. But a nurse caring for another patient might be delayed for 30 seconds, and the loss of that time can lead to brain injury or death.

In an age of self-driving cars and 400-ton airplanes that can land themselves in blinding fog, it makes no sense that hospitalized patients are surrounded by lifesaving machinery that can be activated only by a person pressing a button or turning a knob.

Modern transportation augments human judgment and reaction times with a computer’s superior ability to continuously respond to dozens of fluctuating variables. Yet in medicine, safety remains stubbornly reliant on human intervention.

FDA regulation impedes innovation

My patients with pulmonary hypertension are often attached to a respirator with adjustable oxygen settings. The respirator sits inches below the monitor that indicates how much oxygen is in the blood. But the two machines can’t communicate with each other. If they could, it would be possible to increase the flow of oxygen automatically the moment a crisis is detected.

In 2009, engineers developed just this kind of closed-loop respirator and introduced it in several hospitals as part of a feasibility study.…
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Can the Electric Grid Handle Self-Driving Electric Trucks?

Courtesy of Mish.

In response to some of my recent posts on self-driving and electric vehicles, several readers asked if the electric grid could handle the increase. Other readers flat out stated the electric capacity was insufficient.

What’s the real story?

An electrical engineer in the utility industry emailed his thoughts in a pair of emails yesterday.

Mish,

I agree with you 100% about autonomous trucking. The driver plus insurance represent 39% of the cost per mile of operating a truck, according to the ATRI.

Something you might consider is that autonomous trucking will make electric trucks inevitable. It is easy to build a 200-mile range electric truck today. There are a few on the market. Driving this across the country makes no sense if you’re paying a driver to sit around for 1.5 hours every 200 miles (based on a 400kWh battery and a 350kW charger). Once autonomous trucks work, only electric makes sense. The value of fuel savings is much more than the lost productivity from frequent stops.

Electric trucks require 2kWh/mi to operate and will have dramatically lower repair and maintenance costs. ATRI says a diesel truck’s fuel plus R&M is 58.3c/mi plus 15.8c/mi. At the national average 10c/kWh and 90% lower R&M costs, the electric truck fuel plus R&M will be 70% cheaper.

If you are concerned about battery life replacement costs, Tesla has already demonstrated that properly operating a battery can dramatically reduce degradation. They see about 5% of range loss per 100k miles of operation. Some of this is related to aging and some to use. Either way, oversizing the battery pack so it provides a reasonable range for its life is pretty economic.

With reasonable assumptions, autonomous driving will make freight 40% cheaper per mile. Autonomous electric will be 55% cheaper per mile compared to today.

I asked the responder what his background was, whether or not I could quote him, and whether or not he had any links or supporting evidence to back his claims.

He said the company he worked for would not like the publicity but he had a link and a personal spreadsheet to back his claims.

I said I would call him EEUI (Electrical Engineer Utility Industry).

Second Email from EEUI

I’m an electrical engineer in the utility industry. I’ve been studying this question


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Project Fear in France: Will the Terrorist Ambush Affect the French Election on Sunday?

Courtesy of Mish

French voters go to the voting booths tomorrow. No campaigning can take place today, nor can any election polling.

The final polls show a small bounce for Marine Le Pen. One of the polls has Le Pen back into a tie with Macron.

In the wake of the terrorist gun ambush on April 20 that killed one policeman and injured two others, one has to wonder if and how the attack might impact the elections.

From Eurointelligence, by email:

Will project fear work, and if so for whom?

The gunman on the Champs-Elysées, killing one policeman and wounding two others, forced the presidential candidates last night to change their discourse on live television. Will it be a defining moment for the elections? The underlying question is whether project fear works under these circumstances. And, if so, which of the candidates will benefit?

The shooting had all the signs of a terrorist attack. It happened one hour into a live TV emission where each of the candidates had 15 minutes to explain their presidential bid. Emmanuel Macron was the first one to comment as the news came in, declaring in a solemn voice his solidarity with the victims. But he was also quick to argue against fear-mongering, saying that this is a trap by the attackers.

François Fillon, by contrast, went full-on, calling off his campaign meetings for today. Later he even suggested for the whole election campaign to be suspended on this last day of campaigning. Le Pen canceled her meetings too, Macron followed their move later in the night.

Fillon’s speech followed the one of Marine Le Pen, focusing on terrorism, security, French identity, and education. By calling for campaign suspension, Fillon bet on the emotional aspect of the attack. With this move he made it to the most cited on social media, followed by Marine Le Pen. Will this be enough to propel him into the second round?

Before the attack, however, there was clear momentum for Emmanuel Macron. The polls show him leading, ahead of Marine Le Pen. Dominique de Villepin backed Macron officially, and Nicolas Sarkozy will instruct his people


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Those were the days… When was America ‘great’? And who has Steve Bannon reincarnated?

 

David Brin is an astrophysicist whose international best-selling novels include The Postman (filmed by Kevin Costner in 1997), Earth, and recently Existence. Dr. Brin serves on advisory boards (e.g. NASA's Innovative and Advanced Concepts program or NIAC) and speaks or consults on a wide range of topics. His popular blog is Contrary Brin. Brin's nonfiction book about the information age – The Transparent Society – won the Freedom of Speech Award of the American Library Association. Visit David Brin's website (about, biography, books/novels, short stories).

 

Those were the days… When was America 'great'? And who has Steve Bannon reincarnated?

Courtesy of David Brin

Have you heard of “Godwin’s Law?” It asserts that: “If an online discussion (regardless of topic) goes on long enough, sooner or later someone will invoke Hitler.” In practice, it is used to shame or chastise those who make any sort of comparison to the fascist hellscape of the mid-20th Century.*  To be sure, an overused, hyperbolic cliché can be tiresome.** 

Mike Godwin must be going crazy, right now, amid the tsunami of post-election comparisons. For the record, I do not think Donald Trump wants to, or will, become a Hitler. Parallels with Mussolini are creepy though, starting with Il Duce’s fervid rallies and relentless slogans, calling on Italians to rebuild classical glories and — translated literally— “make Rome great again.” 

Sure, I’ve made my own parallels with 1933 Germany, and they remain apt. Just as the Prussian barons, or Junkers aristocrats fostered the racist-populist brown shirts as a counterweight to socialists and communists, so Fox News, Breitbart-Limbaugh-Jones and the Kochs deliberately whipped non-college white male boomers into a froth… exacerbated by their grouchiness over getting old and seeing the world change around them.

As those so-clever 1930s lords did then, today’s oligarchs stare in disbelief that a gifted shaman leaped aboard their carefully-trained beast, threw off the intended jockeys and grabbed the reins for himself.*** Back eight decades ago, at least a few of the Junkers had enough honesty to proclaim: “Mein Gott, what haf we done?” Alas, do not expect any such honor or…
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French Elections: Last Week Tonight with John Oliver

John Oliver appeals to the French, to their sense of superiority, to vote for anyone other than Marine Le Pen.

French Elections: Last Week Tonight with John Oliver 

The presidential election in France could determine the political future of Europe. John Oliver visits an excessively French bistro to deliver an urgent message to voters.

 





 
 
 

Zero Hedge

Paul Craig Roberts Asks "If This Is Freedom And Democracy, What Is Tyranny?"

Courtesy of ZeroHedge. View original post here.

Authored by Paul Craig Roberts,

“Our problem is civil obedience. Our problem is the numbers of people all over the world who have obeyed the dictates of the leaders of their government and have gone to war, and millions have been killed because of this obedience… Our problem is that people are obedient all over the world, in the face of povert...



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ValueWalk

Schwarzman Makes 'A Rigged Game Worse,' Democrats Say

By International Business Times. Originally published at ValueWalk.

Schwarzman Makes ‘A Rigged Game Worse,’ Democrats Say

Wisconsin Democratic Sen. Tammy Baldwin became the first federal lawmaker to call for Blackstone CEO Stephen Schwarzman to recuse himself from Trump administration policy that affects Schwarzman’s private equity firm. Baldwin’s criticism was echoed by the senior Democrat on the Senate Banking Committee, which oversees many of the economic issues Schwarzman has been working on with…

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By Financial Times [CC BY 2.0], vi...

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Chart School

Nasdaq Technicals Net Bullish as Breakout Readies

Courtesy of Declan.

Things looking good for the Nasdaq as technicals return net bullish after a brief period of bearishness. This coincided with the index nestled against resistance helped by Friday's tight intraday action.  The index is nicely placed for a breakout on Monday, especially given the relative out-performance of the Nasdaq against its peers.


As with the Nasdaq, the Nasdaq 100 also sits on the verge of a breakout, but unlike the aforementioned index its technicals are not yet net bullish.

...

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Phil's Favorites

Bookies See Almost 90% Chance Of Macron Becoming French President

Courtesy of Zero Hedge

As results begin to trickle in (with pollsters showing Macron leading and official French Interior Ministry showing a Le Pen lead), betting odds (according to Betfair) are now giving Macron comfortably over 80% chance of becoming France’s next President.

As the evening has gone on and the picture becomes clearer, his odds continue to increase. The market is clearly expecting a ‘Front Republicain’ to form, as it did in 2002, to rally behind Emmanuel Macron and to deny Marine Le Pen.

Of course, bookies didnt quite get Brexit and Trump right...

...

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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Wall Street gears up for busiest earnings week in years (Reuters)

Corporate America is set to unleash its biggest profit-reporting fest in at least a decade next week, with more than 190 members of the S&P 500 index .SPX delivering quarterly scorecards, according to S&P Dow Jones Indices data.

Draghi Says ECB Hasn’t Seen Evidence of Durable Eurozone Infl...



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Members' Corner

Should I buy that stock?

Courtesy of Phil Stasukaitis (pstas)

I was asked by my local investment club to do a presentation on "how to buy a stock?" As I pondered the question, I began by noting all the elements that I monitor regularly and which come in to play as part of my decision process. As the group is comprised novices to experts, I tried to gear my discussion to cover both basics and more advanced concepts.

Four Part Discussion

  1. Macro Economic Indicators
  2. Market Indexes
  3. Fundamental Analysis
  4. Technical Analysis

1. Macro Economic Indicators

We'll start with reviewing some basic concepts and measurements that have direct effects on the stock market. 

A. Gross Domestic Product (GDP)

...

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Kimble Charting Solutions

Banks at risk if this support gives ways, says Joe Friday

Courtesy of Chris Kimble.

Regional and Large banks have done well since the election. Of late they have lagged the broad market and find themselves testing what could be very important support levels. Below looks at regional bank ETF (KRE).

CLICK ON CHART TO ENLARGE

KRE has experienced a rally that started in February of 2016. This rally picked up speed following the election last November, as KRE almost went verti...



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Insider Scoop

15 Biggest Mid-Day Gainers For Friday

Courtesy of Benzinga.

  • China Digital TV Holding Co., Ltd.(ADR) (NYSE: STV) shares jumped 33.9 percent to $1.70. China Digital TV declared a special cash dividend of US$1.50 per ordinary share.
  • Carver Bancorp Inc (NASDAQ: CARV) shares surged 31 percent to $5.23.
  • CAI International Inc (NYSE: CAI) rose 21.3 percent to $18.75 after the company reported upbeat quarterly profit.
  • Pernix Therapeutics Holdings Inc (NASDAQ: PTX) shares...


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OpTrader

Swing trading portfolio - week of April 17th, 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

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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Biotech

CAR-T & CRISPR - the Future is Now

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

PSW Members....it has been a while since my last post, but since many have all been on the board following the chat, it is time for a scientific lesson in a few of the companies we are long.  In addition, another revolution is coming in the medical field, and it will be touched upon as well.

CAR-T - stands for Chimeric antigen receptors (CARs) and the T is for T-cell.  

From the picture above, T-cells are one cell type of our immune system that fight off infection as well as they are one player at keeping rogue cells from becoming cancerous. Unfortunately, cancer somehow evades the immune system and so it begins.

CAR-T came along in the late1980s via a brilliant scientist, Zelig Eshhar...



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Digital Currencies

Blockchain And Us - The Documentary

Courtesy of Zero Hedge

In 2008, Satoshi Nakamoto invented bitcoin and the blockchain. For the first time in history, his invention made it possible to send money around the globe without banks, governments or any other intermediaries. The concept of the blockchain isn’t very intuitive. But still, many people believe it is a game changer.

The first 40 years of the Internet brought e-mail, social media, mobile applications, online shopping, Big Data, Open Data, cloud computing, and the Internet of Things.

Information technology is at the heart of everything today - good and bad.  

Despite advances in privacy, security, and inclusion, one thing is still missing from the Internet: Trust.

...



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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.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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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