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Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.

Earnings Have Peaked… and a Dropping For the First Time since 2008

Courtesy of ZeroHedge. View original post here.

Submitted by Phoenix Capital Research.

Earnings may very well have peaked.

MarketWatch notes that adjusted profits (even after all of the accounting gimmicks), FELL last year. This is the first time this has happened since we entered the alleged “recovery.”

For the full year, adjusted profits slipped 0.8% to $2.09 trillion. The last time profits fell was in 2008 when a recession was in full swing. Banks and other finance companies showed lower earnings, while nonfinancial firms modestly increased profits. Profit figures are adjusted for depreciation and the value of inventories.


            Source: Marketwatch

Bear in mind… earnings are overstated. Indeed, a study performed by Duke University found that roughly 20% of publicly traded firms manipulate their earnings to make them appear better than they really are. The folks who were surveyed for this study about this practice were the actual CFOs at the firms themselves.

These practices have only worsened since the “crisis ended.” Corporations have been reducing loan loss reserves, buyback shares via debt, and axing jobs en masse in efforts to juice earnings as high as possible.

This has resulted in the HIGHEST corporate profit/ GDP ratio since the Feds began tracking this metric in the 1940s:

Put simply, corporate profits are at a record high relative to the economy… and they just began to roll over.

Take a look at the below chart showing current stock levels and changes in forwards Earnings Per Share (EPS). Note, in particular how divergences between EPS and stocks tend to play out (hint look at 2007-2008).

We all know what came next.

If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis "Round Two" Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.

You can pick up a FREE copy at:

Best Regards

Phoenix Capital Research

Despite Abysmal Weather, Feb Pending Homes Sales Surge By Most In 9 Months

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Putting the last nail in the coffin of "the weather is to blame" meme, pending home sales surged in the abysmal weather conditions of February by the most since May 2013. Up 12% YoY, any rational economic being would be hard pressed to explain how the weather is impacting the economy when brave home-buying souls ventured out in such masses to buy… as The Midwest region saw the biggest surge in sales… up a stunning 11.6% MoM.

NAR has rotated rapidly away from the weather meme…

Last week's existing home sales miss brought us this excuse…

NAR's Larry Yun: “Severe below-freezing winter weather likely had an impact on sales as more moderate activity was observed in the Northeast and Midwest compared to other regions of the country."

And now…

NAR's Larry Yun: “Pending sales showed solid gains last month, driven by a steadily-improving labor market, mortgage rates hovering around 4 percent and the likelihood of more renters looking to hedge against increasing rents,”

Charts: Bloomberg

Germanwings Co-Pilot Head Been Treated For “Suicidal Tendencies” In The Past

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The horrible events of last week just go from bad to worse, if that is possible, as investigators dig further into the disturbed past of murderous co-pilot Andreas Lubitz and find more problems, as Reuters reports:


Reports have suggested he was troubled by his sexuality and also seeking treatment for vision problems. While careful to note that recent treatments suggested no suicidal tendency, this merely raises questions about historical screening and ongoing monitoring among a group of people who are ultimately responsible for the lives of many others… especially after finding “a small mountain of anti-depressants” in his apartment.

Headlines (via Bloomberg)


*  *  *

As IBTimes reports,

The 27-year-old co-pilot Andreas Lubitz believed to have deliberately crashed Germanwings Flight 4U 9525 plane, killing 149 passengers, trawled gay porn websites and sites relating to suicide, investigators have revealed.

He also feared losing his eyesight and was suffering from depression.

A police source in Dusseldorf revealed: “We have a team disassembling his computer, and that of his girlfriend, because the information that we received was that he trawled the dark side of the web visiting, among other things, sites containing gay porn, suicide themes and sexual perversions.”

The reports emerged after police started examining documents and a computer from his flat in Dusseldorf – the same one where ripped-up sick notes were discovered in the rubbish.

Reports have suggested he was troubled by his sexuality and also seeking treatment for vision problems. Lubitz had recent hospital treatment for his eyesight, according to officials close to the German investigation.

It was also revealed that the 27-year-old was treated by four psychiatrists in the months leading up to the fatal plane crash, reported the Sun.

A “small mountain” of drugs believed to be antidepressants were found at Lubitz’s apartment.

*  *  *

$20 Oil Looms As Iran-Nuclear Deal Nears Deadline

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As the deadline for Iran nuclear talks looms, the possibility of a deal which in some way lifts crude export sanctions is starting to be realized. As we warned 2 weeks ago, despite all the rhetoric, a confluence of political factors makes a deal highly likely at this point; and as The Telegraph reports, Iran is a sleeping oil giant holding 9% of the world’s proven oil reserves and with an estimated 2m barrels per day of excess supply already sloshing around international markets, any significant increase in Iranian output could easily trigger a further rout in prices. While OPEC may well clamp down on this in June, as The Telegraph concludes, by then a barrel of oil may already be selling for $20.

Crude rejects Yemen premium and starts pricing in the supply from an Iran deal…

As we explained previously, a confluence of political factors makes a deal highly likely at this point however.

Firstly, the USA has a stated policy of pivoting from the Middle East and Europe toward Asia. There are a number of reasons for this, but the major one is that the rebalancing of China is likely to be a fraught affair and nobody can forsee the outcome. As such, the USA would prefer a balance of power stabilising the Middle East, of which Iran and Iraq form an important part.

Second, a number of traditional Middle Eastern alliances such as have been frayed in recent years due to certain conflicts and clashes on a leadership basis. This is not to say that Iran, who are leading the fight against ISIS, are a prospective ally, but they may no longer be part of a defined Axis of Terror.

Third, President Obama is a final term President looking for some final wins. The recent letter from 47 letters in which they claimed to have the power to rewind any Iran deal ironically highlighted his ability to push through a deal if he chose on the response, with a range of parties, from Iranian lead negotiator Zarif to US government officials pointing out that any agreement would be bilateral and binding and that Obama has the power to put this in place. This has been our view for some time as the persistence of multilateral agreements,

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US Savings Rate Jumps To Highest Since 2012 As Spending Continues To Miss Expectations

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

For the 4th month in a row, personal spending growth missed expectations. With a 0.1% gain in February (against expectations of a 0.2% rise), this growth rate remains below all of 2014′s growth. Income rose slightly more than expected at 0.4% (against +0.3% exp) but this is the same growth as January’s upwardly reviused +0.4%. That leaves the powers that be very disappointed as the savings rate jumps to the highest since 2012, not exactly the Keynesian pump-primed, low gas prices tax cut spendfest all the smartest people in the room promised.

Spending misses for 4th month in a row.

Leaving the savings rate surging to the highest since 2012. What is ironic is that since this is a goalseeked data point, and one which was massively revised lower in the end of 2014 since the BEA was unable to account for Obamacare spending, expect this to eventually be revised far lower once again.

For now, however, the divergence grows.

Even as spending on goods, both durables and non-durable, has gone exactly nowhere in recent months…

… as Americans continue spend the bulk of their meager disposable income only on services.

Bottom line, expect another avalanche of downward GDP revisions, with all eyes on the Atlanta Fed which will have no choice but to cut its Q1 GDP to 0.0% now, or even push it negative.

A Rare Goldman “Sell” Recommendation Leads To Even More Muppet Slaughter

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

In addition to Janet Yellen’s confused ramblings at 3:45 pm on Friday, which did all they could to push the S&P to close green for the year, the other catalyst that sent stocks higher on Friday afternoon was the unconfirmed rumor reported by the WSJ that Intel would purchase Altera, the news of which briefly sent INTC stock higher than the entire market cap of Altera on what can only be described as the latest short squeeze. Yet one entity that appears unhappy with this news is none other than Goldman Sachs which likely was snubbed as an advisor or an underwriter by Intel in recent months, and which all else equal, once again slaughtered the muppets who listened to its recommendation to Sell Intel stock (just days after another comparable slaughter by Goldman on SanDisk longs this time on the Conviction Buy side).

Here is the Goldman bottom line to Kermit:

On Friday afternoon, the Wall Street Journal reported Intel may be considering the acquisition of Altera but provided no additional information. Recall that Altera is a provider of programmable logic chips into the communications infrastructure, networking, and industrial end markets. For context, the median semi deal has been done at a 35% equity premium and 22X NTM EPS (vs. ALTR trading at 22X 2015E as of 3/26 close) and 10X NTM EBITDA (vs. ALTR at 16X 2015E).

Our 12-month price target is $23, based on 10X normalized EPS of $2.30.

The good news that fading Goldman is becoming rapidly the most profitable trade since we discovered the gem that is MacNeil Curry. Expect a posting by an anonymous and overly defensive Vampire Squid defending Goldman’s sellside practices in the Brookings Institution blog in the coming weeks.

Frontrunning: March 30

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

  • Setbacks and progress as Iran, six powers meet to end nuclear impasse (Reuters)
  • Russia’s Foreign Minister Sergei Lavrov to Leave Iran Nuclear Talks (WSJ)
  • Obama Ramps Up Lobbying on Iran as Deadline Looms (WSJ)
  • Greek yields edge up as lenders scrutinise reform pledge (Reuters)
  • Oil prices drop on possible Iran deal, dollar (Reuters)
  • Yemen’s Houthis Battle for Aden as Saudi Strikes Hit Rebels (BBG)
  • Iran nuclear deal to see $20 oil if Tehran floods crude market (Telegraph)
  • China’s Zhou Says PBOC Has Room to Act on Growth Slowdown (BBG)
  • Just what autism nation needs: It’s Really Here: TV for Babies (WSJ)
  • How DIY Bond Traders Displaced Wall Street’s Hot Shots (BBG)
  • Greece’s Tsipras to Address Lawmakers on Creditor Talks (BBG)
  • FDA ‘Taking a Very Light Touch’ on Regulating the Apple Watch (BBG)
  • Oil Speculators Focused on Glut Miss Surge as Bombs Hit Yemen (BBG)
  • Why are interest rates so low? (Ben Bernanke)

Overnight Media Digest


* BabyFirstTV, which is owned by BFTV LLC, is making its way into more U.S. homes after cutting deals with pay-TV distributors including Time Warner Cable and is aiming its programming at children as young as six months. (

* Ford and General Motors, two biggest U.S. auto makers will unveil new passenger cars at the New York International Auto Show later this week. (

* Facebook Inc is hiring in Hong Kong and has tapped a second local partner to reach advertisers and is waging a charm campaign to draw more business from Chinese companies, even though Chinese users can’t access its service. (

* Reynolds American Inc and Lorillard Inc. are expected to meet this week with members of the Federal Trade Commission ahead of a final decision by the agency on whether to allow the companies to merge, according to people familiar with the matter. (

* EIG Global Energy Partners agreed to invest $1 billion in Breitburn Energy Partners LP, a publicly traded oil and gas exploration and production company, as energy producers turn to alternative capital sources in an effort to bolster their balance sheets amid slumping oil prices. (


Britain’s opposition Labour Party leader Ed…
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Ben Bernanke Pens First Blog Post, Defends Fed, Says He “Was Concerned About Seniors”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

It would appear the $250,000/hour speaking opportunities for Ben Bernanke have ground to a halt, and as such, the former Chairsatan has decided to dispense his wisdom for free to anyone who cares, by becoming a blogger at Brookings. And, not surprisingly, in his first post, the person who less than a decade ago said the following, in exactly those words…

Well, I guess I don’t buy your premise. It’s a pretty unlikely possibility. We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.

… is out and about defending the Fed and central banks from pushing rates so low, in Europe you are now paid to borrow money, and are charged to save.

So, to those who are too lazy to click on the following link to the Brookings blog where Bernanke is now blogger emeritus, here is the punchline.

In what can only be described as a litany of defensive insecurity, Bernanke launches a full-on assault on all those who accuse the Fed of crushing the economy, which now includes not only tin-foil fringe blogs of the Austrian economics persuasion, but such “very serious people” as Guggenheim’s CIO Scott Minerd who over the weekend said The long-term consequences of global QE are likely to permanently impair living standards for generations to come while creating a false illusion of reviving prosperity” and rhetorically asks “Why are interest rates so low? Will they remain low? What are the implications for the economy of low interest rates?

His response to this rhetorical question, is the following: “If you asked the person in the street, “Why are interest rates so low?”, he or she would likely answer that the Fed is keeping them low. That’s true only in a very narrow sense.”

Actually, it is true inn every sense. What is Bernanke’s loophole? He introduces the concept of the equilibrium real interest rate. In Bernanke’s words:

Except in the short run, real interest rates are determined by a wide range of economic factors, including prospects for economic growth—not by the Fed.

To understand why this

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Futures Jump On Chinese Easinng Speculation, False Rumor Of PBOC Rate Cut

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

With the rest of the developed world’s central banks waiting for the Fed to admit defeat for one more year and delay its proposed rate hike (or launch NIRP/QE4 outright) it was all about China (the same China which a month ago we said would launch QE sooner or later) and hope that its central bank would boost asset prices, when over the weekend the PBoC governor hinted that more easing is imminent to offset the accelerating drag after he admitted that the nation’s growth rate has tumbled “a bit” too much and that policy makers have scope to respond. How much scope it really has now that its bad debt is rising exponentially is a different question. It got so bad, Shanghai Securities News leaked a false rumor earlier forcing many to believe China would announce an unexpected rate cut as soon as today, in the process sending the Shanghai Composite soaring by 2.6%.


This was promptly denied:


… But the momentum for the dumb money (and we mean dumb money: remember that 30% Of New Equity Investors In China Have Elementary Education Or Less, Bloomberg Says) was already in place, and the already unprecedented Chinese stock bubble just got that much bigger and that much closer to popping.

For now, algos don’t care, and the surge in China was quickly carried over to Europe and the US, both of which have seen substantial strength across equity markets, even as the German 10Y Bund dropped to 0.18% earlier, now that every single bank is fighting every other single bank for what little unencumbered “high quality collateral” remains.

But if China’s rumors were positive for stocks, oil couldn’t care less and Brent extended Friday’s selloff into a second day, falling below $56/bbl amid indications bearish pressure from Iran nuclear talks is building, and the upside related to the Yemen proxy war is fading. WTI outpacing Brent decline.

“Further downward pressure may come at any time from a nuclear agreement with Iran,” says Societe Generale head of oil mkt research Michael Wittner. “Talks are reportedly intense, with twists and…
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Zero Hedge


Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.


more from Tyler

Phil's Favorites

UBS on the Driver for Gold: What is Gold About to Tell Us?

Courtesy of Mish.

An interesting article came my way from UBS analyst Julien Garran on the driver for gold. I do not have a link to share so excerpts will have to do.

Garran's article is one of the better one's I have seen. Unlike others, Garran does not cite jewelry, mining capacity, central bank purchases or sales or other similar (and wrong) notions that unfortunately are widespread among most analysts.
Commodities & Mining Q&A (by Julien Garran)

Q1. What drives gold?
A1. In the past, we’ve argued that international US$ liquidity is fundamental to calling first gold and then the industrial miners. In this note, we go a step deeper, arguing that gold is a call on excess returns in the US economy, the policy response and finally the impact on that policy on international US$ liquidity.

Q2. What is gold about to...

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Chart School

Market Cap to GDP: The Buffett Valuation Indicator

Courtesy of Doug Short.

Note from dshort: This update includes the Q4 Third Estimate of GDP and the alternate version with the First Estimate of the Q4 GNP divisor.

Market Cap to GDP is a long-term valuation indicator that has become popular in recent years, thanks to Warren Buffett. Back in 2001 he remarked in a Fortune Magazine interview that "it is probably the best single measure of where valuations stand at any given moment."

The four valuation indicators I track in my monthly valuation overview offer a long-term perspective of well over a century. The raw data for the "Buffett indicator" only goes back as far as the middle of the 20th century. Quarterly ...

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Swing trading portfolio - week of March 30th, 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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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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Watch the Phil Davis Special on Money Talk on BNN TV!

Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene


The replay is now available on BNN's website. For the three part series, click on the links below. 

Part 1 is here (discussing the macro outlook for the markets) Part 2 is here. (discussing our main trading strategies) Part 3 is here. (reviewing our pick of th...

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Sector Detector: Bulls retake the wheel, with a little help from their friends at the Fed

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

Courtesy of Scott Martindale at Sabrient Systems

Well, it didn’t take long for the bulls to jump on their buying opportunity, with a little help from the bulls’ friend in the Fed. In fact, despite huge daily swings in the market averages driven by daily news regarding timing of interest rate hikes, the strength in the dollar, and oil prices, trading actually has been quite rational, honoring technical formations and support levels and dutifully selling overbought conditions and buying when oversold. Yes, the tried and true investing clichés continue to work -- “Don’t fight the Fed,” and “The trend is your friend.”

In this weekly update, I give my view of the cur...

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Digital Currencies

Bitcoin vs. Uber: Bitcoin Lovers Respond to Mish

Courtesy of Mish.

I recently commented that it would not surprise me if bitcoin plunged to $1.00. That was not a prediction, it was a comment.

Still, I still feel a collapse in bitcoin is likely.

For discussion, please see Cash Dinosaur: France Limits Cash Transactions to €1,000, Puts Restrictions on Gold; Bitcoin End Coming?

In response, reader Creighton writes ...

Hello Mish

While I'm not going to argue the point about the possibility that Bitcoin drops to $1, or less, (that could happen yet, but not for the reasons you propose) I felt it necessary to point out something you seem to have overlooked.

While it's likely that the US government watching Bitco...

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Market Shadows

Kimble Charts: South Korea's EWY

Kimble Charts: South Korea's EWY

By Ilene 

Chris Kimble likes the iShares MSCI South Korea Capped (EWY), but only if it breaks out of a pennant pattern. This South Korean equities ETF has underperformed the S&P 500 by 60% since 2011.

You're probably familiar with its largest holding, Samsung Electronics Co Ltd, and at least several other represented companies such as Hyundai Motor Co and Kia Motors Corp.


more from Paul

Option Review

Cypress Semi Draws Bullish Option Plays

Bullish trades abound in Cypress Semiconductor options today, most notably a massive bull call spread initiated in the July expiry contracts. One strategist appears to have purchased 30,000 of the Jul 16.0 strike calls at a premium of $0.89 each and sold the same number of Jul 19.0 strike calls at a premium of $0.22 apiece. Net premium paid to put on the spread amounts to $0.67 per contract, thus establishing a breakeven share price of $16.67 on the trade. Cypress shares reached a 52-week high of $16.25 back on Friday, March 13th, and would need to rally 4.6% over the current level to exceed the breakeven point of $16.25. The spread generates maximum potential profits of $2.33 per contract in the event that CY shares surge more than 20% in the next four months to reach $19.00 by July expiration. Shar...

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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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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...

Learn more About Phil >>

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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.

Market Shadows >>