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And The Person Responsible For Japan’s Economic Endgame Is… Paul Krugman

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

There are two words that should strike fear in the hearts of any rational-thinking citizen of the world – Paul Krugman. Wondering why? As Alhambra's Jeff Snider notes, we already know of at least one respect where Krugman (as a stand-in at least for the Keynesian perspective that is somehow still widely shared, especially in the orthodox economist class) has impacted 'stimulus' activity, Sweden. And now his appearance in Japan enabled what Japanese economists call a "historic meeting," as Bloomberg reports that Abe met with the Nobel-prize winner for 40 minutes who "helped the prime minister make up his mind," that delaying the fiscally-responsible tax-hikes was the right thing to do (and increasing QQE) or Japan "wouldn’t escape deflation." Mission Accomplished… and if it fails, moar will be needed and 'capitalism' will be blamed.

 

As Bloomberg reports, with a December deadline approaching, Prime Minister Shinzo Abe was considering whether to go ahead with a 2015 boost to the consumption levy. Evidence was mounting that the world’s third-largest economy was struggling to shake off the blow from raising the rate in April, which had triggered Japan’s deepest quarterly contraction since the global credit crisis…

When Japanese economist Etsuro Honda heard that Paul Krugman was planning a visit to Tokyo, he saw an opportunity to seize the advantage in Japan’s sales-tax debate.

 

Honda, 59, an academic who’s known Abe, 60, for three decades and serves as an economic adviser to the prime minister, had opposed the April move and was telling him to delay the next one. Enter Krugman, the Nobel laureate who had been writing columns on why a postponement was needed.

 

Honda succeeded in organizing a 20-minute meeting between the prime minister and the U.S. economist. It went about double the allotted time.

 

“That nailed Abe’s decision — Krugman was Krugman, he was so powerful,” Honda said in an interview yesterday in the prime minister’s residence, where he has an office. “I call it a historic meeting.”

 

 

Krugman plays down his role, saying the Nov. 6 meeting with Abe “was very straightforward.”

 

“He had questions and I hope I answered them clearly,” Krugman said in a telephone interview yesterday. “I told him the kinds of things I’ve been writing


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The Need To Escape Collapsing Empires

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Jeff Thomas via Doug Casey's International Man blog,

We recently spoke with Ron Holland, an American expatriate living in Canada. Ron has had a successful and varied career in finance and is a prolific writer. He also supports global marijuana legalization and has served as a director of two cannabis startup companies.

Critically, Ron has for a longtime debamboozled himself from the government’s propaganda and, I believe, has an accurate perspective on the state of the world today. He is a strong believer in international diversification and the issues we frequently discuss.

The discussion is below; I think you will find it insightful.

*  *  *

Jeff Thomas: What is your present residential/citizenship situation worldwide?

Ron Holland: I’m an American citizen, living, working, and playing in Canada and elsewhere.

Jeff: What countries have you previously lived or spent significant time in?

Ron: I’m adopted, but I think I was born in North Carolina. I’ve lived in several countries: Switzerland; the US; and now Canada, plus I spent a lot of time in Colombia, Austria, and Italy. My favorite state is South Carolina, where I graduated from the University of South Carolina in banking and finance. Later I headed up a trust department and decades later retired to Hilton Head Island before getting bored and taking a position as CEO with a firm in Canada in 2011.

South Carolina has quite an independent spirit and has been a nation not once but twice, seceding first from the British Empire then later from the US following the election of Lincoln. As we all know, this didn’t work out too well, and one Washington supporter said, “South Carolina is too small to be a nation and too large to be a lunatic asylum.”

He was wrong. South Carolina is about the same size as Switzerland, which constantly ranks as one of the top nations in the world to live in. Small countries are the most prosperous in the world—consider the nations of Singapore, Liechtenstein, Qatar, Luxemburg, Brunei, San Marino, and of course Grand Cayman and Bermuda, which are not quite countries.

I believe aggressive empires with bloated bureaucracies, unsustainable debt loads, and chronic military overreach cannot compete
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“We Are Living In An Aberrational World”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Originally posted at Finanz und Wirtschaft,

The editor of the influential investment newsletter 'The High-Tech Strategist' warns of trouble in semiconductor stocks and spots bright investment opportunities in gold miners.

It’s unchartered territory: For the first time since more than half a decade the global financial markets are supposed to live without the constant liquidity infusions of the Federal Reserve. Fred Hickey, the outspoken editor of the widely-read investing newsletter 'The High-Tech Strategist', says this won’t work well for long. "By the end of this year or by the start of next year, without QE, the market is going down", says the sharply thinking contrarian. In his view, especially the outlook for semiconductor makers like Intel is gloomy. As protection against the upcoming crash he recommends investments in gold and in gold mining stocks.

Mr. Hickey, after the short setback in October the hunt for new records at the stock market is on once again. What’s your take on the current situation?
We are living in an aberrational world. It’s all driven by an orgy of money printing. All the major central banks are engaged in this. From the Federal Reserve in the United States to the ECB, to the Bank of England and the National Bank of Switzerland to the Bank of Japan and the People’s Bank of China. It’s been tried ever since there was money, but in thousands of years of history it has never worked. When the Roman empire was unraveling the Caesars would shave the silver from the coins in order to be able to make a lot more of them. And in Weimar Germany, Reichsbank president Rudolf Havenstein ran the printing presses day and night, seven days a week. And here we are now,  repeating the same mistake.

Yet, the markets love cheap money. The S&P 500 just climbed to another record high this Monday.
I lean towards the school of Austrian economists and they tell you that you can’t get out of those things. As a reminder, I keep the following quote from the great Austrian economist Ludwig von Mises pinned to the bulletin board in my office: "The final outcome of credit expansion is general impoverishment". Von Mises also warned that the boom can only last as long as the credit expansion progresses at an ever-accelerating pace. That’s why

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In Preparation For Tonight’s Ferguson Decision

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As America holds its breath for tonight’s (expected) grand jury verdict over the shooting of 18-year-old Michael Brown – by police officer Darren Wilson on August 9th – Missouri officials have said they have reached an understanding with protest leaders, as NY Times reports, on the conduct of demonstrations expected after the decision whether to indict Wilson or not comes down. Despite this ‘understanding’ it is clear that law-enforcement is ‘prepared’…

  • *ST. LOUIS MAYOR FRANCIS SLAY SPEAKS AT FERGUSON PRESS CONF.
  • *SLAY: NEED TO PLAN FOR FERGUSON PROTESTS REGARDLESS OF OUTCOME 
  • *SLAY: `IMPRUDENT’ NOT TO BE PREPARED FOR `WIDESPREAD UNREST’
  • *SLAY: VIOLENCE WILL NOT BE TOLERATED
  • *ISOM: POLICE DEPT. HAD SENSITIVITY TRAINING OVER PAST 100 DAYS
  • *ISOM: OFFICERS TRYING TO WORK ON RESTRAINT, HAVING PATIENCE
  • *SLAY: WILL GIVE PROTESTORS CHANCE TO COMPLY BEFORE ARREST
  • *SLAY: POLICE WILL RESPOND IF PROTESTORS BECOME AGGRESSIVE

 

As ABC News reports,

The FBI has sent about 100 agents to the St. Louis area to help deal with any problems that could arise from the grand jury decision in the police shooting of Ferguson teenager Michael Brown.

 

In addition to the FBI, other federal agencies have also mobilized staffers to get to St. Louis today, sources told ABC News.

And this…

 

As NY Times reports,

“If protesters are nonviolent, police will not be aggressive,” Mr. Slay said. “When demonstrators are being civilly disobedient, they will in most cases be given a chance to adhere to the law before being arrested. And then, if necessary, they will be arrested in a nonviolent manner.”

*  *  *





You’ve Been in This Business Too Long If…

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via ConvergEx’s Nick Colas,

Today we offer up a (hopefully) humorous note about the perils of a career in finance.  It’s not really the day to day chores that take a toll, after all – it is how this business pervades the rest of your life.  Over the years, your personal and professional decision making and communication skill sets merge into one, and it is the cold rationality of the latter that usually swallows the former.  And then lets out a large burp.  So if you’ve ever wondered what the stop-loss should be on a romantic relationship gone bad, or considered your emotions in terms of personal beta, this note is for you.  What follows is a top 10 list of challenges only people who have tied their personal fates to Wall Street will probably understand.  And for those of you who’ve managed to avoid these pitfalls, read on to see what you’ve been missing.  And pat yourself on the back.

After 30 years in and around Wall Street, I feel like damaged goods.  That’s not necessarily a complaint, but rather a simple and factual observation.  An example to illustrate the problem: I have mental stop losses for just about everything in my life.  If I have a bad meal at a restaurant, I never go back.  If a personal relationship goes south, I “Take it off my screen”.  Very few things have a second chance with me.  If it doesn’t work out, well, one and done…

That’s just one example of how my professional life has somehow subsumed the personal. Any decent trader will tell you that you must decide on a stop loss level before initiating any position. After all, the market knows more than you do.  You might have it right, or you might not. The asset’s price action will let you know soon enough either way.  And when it does, you should listen. Setting that stop takes away any emotional attachment you might have and leaves you free to go find something else that might work better.  At the same time, I know that treating people and relationships like positions on a trading pad is somehow… wrong.

My only solace is that I know I am not alone.  After thousands of conversations with colleagues and friends in the business over those…
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What Record Stock Buybacks Say About Economic Growth

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

For all the obfuscation surrounding the topic of stock buybacks and corporations returning record amounts of cash to their shareholders, the bottom line is as simple as it gets.

This is what you are taught in CFO 101 class:

  1. if you see organic growth opportunities for your business, or if you want to maintain the asset quality generating your cash flows, you invest in (either maintenance or growth) capex.
  2. if there are no such opportunities, you return cash to investors (or, maybe spend a little on M&A unless you are Valeant in which case you spend everything and then much more).

That’s it.

Well, based on this shocking chart from the FT’s John Authers, does it seem that America’s corporations - who are returning over a record 90% of Net Income to shareholders - are seeing (m)any growth opportunities?





Artist’s Impression Of “Change” After Obama’s Historic Immigration Decree

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Presented with no comment…

 

 

h/t @WeKnoWhatsBest





5 Things To Ponder: Rising Risk

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Lance Roberts of STA Wealth Management,

There are things going on with the financial markets currently that seem just a bit "out of balance." For example, asset prices are rising against a backdrop of global weakness, deflationary pressures and rising valuations. More importantly, there is a rising divergence between sentiment and hard data.

For example, on Thursday the Philadelphia Federal Reserve released their regional survey which showed that manufacturers are the most optimistic in the region in, well, ever. The surge in the "manufacturing" index from 20.7 to 40.8 comes against a backdrop of weaker industrial production during the last 3 months.

However, even more curious was that the surge in the manufacturing survey was offset by Markit's US Purchasing Managers Index which saw a decline to 10-month lows of 54.7 and has, like industrial production, fallen three months in a row. 

Markit-Industrial-Production-112014

Importantly, here are the "key points" from Markit that confirms much of my analysis regarding the impact of a strong dollar/weak global economy combination on U.S. exports.

"Output growth has now fallen for three straight months, taking the pace of expansion down to its lowest since the start of the year. Unlike January, however, this time the weaker rate of growth can’t be blamed on the weather.

 

Export market weakness holds the key to the recent slowdown, with manufacturers reporting the largest drop in export orders for nearly one and a half years.

 

There’s some reassurance from manufacturers continuing to boost their payroll numbers at a robust pace, but with backlogs of work showing almost no growth, the rate of job creation looks likely to moderate in coming months unless new order inflows pick up again.

 

The manufacturing and service sector PMI data available so far point to GDP growth slowing to around 2.5% in the fourth quarter."

While weather can't be blamed yet, it will likely be the main "excuse" in the months ahead as early record snowfall is already impacting economic production.

However, it isn't just the manufacturing data that seems "out of whack." Consumer sentiment about the economy has been surging in recent reports by Gallup, University of Michigan and the Census Bureau.

Consumer-Confidence-112014

However, while survey data shows consumers being more optimistic…
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“Gold Is Money And Nothing Else” – JP Morgan’s Full December 1912 Testimony To Congress

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

In December 1912, no lessor man than J.P.Morgan testified to Congress to “justify Wall Street,” during investigations over alleged manipulation and collusion. The transcript reads like it could have been given yesterday (as nothing ever changes) but at its heart the banker laid out 33 “Morgan Epigrams” which appear – in the ensuing 102 years – have been lost to greed and arrogance… The irony is wondrous: “Securities do not always prove good”, “Money is gold, and nothing else”, “I think manipulation is always bad.”

 

J.P.Morgan’s 33 Epigrams:

1. I have absolute faith in the patriotism and public spirit of the Stock Exchange.

2. The moral responsibility has to be defended as long as you live.

3. Securities do not always prove good.

4. It is difficult to get stockholders to take active interest in their companies.

5. I do not believe I could carry any question through any board against the views of the other directors.

5. I like a little competition, but I should rather have co-operation. Without actual control, you can do nothing.

6. I want to control nothing.

7. There is nothing in the world by which you can make a money trust.

8. I do not feel that I have vast power.

9. I do not think I have power in any department of industry; I am not seeking it, either.

10. All the money and all the banks in Christendom cannot control credit.

11. My firm is not run by me; I am not the final authority.

12. I believe in divided as against concentrated responsibility.

13. I do not compete for deposits.

14. I do not care whether they ever come, but they do come.

15. A bank, if it transacts its business right, will get its share of the business.

16. Nobody wants to put money into a new railroad in these times.

17. I always assist young men.

18. If it is good business for the interests of the country, I do it.

19. If I should attempt to tell where the money is in every transaction I make, I should have a hard time of it.

20. I did it because I thought it was the…
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Stocks Close At Recordest Highs As All Central Banks Go All In

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Despite the knee-trembling awesomeness of a double-whammy promise of liquidity, US equity markets ended the week on a decidedly down note. The realization that Draghi's all talk (no impact on US stocks) and PBOC's move is not a liquidity surge and has limited impact on the economy left stocks tumbling once the opening OPEX levels had printed. The USD rose notably on the day after EUR plunged under 1.24 on Draghi (USD +0.9% on the week). Despite USD strength, gold rose 1% (as did Silver) on the week, rising for the 3rd week in a row for the first time in 4 months (and the 3rd Friday surge in a row). Oil rose 1% on the week, breaking an 8-week losing streak but Copper prices fell around 0.3% on the week, having given back the kneejerk gains post-PBOC today. Treasury yields dropped after kneejerking higher on PBOC. 30Y at 3.01% had its 2nd lowest weekly close since May 2013. VIX melted down into the close to 13.01. Late-day buying panic lifts stocks off their lows leaving Dow & S&P at all-time recordest highs of all-time ever in history (as small caps closed red).

The last 4 weekly closes for the Russell 2000 are 1173.5, 1173.3, 1173.8, 1173.5

 

From Draghi/PBOC…

 

Cash markets were a one-way street from the smash OPEX open…bounced in their nornal Friday afternoon way BUT closed ugly…

 

On the week… Russell Red on the week

 

AUDJPY was the driver for US equity's surge… but JPY carry largely uncoupled after the US open…

 

And gold, Treasuries, and stocks decoupled on the day…

 

VIX melted down to 13.01 into the close to ensure every index closed green (as Nasdaq briefly trouched unch)

 

Credit and Treasuries notably decoupled on the week…

 

Treasury yields fell today after a modest kneejerk higher on the Draghi/PBOC headlines… 30Y yields closed at the 2nd lowest weekly close since May 2013.

 

FX markets saw major USD strength today led by EUR plunging back below 1.24 on Draghi's jawbone… 4th up week for USD in last 5

 

The USD strength did not weigh on precious metals which gained around 1% on the week after volatile days on Wednesday (FOMC Minutes) and today…
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Zero Hedge

And The Person Responsible For Japan's Economic Endgame Is... Paul Krugman

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

There are two words that should strike fear in the hearts of any rational-thinking citizen of the world - Paul Krugman. Wondering why? As Alhambra's Jeff Snider notes, we already know of at least one respect where Krugman (as a stand-in at least for the Keynesian perspective that is somehow still widely shared, especially in the orthodox economist class) has impacted 'stimulus' activity, Sweden. And now his appearance in Japan enabled what Japanese economists call a "historic meeting," as Bloomberg reports that Abe met with the Nobel-prize winne...



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Phil's Favorites

Nick Colas: Ten Signs You've Been on Wall Street Too Long

Uh oh, I was just driving in the car the other day explaining the three points about why one of the only worthwhile country songs, The Gambler, actually applies to everything in life from 1) the stock market (obviously) to 2) relationships to 3) career moves. My favorite observations are in bold. 

Nick Colas: Ten Signs You’ve Been on Wall Street Too Long

Courtesy of 

Nicholas Colas pens an opus this morning, out of nowhere. He’s clearly feeling introspective today…

***

After 30 years in and around Wall Street, I feel like damaged goods.  That&rs...



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Chart School

The Big Four Economic Indicators: Real Retail Sales

Courtesy of Doug Short.

Note from dshort: With yesterday's release of the Consumer Price Index for October, I've updated Real Retail Sales for October.

Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method.

There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process. They are:

  • Industrial Production
  • Real Personal Income (excluding Transfer Payments)
  • Nonfarm Employment
  • Real Retail Sales
  • ...

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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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    Market Shadows

    EZCH - Not So EZ Year

    EZCH - Not So EZ Year

    By Ilene 

    After a disappointing quarter and some probable tax-selling, EZchip might be a good turnaround for next year.

    So I'm thinking we'll sell a stock or two out of Paul's otherwise neglected Virtual Portfolio (check back) and add EZCH.

    ...

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    OpTrader

    Swing trading portfolio - week of November 17th, 2014

    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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    Sabrient

    Sector Detector: Investors make up new rules for their new market paradigm

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

    Courtesy of Sabrient Systems and Gradient Analytics

    By Scott Martindale

    Investors in U.S. equities seem to have embraced a new market paradigm in which upside spikes come more swiftly than the downside selloffs. Remember when it used to be the other way around? When fear was stronger than greed? The market is consolidating its gains off the early-October V-bottom reversal, and no one seems to be in any hurry to unload shares this time around, with the holidays rapidly approaching and all. After all, there are bright blue skies directly overhead giving hope and respite from the early freeze blanketing the country.

    In this weekly update, I give my view of the current market environment, offer...



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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.

    The newest Stock World Weekly is ready. Click here for the this weekend's reading and sign in with your PSW user name and password. 

    Picture credit: AnnaER at Pixabay. 

    ...

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    Digital Currencies

    Ukraine Central Bank Bans Bitcoin "To Protect Citizens" From Financing Terrorism

    If you would have supposed that Ukraine had enough problems to make banning bitcoins a backburner issue, you'd have been wrong. The rationale, "to protect consumers' rights" makes little to no sense... The other one, "to keep money in the country" makes more sense. 

    Ukraine Central Bank Bans Bitcoin "To Protect Citizens" From Financing Terrorism

    Courtesy of ZeroHedge. View original post here.

    The Hryvnia has collapsed to new record lows near 15/USD this morning. The Central Bank and bankers "agreed to keep UAH at 15-16/USD" but are &qu...



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    Option Review

    Yamana Gold call options sink

    Yamana Gold call options sink

    By Andrew Wilkinson at Interactive Brokers

    A four-year low for the spot price of gold has had a devastating impact on Yamana Gold (Ticker: AUY), with shares in the name down at the lowest price in six years. Some option traders were especially keen to sell premium and appear to see few signs of a lasting rebound within the next five months. The price of gold suffered again Wednesday as the dollar strengthened and stock prices advanced. The post price of gold fell to $1145 adding further pain to share prices of gold miners. Shares in Yamana Gold tumbled to $3.62 and the lowest price since 2008 as call option sellers used the April expiration contract to write premium at the $5.00 strike. That strike is now 38% above the price of the stock. Premium writers took in around 16-cents per contract o...



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    Pharmboy

    Biotechs & Bubbles

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

    Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

    First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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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 jennifersurovy@yahoo.com 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.

    http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

    Thank you for you time!




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    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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