Archive for the ‘High Mailing Priority’ Category

As Fed ‘returns to normal,’ is the risk of recession rising? Experts react

 

As Fed 'returns to normal,' is the risk of recession rising? Experts react

Courtesy of Sheila TschinkelEmory University and William D. LastrapesUniversity of Georgia

File 20170615 26091 1bokz3

Fed Chair Janet Yellen speaks at a press conference following the rate-hike decision. AP Photo/Susan Walsh

Editor’s note: The Federal Reserve’s policy-setting committee raised its benchmark interest rate by a quarter-point to a range of 1 to 1.25 percent, the second increase this year. The central bank also indicated that it will likely lift rates once more this year. Given that these developments weren’t exactly a shock, we asked a couple of Fed experts what was noteworthy about the announcement.

What’s the real risk

Sheila Tschinkel, Emory University

The Fed’s decision to raise the federal funds rate was no surprise to financial markets. Nor was its expectation of one more hike this year.

Even though core inflation has been below its 2 percent target, the economy’s underlying strength suggests little or no risk of recession or deflation.

The Fed also said it is ready to begin reducing its holdings of government and other securities later this year. As a result of “quantitative easing” – the purchase of mortgage-backed and government securities to reduce long-term borrowing costs – and other measures aimed at preventing a collapse of the financial system, the value of assets on its balance sheet ballooned to US$4.47 trillion from $915 billion at the end of 2007.

The Fed seems to believe the bigger risk, actually, is that the economy could overheat, particularly if ultra-low rates are combined with government stimulus (which is still up in the air). The upshot is that the Fed seems pretty confident in the economic recovery and thinks it’s time to “begin the return to normal.”

Still, economic growth remains lower than many – including me – would like. It’s ranged from a disappointing 1 percent to 2 percent for the past few years.

The bigger risk facing the Fed might be that the economy is fundamentally not as strong the central bank believes it is. In that case, if the…
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The Era of Irrational Apathy

 

The Era of Irrational Apathy

Courtesy of Cullen Roche, Pragmatic Capitalism

Here’s a great post from Josh about the stock market’s general apathy that got me thinking about the macroeconomic picture.  The post-crisis period has been a pretty extraordinary economic environment. What many people thought was a foray into a Great Depression style era has actually turned out to be a pretty amazing recovery. Check out some of these stats:

One of the general themes of this blog has been the focus on all the bearish BS that people promote that just isn’t true. Yeah, I’ve busted waaaaaaaay too many of these nonsensical myths. But despite my efforts there is still a general sense of apathy out there. It’s nowhere more obvious than in the political climate. Yeah, there are things to be pissed off about, but they’re mostly distributional issues like income and wealth inequality, which are policy problems and not general economic problems.

Anyhow, don’t let the era of irrational apathy get you down. As Louis CK once said, “everything’s amazing and nobody’s happy”. So yeah, the next time you’re sitting on a toilet reading your mobile phone at 30,000 feet just remember that things aren’t really that bad.²

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PhilStockWorld.com Weekly Trading Webinar

 

PhilStockWorld.com Weekly Trading Webinar – 06-15-17

For LIVE access on Wednesday afternoons, join us at Phil's Stock World – click here

Major Topics:

00:02:43 Checking on the Markets
00:04:25 S&P 500
00:16:46 LTP
00:19:00 SPX
00:23:34 AAPL Trade Ideas
00:32:53 IWM Charts
00:34:25 Russell 2000
00:38:00 TZA Charts
00:40:27 Gasoline RBOB
00:43:11 Checking on the Markets
00:52:37 USD Charts
00:57:49 Nasdaq
01:04:09 ABX
01:13:33 Butterfly Portfolio
01:15:39 AAPL Charts and Trade Ideas
01:23:54 MSFT
01:25:20 GIS
01:32:29 Trade Ideas – Butterfly Portfolio
01:42:24 Checking on the Markets
01:44:35 EWZ
01:50:31 More Trade Ideas

Phil's Weekly Trading Webinars provide a great opportunity to learn what we do at PSW. Subscribe to our YouTube channel and view past webinars, here. For LIVE access to PSW's Weekly Webinars – demonstrating trading strategies in real time – join us at PSW — click here!





Chaos – and disturbances – in the Oval Office

 

Chaos – and disturbances – in the Oval Office

Courtesy of David BrinContrary Brin

[David Brin is an astrophysicist whose international best-selling novels include The Postman, Earth, and 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. Dr. Brin's nonfiction book, The Transparent Society, won the Freedom of Speech Award of the American Library Association. Find more at David Brin's Contrary Brin blog and website — biography, books, and short stories.]

The good news? Donald Trump is behaving so incoherently, unable to parse sentences, claiming to have coined phrases like “pump-priming,” announcing to the nation that “no one knew” that Abraham Lincoln had been a Republican, and changing his story about firing the FBI director within hours. You know I could go on and on with examples… like covfefe… any one of which would have put DT’s supporters in a tizzy, if they saw it done by a Democrat.

Putting that hypocrisy aside, there is a silver lining to this behavior. It means our protectors – the grownups – are fully warned. The adult men and women in the intelligence and law communities, civil service and military officer corps are already mentally prepared to do their duty, if something outrageous tips over into threatening – instead of just irritating or infuriating – the republic.

This is why I recently posted a plea for folks not to push hard for impeachment! (See below.) I gave a dozen reasons, any one of which should convince, including the mob of highly disciplined and leak-proof Dominionist fanatics that would enter the White House with a President Pence.  But the biggest reason is, again, the skill and professionalism of our protector caste. 

Aside: A dozen years ago, after a speech at an alphabetical and secret agency, I asked a couple of senior guys the following question: “I know you can’t answer this, but do you have a group or division charged with watching out for subornation of high officials of the United States?” From puzzled looks, I realized that the word “subornation” seemed strange to them, despite the fact that this method was used…
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Unmissable

 

Unmissable

Courtesy of 

Three unmissable reads I wanted to highlight – above and beyond my typical morning links…

Ben Carlson’s new one for Bloomberg View is about preparation: “Adjust your expectations for market turmoil before it occurs, not during or after the fact.” Here are some ideas about how to do that: 

Prepare Now for the End of the Bull Market (Bloomberg View)

***

Michael Batnick has this thing up about the new all-time high in the S&P 500 that was 1375 trading days in the making. It brought out a lot of top callers back in 2013. Four years and another 148 new record high closes later and they still haven’t stopped.

All-Time High (The Irrelevant Investor)

***

“Tell someone that everything will be great and they’re likely to either shrug you off or offer a skeptical eye. Tell someone they’re in danger and you have their undivided attention.” Reading Morgan Housel is like eating your vegetables, except the vegetables turn out to be both delicious and good for you. This is great:

The Seduction of Pessimism (CollabFund) 

So good, whole crew spittin hot fiyah.

****

All-Time High

Courtesy of 

On the final trading day of the first quarter in 2013, the S&P 500 made an all-time closing high. Five and a half years and 1375 trading days had passed since that last happened.

On March 28, 2013, stocks wrapped up their strongest first quarter since 1998 and the S&P 500 (SPY) was up 149% from the lows. Banks in Cyprus had been closed for a couple of weeks, jobless claims were 357k, and GDP was growing at 0.4%. And of course, the Fed was either being given credit or blame for all of this, depending on which side of the fence you were on. It was perfectly reasonable to wonder how much further this thing could go.

Four years later, we have the answer to that question. The S&P 500 (with dividends) has added another 70% since it’s first new all-time


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Head Fakes Surprise as Stocks Hit Highs

 

Head Fakes Surprise as Stocks Hit Highs

Courtesy of Wade Slome of Investing Caffeine 

In a world of seven billion people and over 200 countries, guess what…there are a plethora of crises, masses of bad people, and plenty of lurking issues to lose sleep over.

The fear du jour may change, but as the late-great investor Sir John Templeton correctly stated:

“Bull markets are born on pessimism and they grow on skepticism, mature on optimism, and die on euphoria.”

And for the last decade since the 2008-2009 Financial Crisis, it’s clear to me that the stock market has climbed a lot of worry, pessimism, and skepticism. Over the last decade, here is a small sampling of wories:

With over five billion cell phones spanning the globe, fear-inspiring news headlines travel from one end of the world to the other in a blink of an eye. Fortunately for investors, the endless laundry list of crises and concerns has not broken this significant, multi-year bull market. In fact, stock prices have more than tripled since early 2009. As famed hedge fund manager Leon Cooperman noted:

“Bull markets don’t die from old age, they die from excesses.”

On the contrary to excesses, corporations have been slow to hire and invest due to heightened risk aversion induced by the financial crisis. Consumers have saved more and lowered personal debt levels. The Federal Reserve took unprecedented measures to stimulate the economy, but these efforts have since been reversed. The Fed has even signaled its plan to reduce its balance sheet later this year. As the expansion has aged, corporations and consumer risk aversion has abated, but evidence of excesses remains paltry.

Investors may no longer be panicked, but they remain skeptical. With each subsequent new stock market high, screams of a market top and impending recession blanket headlines. As I pointed out in my March Madness article, stocks have made…
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Calm the f*** down

 

Calm the f*** down

Courtesy of 

“THE TECH WRECK STRETCHES INTO DAY TWO AS LARGE CAP TECHNOLOGY STOCKS….”

Okay stop. The stocks in question – software, chips, phones, networking, wireless equipment, whatever – these things are all $50 billion to $750 billion market caps. They’ve gone up between 20 and 70 percent this year. Literally, year-to-date.

You’re talking about a name like Apple, it goes up 30 percent in a straight line for almost six straight months and then declines 6 percent from that peak in a program-trading rotation.

Well? What exactly did you think would happen? Another 30 percent rally on top of 30 percent? You thought these were one-way trades?

Even LeBron gotta sit on the bench sometimes.

Meanwhile, the rest of the S&P 500 is awash in new all-time record highs – hotels, fast food, aerospace and defense, insurance, asset management, you name it.

And besides, take a step back and look at the last six months – here’s the quilt, dating back to just before the start of this year. You’d have to have been allergic to money to have missed out on this (click to embiggen):

The lightest green boxes represent stocks with gains north of 24 percent for the six month period. And there’s a ton of light green, in nearly every sector save for Basic Materials (‘member the Trump Trade? LOL).

Okay, so now what? Does the “tech wreck”, which so far looks like an ordinary rotation (albeit a quick one) end up dragging down the rest of the market? Or does the cash resulting from tech selling continue to boost the rest of the equity market?

Depending on your timeframe and strategy, getting this question right either means everything or nothing at all.

Know what kind of investor you are before coming into contact with just the latest bout of hysteria in an endless cycle of it.

And calm down.

***

[Picture: Source.]





AAPL Loses $50BN In Market Cap As Citi Piles On: Cuts EPS, iPhone Sales Forecast

Courtesy of Zero Hedge

The Apple pile up continues.

After Mizuho downgraded and cut its price target on Apple overnight, following in the footsteps of Pacific Crest from a week ago, we said that "after last Friday's tech sector drubbing we expect more such downgrades in the days to come" and we did not have long to wait: shortly after Citi's Jim Suva also said that he is lowering his September estimates for iPhone units, total revenues and EPS. Specifically, Citi has cut September iPhone unit estimates to 40 mln while December unit estimates increased to 89 mln. This compares with consensus at 47 mln and 83 mln respectively. For FY2017, Citi’s iPhone units and ASPs at 208 mln/$664 vs. consensus at 217mln/$658. This drives Citi's FY17 EPS estimates to $8.55 (vs $9.00 prior) and consensus at $8.94.

However, the bank was not yet ready to go cold-turkey bearish on Apple, and as a result it compensated for the near term weakness by raising FY2018 projections. For FY2018, Citi estimates iPhone units/ASPs at 244 mln/$740 (OLED at 53% of total mix) vs. consensus at 242mln/$680. This drives the bank's 2018 EPS to $10.92 (from $10.60 prior) vs consensus at $10.53. The reason for Citi's cautiousness, "based on industry-wide checks, we believe the significant enhancements to the iPhone 8 OLED could experience delays as it ramps to high volume production in order to meet strong demand."

Some more from Citi:

Launch of iPhone 8 and key features: We do expect Apple to launch its iPhone 8 in September and inside this report we detail the key features. Given the 10 year anniversary, impressive features and longer replacement cycle of the installed base, we believe many consumers will desire the OLED version of the iPhone 8 which we do not believe will be available in material quantities until October and November (rather than September). We believe consensus is too optimistic for volumes in the September quarter. We believe the OLED in-screen fingerprint sensor is more difficult to mass produce with high yields thereby making October/November mass availability likely, rather than September.

Changes to our model: Our September iPhone unit estimates now reduced to 40 mln while December unit


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Pittsburgh: A city of two post-industrial tales

 

Pittsburgh: A city of two post-industrial tales

Courtesy of Allen Dieterich-WardShippensburg University

File 20170606 3674 1b0tnua

Pittsburgh, between its industrial past and a clean, green tech-driven future. Dllu, CC BY-SA

President Donald Trump’s mention of Pittsburgh in his announcement withdrawing the U.S. from the Paris Agreement on climate evoked the city’s past as an industrial powerhouse. It sparked a furious set of tweets from Pittsburgh Mayor Bill Peduto, who promised his city would work to fight climate change. Trump’s statement also drew strong support from local Republican lawmakers who portrayed themselves as standing with “Western Pennsylvania manufacturers, boilermakers, power plant workers … and miners.”

The president’s words seem fitting for an administration taking great pains to symbolically and literally roll back the achievements of its predecessor. In 2009, the Obama administration chose Pittsburgh as the site for the U.S.-hosted summit of the G-20, a group of governments and central bankers from 20 major world economies. The meeting was in a downtown facility that was the world’s first and largest Leadership in Energy and Environmental Design (LEED) certified convention center. Positive media coverage poured in from around the world, showcasing Pittsburgh’s “green economy” rebirth as a center of clean technology and innovation.

The city took a hard hit in the 1980s when corporate and government policies, global economic forces and new technologies resulted in southwestern Pennsylvania’s permanent loss of more than 150,000 manufacturing jobs and 176,000 residents. In the decades since, Pittsburgh has used its considerable economic, institutional and political resources to reinvent itself as a center of education, innovation and health care. From 2010 to 2015, worker productivity shot up 10 percent, average annual wages increased 9 percent and the overall standard of living rose 13 percent in the region.

But the former Steel City’s success has proven to be uneven across racial and class lines. The recovery has also proven difficult to replicate in the former mill towns and outlying rural mining areas that once provided the raw materials upon which its fortunes were made. In my book, “Beyond Rust: Metropolitan Pittsburgh and the Fate of
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How TV cultivates authoritarianism – and helped elect Trump

 

How TV cultivates authoritarianism – and helped elect Trump

Courtesy of James Shanahan, Indiana University and Michael Morgan, University of Massachusetts Amherst

Many gallons of ink (and megabytes of electronic text) have been devoted to explaining the surprise victory of Donald Trump.

Reasons range from white working-class resentment, to FBI Director James Comey’s decision to reopen the Hillary Clinton email investigation, to low turnout. All likely played some role. It would be a mistake to think the election turned on one single factor.

However, a study we conducted during the campaign – just published in the Journal of Communication – suggests an additional factor that should be added into the mix: television.

We’re not talking about cable news or the billions in free media given to Trump or political advertising.

Rather, we’re talking about regular, everyday television – the sitcoms, cop shows, workplace dramas and reality TV series that most heavy viewers consume for at least several hours a day – and the effect this might have on your political leanings.

An authoritarian ethos

Studies from the past 40 years have shown that regular, heavy exposure to television can shape your views on violence, gender, science, health, religion, minorities and more.

Meanwhile, 20 years ago, we conducted studies in the U.S. and Argentina that found that the more you watch television, the more likely you’ll embrace authoritarian tendencies and perspectives. Heavy American and Argentinian television viewers have a greater sense of fear, anxiety and mistrust. They value conformity, see the “other” as a threat and are uncomfortable with diversity.

There’s probably a reason for this. Gender, ethnic and racial stereotypes continue to be prevalent in many shows. Television tends to distill complex issues into simpler forms, while the use of violence as an approach to solving problems is glorified. Many fictional programs, from “Hawaii Five-O” to “The Flash,” feature formulaic violence, with a brave hero who protects people from danger and restores the rightful order of things.

In short, television programs often feature an authoritarian ethos when it comes to how characters are valued and how problems are solved.

Viewing


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Zero Hedge

If BlackRock And Pimco Are Right, "Another Fed Shock Looms"

Courtesy of ZeroHedge. View original post here.

Discussing the market's ongoing reaction to the schizophrenic split between the hawkish Fed and a market which now sees a 50% lower terminal Fed Funds rate than the FOMC, yesterday Jeff Gundlach said that the flattening yield curve could become a concern for US economic growth when two and three-year notes yield about the same.

"Lower CPI in the next couple of months will be a cold bucket of water for the Fed tightening dreams," Gundlach said. "Commodities are super wea...



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ValueWalk

Howard Marks - Anticipate - And Avoid - Pitfalls That Others Will Rue After The Fact

By The Acquirer's Multiple. Originally published at ValueWalk.

With the stock market reaching all time highs, maybe it’s a good time to revisit Howard Marks’ memo of 2005 in which he discusses market trends being taken to excess – and the painful consequences that become clear in hindsight.

]]> Get The Timeless Reading eBook in PDF

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Here’s an except from that memo:

“The farther...



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Phil's Favorites

Most expensive race in House history turns out nearly 58 percent of Georgia district's voters

 

Most expensive race in House history turns out nearly 58 percent of Georgia district's voters

Courtesy of Jeffrey LazarusGeorgia State University

Republican candidate for Georgia’s Sixth District congressional seat Karen Handel declares victory with her husband Steve. AP Photo/John Bazemore

I’m a political science professor living in Georgia’s Sixth House district, where Republican Karen Handel eked out a victory of nearly four points over Democrat John Ossoff in a special House election on June 20.

And although I have made a career out ...



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Digital Currencies

Ethereum Flash Crashes By 96% After Status ICO Clogs Network

Courtesy of ZeroHedge. View original post here.

While Bitcoin, and recent Chinese and Korean momentum favorite, Litecoin, have been relatively stable for much of the day, Ethereum suffered dramatic losses on Wednesday, sliding from $360 to $260 before rebounding, in the process experiencing what may have been its first flash crash, when it plunged by 96% from $315 to $13 on massive volume, before rebounding.

...



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Chart School

Biotech breakout of bullish pattern in play!

Courtesy of Chris Kimble (posted at Zero Hedge)

Bio-tech used to be an upside leader over the broad market coming off the 2009 lows. Bio-tech gave up its leadership back in 2015, where it peaked and started under performing the broad market. Over the past 15-months, Biotech has started acting a little better.

...

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Insider Scoop

Was FedEx's Q4 'Good Enough' For The Bulls?

Courtesy of Benzinga.

Related FDX Stock Market News for June 21, 2017 FedEx Guidance Underwhelms, But Pullback Might Deliver A Buying Opportunity FedEx Remains Attractive After Earnings Report (GuruFocus)

Reviewing Fed...



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Biotech

Even though genetic information is available, doctors may be ignoring important clinical clues

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

Even though genetic information is available, doctors may be ignoring important clinical clues

Courtesy of Greg HallCase Western Reserve University

Digitized strand of DNA. Mathagraphics/From www.shutterstock.com

With the availability of home genetic testing kits from companies such as “23andMe” and “Ancestry DNA,” more peo...



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OpTrader

Swing trading portfolio - week of June 19th, 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

Frontier laid off state Senate president after broadband vote it didn't like

Courtesy of Jean-Luc

Speaking of FTR – not nice people…

Frontier laid off state Senate president after broadband vote it didn’t like

By Arstechnica.com

Broadband provider Frontier Communications recently laid off the West Virginia state Senate president after a vote the company didn't like—and yes, you read that correctly.

West Virginia does not have a full-time legislature, and state lawmakers can supplement their part-time government salaries ($20,000 a year,&...



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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

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Members' Corner

Robert Sapolsky: The biology of our best and worst selves

Interesting discussion of what affects our behavior. 

Description: "How can humans be so compassionate and altruistic — and also so brutal and violent? To understand why we do what we do, neuroscientist Robert Sapolsky looks at extreme context, examining actions on timescales from seconds to millions of years before they occurred. In this fascinating talk, he shares his cutting edge research into the biology that drives our worst and best behaviors."

Robert Sapolsky: The biology of our best and worst selves

Filmed April 2017 at TED 2017

 

p.s. Roger (on Facebook) saw this talk and recommends the book ...



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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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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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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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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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