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Author Archive for Zero Hedge

Seven Decades Of Data Prove This Is A Really Dumb Idea… (But They’ll Do It Anyway)

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Simon Black via Sovereign Man blog,

Roman Mairano had just married his sweetheart, and now he was eager to find a way to support her and their future family.

Both he and his new bride had come from very humble backgrounds. And hoping to build wealth, he began looking for new opportunities.

Roman went to a few wealthy contacts in the city and pitched to them that he had a plan to transport lumber to a city where there was a great deal of construction happening.

He offered that if they would back his venture financially, he would give them three-quarters of the profits upon his return.

They agreed. And in the year 1155, Mairano sailed with a shipload of lumber from Venice to Constantinople.

The venture was a success, as was the follow-on venture. Soon he was able to finance most of the journeys himself and keep a higher proportion of the profits.

Now, Roman’s story may be a parable. But it’s representative of untold numbers of people across Venice during the city-state’s golden age.

This form of financial partnership back then was known as a commenda, and it was prevalent throughout the Venetian economy at the time.

The commenda was essentially an early form of a limited partnership; it allowed people with energy and ambition to team up with investors who had capital to risk.

This was an incredibly unique arrangement in the Middle Ages: financial innovation and economic freedom. The Venetian state left people alone to take risks and prosper without the need for constant regulation and intervention.

Thanks to this level of freedom, Venice flourished and became a center of prosperity in the world at a time when the rest of Europe was still in the Dark Ages.

Venice’s currency, the ducat, even became a widely used reserve currency—ducats could be found in use as far away as Central Asia and China.

And all the opulence and beauty that you can still see in Venice today was essentially built in those times of economic freedom centuries ago.

Unfortunately not everyone was so keen to see mass prosperity.

A handful of wealthy families in Venetian society viewed the economy as a zero-sum game, as if someone else’s success were taking place at their expense.

Gradually they used their accumulated wealth

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Acropolis Now: Currencies & Crude Tumble But Stocks Levitate On Massive Short Squeeze

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Turmoiling markets… We love the smell of volatility in the morning…

Ari seems to sum up how the Greeks feel about Troika (and perhaps how the Germans feel about the Greeks)

Greek elections very definitely anti-status quo, Greek bank stocks and bonds crashing, re-plunging crude oil prices, a crashing Swiss Franc, Russian downgrade and collapsing Ruble, so BTFD in US equities…

Thanks to USDJPY…

As Small Caps were ripped…

Thanks to this… as Meghan Trainor might say, "it's all about the squeeze"… "Most Shorted" stocks were squeezed from the open and lifted 2% on the day – the 2nd biggest squeeze of the year (and 3rd biggest since Bullard's big save)…

With today's rally brought to us by Homebuilders and Energy stocks!! come the fuck on!

But the big moves were in FX markets again…

Which left The USDollar lower on the day…

Treasury yields traded in quite wide band – lower into the European open then higher through the US afternoon…

Copper magically managed to gain 1.6% as Crude and PMs slid…

Crude's early spike on Al-Badri's $200 oil comment was entirely reveersed later on…

Finally, we notice (h/t AY) that VIX futures net spec position is now its longest since Nov 2009…

Charts: Bloomberg

Lazy Greeks At Fault?? These Two Charts Suggest Otherwise!

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Thad Beversdorf via First Rebuttal blog,

Well things are gonna change in Europe.  Greece just voted in a majority no bullshit government.  These guys appear to be unimpressed by titles and focused on facts, as is discussed by Yanis Varoufakis, tipped to be Greece’s next Finance Minister, during an interview with UK’s Channel 4 News.  They seem to see things as right or wrong regardless of who’s mouth it’s coming from, which is great.  Now there is no such thing as a perfect politician and these fellas are left of left with a heavy socialist slant.  I obviously see no possibility of socialist ideology rebuilding a nation from the brink of bankruptcy.  That said, if this new government is loyal to the cause rather than the ideology, their integrity will get the job done.

But what is it that needs to get done in Greece?  That’s really the $64K question.  On the surface it seems as though Greece is simply a bunch of lazy sponges.  But I caution you to look at the facts before making a final judgement.  Remember Greece was once upon a time the genesis of democracy.  These people have been doing democracy longer than any other nation on earth.  And so I have a hard time accepting all of sudden after thousands of years they simply got too lazy to carry on the pride of the people who created the concept of a self-governed and free populace.  I just don’t buy it.  Let’s look deeper.

I was studying international economics in Oxford in 1999 and so was very keen on watching the debates surrounding the implementation of the Euro.  I remember even at the time there was tremendous controversy about what covenants were going to be placed on individual nations to ensure they all carried their own weight.  The difficulty with such a system is that you have very different industry strengths among the nation states and so to force a uniform set covenants seems to be heading toward disaster.  For instance look at the balance sheets of raw materials companies vs biotech firms.  If you forced all industries to have a uniform set of financial metrics it would end in disaster for some sectors while working well for other sectors.  The same is true on a macroeconomic level.  But don’t take my word for it.…
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Russia Slams S&P Downgrade For “Excessive Pessimism”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Well that didn’t take long. Russian Finance Minister Siluanov has responded to S&P’s “junk” downgrade of The Russian Federation:


Adding in his statement that he “sees no reason to dramatize” the situation, Siluanov adds that the cut should not have any serious effect on Russia’s capital markets. We assume by “dramatize,” he means – they wil not be ‘visiting’ the local ratings agencies offices for a chat anytime soon.

US Busts Alleged Russian Spy Ring In Manhattan

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Federal prosecutors in New York charged three men in an alleged Russian spy ring centered in Manhattan and the Bronx, according to a Jan. 23 complaint unsealed today by the office of Manhattan U.S. Attorney Preet Bharara. According to CNN’s Shimon Prokupecz, Evgeny Buryakov, working with Igor Sporyshev and Victor Podobnyy, was trying to recruit NYC residents as intelligence sources for the Russian Federation.

While pure speculation, this gentleman – a New York-based Russian banker with the same name – appears to be the recruiter…

“Buy The Dip” In Gold; BofAML Says EURUSD Bounces Should Be Sold

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

“Gold is consolidating before its larger bull trend resumes,” notes BofAML’s MacNeil Curry looking for a move to $1345 and beyond. But it is today’s modest bounce in EURUSD that they believe should be sold, and “seen as temporary and corrective of the larger bear trend.”

Via BofAML,

€/$ is correcting. Bounces should be sold.

€/$ is correcting higher.

 However, this bounce should be seen as temporary and corrective of the larger bear trend. Look for topping into the 1.1325/1.1559 zone (old channel support, now resistance) before the larger downtrend resumes.

The initial target is 1.1000, ahead of the Sep’03 low at 1.0765. Our long-term targets are 1.0588/1.0283 (secular channel support and Elliott Wave swing target). We look for greater signs of a base into here, not before. Bulls need a break of 1.1876 (old Jun’10 low) to indicate medium-term basing, while a break off 1.2235 (200m MA) is needed to confirm a turn in the medium- and long-term bull trends, neither of which is expected.

*  *  *

Gold consolidates before higher

Gold has been caught in a 4-day consolidation. While there is risk of a deeper pullback, weakness should be limited to the 1267/1253 area (old channel resistance, the Oct-21 high and 200d avg.). Into here, we look for a resumption of the larger bull trend toward the 1345 Jul’14 high and potentially beyond.

Buy dips. 

Spot The Uber Arbitrage

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Any time there is an “atmospheric anomaly”, one of the favorite pastimes of the otherwise bored punditry is to observe just how much Uber’s surge pricing will soar at any given time and place, and to respond with howls of indignation at the intersection of the supply and demand curves. Well, during today’s “Blizzard of 2015″, Uber’s “unfair” surge pricing model will be very much impaired in the city whose mayor some say is a “radical leftist” on par with Greece’s Tsipras.

From Bloomberg:

“We expect to have a serious problem on our hands,” New York City Mayor Bill de Blasio said at a press conference on Sunday. “We are facing one of the largest snowstorms in the recorded history of this city.” At 8:30 a.m. New York time, one Uber user tweeted a screen shot from his iPhone that showed Uber pricing — which usually fluctuates based on demand — at 2.9 times regular rates. Prices soon dropped to normal.

“Price gouging in the context of an emergency is illegal,” de Blasio said at a press conference Monday, encouraging users to report the practice to the Taxi & Limousine Commission.

Sure enough, the ratting out of Uber is doing miracles in the Nanny city, which moments ago blasted out the following:

Due to the State of Emergency declared in New York City, prices will not exceed 2.8x the normal fare.

This reflects Uber’s national policy developed with New York Attorney General Schneiderman that balances the goal of reliable transportation options with affordability during disasters: Anytime a disaster or state of emergency strikes, dynamic pricing is capped and all Uber proceeds will be donated to the American Red Cross to support relief efforts. On your receipt, you will see a donation from Uber to the American Red Cross.

And indeed, a screengrab taken moments ago of the surge pricing in one of New York City’s busiest regions reveals a modest 1.4x surge price hike:

However, a short trip across the river, in a different, unconstrained, city and state, reveals something quite different: the following (screengrab taken at exactly the same time as above):

How long until Goldman’s correlation desk finds a way to monetize the “Uber” arb?

As a reminder, this is what Uber says about
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Saxo Bank: The Syriza Victory Is A Disaster For Europe

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Saxo Bank's Steen Jakobsen via,

  • Greece in reality has little choice: Comply with the Troika or leave the EUR
  • Syriza's win is a disaster but at the end of day, Greece did what we expected them to do
  • Greece needs to pay EUR 22.3 billion in principal and interest on various loans 

The result was worse than expected whatever the final outcome – the anti-austerity vote is massive, but it could be an empty gesture as Greece in reality has little choice: Comply with the Troika or leave the EUR. I doubt the later will happen with the same vote as the Greeks are tired of austerity but not off being European.

EUR/USD is down 55 ticks as I write, at 1.1145. I expect Greek stock market will be down 5% tomorrow and that Europe overall could be down 2% unless Germany, the ECB and EU comes out supporting a move towards some compromise (which is unlikely this week)

Game theory dictates that some solution will be found which is sub-optimal for all parties, but the risk it will take longer than market have nerves for.

*  *  *

Syriza did better than expected – making negative reaction more likely

Syriza did better than even the polls suggested – the gap to ND is 10% as I write this, and for the market this is a close call as Syriza may get a mandate to rule alone. (Greek election: Syriza Party set to take power – Source Sky)

It's a disaster for "austerity" and common sense, but at the end of day, Greece did what we expected them to do: Desperation forced the voters into the arms of a left-wing government who's rhetoric reminds me of my youth (many decades ago) in the the 1970s: Comrades, capitalism, imperialism is some of the words I heard on TV interview this evening. It makes makes one smile: "What goes around, comes around".


 Syriza's gaining power is a disaster for austerity and common sense. Photo: Thinkstock
The answer to the market reaction lies in a very different place: most of debt has changed hands since this crisis started from local European banks to EU and ECB through

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The Timestamps Begin: “The Impact Of The Blizzard On Employment Will Be Near Zero”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Just because we enjoy collecting snippets of soundbites and information, especially when the originators of said soundbites do a U-turn a few weeks later, here are the first two “timestamps” regarding the impact of what may be the biggest blizzard (and certainly one of the Top 5) in New York city history.

First, from Stone McCarthy:

I have been getting a few inquiries as to how the impending snowstorm might impact on the January or February employment data.

Based on the timing of the storm I suspect the impact on the January employment data will be near zero. Conceivably, the hours worked data could be marginally influenced for those workers that miss some work in the days immediately ahead, but such would only show up for those workers who are paid on a monthly basis.

The reference period for the payroll or establishment data is the pay-period that includes the 12th of the month. Most workers are paid on a weekly, biweekly or semi-monthly basis. For these workers the late month snowstorm should be largely irrelevant. But, for the small percentage of workers who are paid monthly there could be some minor impact.

For the household survey the reference period is the week (as opposed to pay-period) that bridges the 12th of the month. As such impending storm should have zero impact on the January household data.

As for the impact on the February payroll and household employment data we wouldn’t expect much of an impact. The storm related dislocations would have to reach well into February to have a noticeable impact on the February data.

Which is great: after all that’s what seasonal adjustments are for, right? To adjust for things like the seasons.

And second, from everyone’s favorite groundhog nemesis:

Because sometimes it’s good to know where one stands, just in case we get a repeat of this:

The best news, of course, is that unlike last year, economists will not use such an unprecedented atmospheric phenomenon as snow in the winter, as justification for a $100 billion haircut to annualized GDP. Right?

Stab, er… I Mean… Beggar Thy Neighbor – It’s ALL OUT (Currency) WAR! Pt 2

Courtesy of ZeroHedge. View original post here.

Submitted by Reggie Middleton.

Here Comes The Boom!

By now, everybody who cares knows about the Swiss National Bank’s removal of its EUR floor, and the havoc that it caused to FX brokerages around the world (Currency Brokers Fighting Insolvency Are Learning the Value of Our Blockchain Technologies – the Hard Way). I explained to clients that what seemed like a stupid move by the SNB was actually a strategic move borne out of fear. Days later, the ECB came out with the QE package from hell (or heaven, depending on how you view perpetual bailouts), and my explanation gained lucidity for many.A single country devaluing, even if it’s a significant global economy such as the US, will result in a rise throughout other major currencies. This rise will easily be absorbed. The problem is when the major economies of the world have a singular problem – the problem that the world has now, that was started back in 2008. That problem is a structural recession and slow growth. Now when the US, or more accurately from a chronological perspective, the EU/ECB devalue, they export unemployment/deflation to neighboring states who not only do not want it but are actively pursuing their own policies to eradicate it. What do these states do when unemployment is sent over to their countries? They retaliate by doing the same. Enter… War!

Of course, the story doesn’t and there. This is a macro trader’s nirvana, provided he/she has at least a modicum of insight.

It’s All Out War!

As stated above, ECB President Mario Draghi, announced the deflation export attack on all nations who didn’t have the central banking chutzpah to defend themselves, and the throwing down of the gauntlet even to those who do, self-preservation concerns prompted preemptive strikes from…
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Zero Hedge

Seven Decades Of Data Prove This Is A Really Dumb Idea... (But They'll Do It Anyway)

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Simon Black via Sovereign Man blog,

Roman Mairano had just married his sweetheart, and now he was eager to find a way to support her and their future family.

Both he and his new bride had come from very humble backgrounds. And hoping to build wealth, he began looking for new opportunities.

Roman went to a few wealthy contacts in the city and pitched to them that he had a plan to transport lumber to a city where there was a great deal of construction happening.

He offered that if they would back his venture financially, ...

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Phil's Favorites

US Corporations Take Huge Losses on Venezuelan Currency

Courtesy of Mish.

When black markets in currencies develop, you can be 100% sure the official exchange rate is overinflated.

In Venezuela, the fixed rate of exchange is 6.3 bolivars to the dollar, the floating rate of exchange is 50 bolivars to the dollar, and the black market rate is 184 bolivars to the dollar. The latter is what the currency is really worth at the moment.

From 6.3 to 184 is a loss of 96.6%

Even at the floating rate of 50 bolivars to the dollar, Venezuela's currency woes an increasing threat to U.S. corporate profits.

  • Ford Motor Co on Friday said it was taking a pre-tax charge of $800 million for its Venezuela business. It blamed Venezuelan exchange control regulations that hav...

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All About Trends

Mid-Day Update

Reminder: David 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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Swing trading portfolio - week of January 26th, 2015

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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Sector Detector: With the Fed fading into shadows, investors look overseas for new catalysts

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

Courtesy of Sabrient Systems and Gradient Analytics

By Scott Martindale

Last week, the S&P 500 put an end to its streak of weekly losses, despite giving back some gains on Friday. Thursday provided the big catalyst, with the ECB’s announcement of its bold new monetary stimulus plan. Investors were cheered and soothed for the moment. And U.S. fundamentals still look strong. But with Greece trying to turn back time, with volatility elevated (and likely to continue as such), and with the technical situation still dicey, the near term outlook is still worrisome.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart...

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Chart School

Real Median Household Income: A Significant December Increase

Courtesy of Doug Short.

Summary: The Sentier Research monthly median household income data series is now available for December. The nominal median household income was up $537 month-over-month and $2,072 year-over-year. That's a 1.0% MoM gain and a 4.0% YoY gain. Adjusted for inflation, the numbers were up $738 MoM and $1725 YoY. The real numbers equate to a 1.4% MoM increase and a 3.3% YoY increase, thanks to -0.37% drop in the Consumer Price Index.

In real dollar terms, the median annual income is 5.1% lower ($2,900) than its interim high in January 2008 but well off its low in August 2011.

Background on Sentier Research

The traditional source of household income data is the Census Bureau, which publishes annual household income data in mid-September for the previous ye...

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Insider Scoop

UPDATE: Albert Fried Initiates Coverage On TubeMogul On Room For Share Growth

Courtesy of Benzinga.

In a report published Monday, Albert Fried & Company analyst Rich Tullo initiated coverage on TubeMogul Inc (NASDAQ: TUBE) with an Overweight rating and $23.00 price target.

In the report, Albert Fried & Company noted, “While TUBE shares are up 120% since the IPO the lock up expired on January 14, 2015, which means insider stock is potentially for sale. Despite the overhang, we think there is room for share growth as TUBE expands domestically, and globally and also as TUBE launches new applications such as Performance TV Ad buying. While the TUBE revenue model is complicated, we think investors will growth comfortable with the model as several industries such as Internet Search and the Oil Industry also have pass throughs. TUBE has less than 1% media buying ma... more from Insider

Market Shadows

Are You Trading or Gambling?


An interview with John Ehlers of Stock Spotter and Mesa Software

By Ilene

Ilene: John, in our last discussion about trading systems in general and yours in particular (Can trading be reduced to cycles, stresses and vibrations?) you mentioned Monte Carlo simulations and their use in measuring performance. Can you explain more about how you measure the performance of a trading system?

John: Let's start with comparing trading with gambling. The two have several things in common.  In both ...

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Digital Currencies

Jitters After Bitcoin Exchange Suspends Services

So as I was saying yesterday (Bitcoin: The Biggest Clown Show In History?), Bitcoin has several obstacles on the path to potential success as an alternative currency. But I forgot to mention hacking and theft at Bitcoin exchanges and other technical problems. This is related to the lack of government backing and the fact that the value of Bitcoins is based entirely on confidence.  

Jitters After Bitcoin Exchange Suspends Services 


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2015 - Biotech Fever

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

PSW Members - well, what a year for biotechs!   The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down!  The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months.  What could go wrong?

Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my is time that something is put together for PSW on biotechs in 2015.

Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies.  A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...

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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's this week's Stock World Weekly.

Click here and sign in with your user name and password. 



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Option Review

SPX Call Spread Eyes Fresh Record Highs By Year End

Stocks got off to a rocky start on the first trading day in December, with the S&P 500 Index slipping just below 2050 on Monday. Based on one large bullish SPX options trade executed on Wednesday, however, such price action is not likely to break the trend of strong gains observed in the benchmark index since mid-October. It looks like one options market participant purchased 25,000 of the 31Dec’14 2105/2115 call spreads at a net premium of $2.70 each. The trade cost $6.75mm to put on, and represents the maximum potential loss on the position should the 2105 calls expire worthless at the end of December. The call spread could reap profits of as much as $7.30 per spread, or $18.25mm, in the event that the SPX ends the year above 2115. The index would need to rally 2.0% over the current level...

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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

Thank you for you time!

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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