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Mid-Day Update

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

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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





Late Payments by Ibex Companies Hits €47 Billion, 169 Days (3 Times Legal Time Limit); Ibex vs. DOW

Courtesy of Mish.

Lack of significant improvement in payments by IBEX companies to suppliers is yet another another sign there isn’t much of a recovery in Spain.

La Vanguardia reports Late Payments by Ibex Companies Hits €47 Billion, 169 days (nearly 3 times the legal time limit). Ibex is the name of the Spanish stock market exchange.

Via translation from La Vanguardia. <

Delinquency of the Ibex 35 exceeds 47 billion euros and the average payment is 169 days late, almost three times the limits set by law, according to the latest report of the Platform Multisectoral against delinquency (PMcM), made from the data published by the National Securities Market Commission (CNMV).

In 2012, the average payment of listed non-financial corporations was 191 days, while in 2013 totaled 184, down 4%.

Construction and real estate had a 10% improvement. Trade and services improved 4%. Despite this improvement, the data shows that the construction sector and real estate remains the one with the greatest delay in settlement of bills. Their average payment reached the 288 days in 2013, while in 2012 exceeded 300.

Behind them are trade and services, with 253 days, nine fewer than in 2012.

PMcM president, Antoni Cañete said that “these data show that some of these big companies are financed at the expense of their own providers, mostly SMEs and freelancers”. “This situation, is produced by the dominant position of Ibex companies, shows abuse and violation of the law, “added Cañete.

IBEX vs. DOW

La Vanguardia notes that in the DOW, the average collection period of industrial companies is 105 days, followed by service and trade at 70 days and energy at 60 days.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com



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Goldman Sachs Is Buying Carl Icahn’s “High Yield Bond Bubble”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

High-yield bond issuance has surged in recent days as 'wide' spreads have encouraged investors to take the dip once again (despite firms' record leverage and increasing desperation to roll the wall of maturing debt). However, it's not all guns blazing, as one manager noted, "while the market reopens, it reopens with issuers having to be a little more investor friendly." Despite Carl Icahn's warning that "the high-yield bond market is in a major bubble that's gonna burst," Bullard's "QE4" comments sparked Goldman to add US junk bonds and Aberdeen says selling EU and buying US corporate debt "is the trade that kind of screams at you right now." The dash-for-trash down-in-quality is back as CCC-demand surges and, as one trader notes the market's schizophrenia: "one day the market feels like it is shut down and you can’t sell anything and you wake up this morning and you can price any part of the curve."

There is nothing to fear but the lack of The Fed itself…

On the one hand…

Carl Icahn:

"The Fed is really holding the market up…. The Fed turned this market around here because it let it be known that the Fed funds rate isn't going to be raised in March. I am concerned about the high yield market, I think that's in a major bubble, but nobody knows when it's gonna burst…"

and on the other…

Goldman Sachs Asset Management:

GSAM dded to its U.S. junk bond holdings amid recent selloff, according to money manager’s head of Asia-Pacific fixed income Philip Moffitt, seeing U.S. as ‘Beacon’ amid the recent rout.

 

High-yield bonds more attractive than investment-grade debt, Moffitt says in interview in Sydney

 

Says underlying structure of U.S. growth is quite strong

 

GSAM is “reasonably constructive” on high-yield market in Asia

 

Says he’s “worried about China” and expects a higher risk premium on assets related to the country

Aberdeen Asset Management:

New issuance has been heavy but concessions generous: "There was a good 10 to 15 basis-point concession probably because the underwriters on both wanted to get the deals done, done properly, and have them trade well."

 

"We have been sort


continue reading





Meet Janet Dupree:72, Alcoholic, HIV-Positive, $16,000 In Student Debt: “I Won’t Live Long Enough To Pay It Off”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

One would think that Janet Lee Dupree, 72, a self-professed HIV-infected alcoholic, would be slowly putting aside material worries as she prepares to set the intangibles in her life in order for one last time. One would be wrong.

Janet Dupree has had her wages garnished

As she admits, “I am an alcoholic and I have HIV,” she tells the BBC. “That’s under control.” So what is the cause of most if not all consternation in the final days of Dupree’s life? “I was sick and I didn’t worry about paying back the debt.” As a result, Dupree defaulted on her loan, and since she turned 65 she has had money withheld from her Social Security benefits.

“Just recently I received a notification that they are going to garnish my wages because I am still working,” says Dupree, who works 30 hours a week as a substance abuse counsellor.

The debt in question: Dupree owes $16,000 in student loans she acquired in 1971 and 1972.

Or make that “student loans” – debt which is crippling the last days of a person who hasn’t seen the inside of a classroom in four decades.

Dupree, who lives in Citra, Florida, admits she forgot for many years that she had borrowed the money – originally $3,000 – in order to complete her undergraduate studies in Spanish.

The stunning story of how the exponentially rising…

 

… notional amounts of (anything but) student debt is crushing millions of Americans as recounted by the BBC:

  • Outstanding student loan debt in the US amounts to $1tr
  • 3% of households headed by individuals 65 or over carry student debt (706,000 households)
  • 24% of households headed by individuals 64 or under carry student debt (22 million households)
  • The outstanding federal debt for older adults grew from $2.8bn in 2005 to $18.2bn in 2013
  • 27% of federal student loans held by individuals aged 65 to 74 are in default, compared to 12% of loans to people between the ages of 25 and 49

In 2005, older adults owed $2.8bn (£1.61bn) in federal student debt. By 2013, that figure that had ballooned to $18.2bn, according to a report released last month by the Government Accountability Office (GAO).

These seniors account for 706,000 households in the
continue reading





Understanding the CFNAI Components

Courtesy of Doug Short.

The Chicago Fed’s National Activity Index, which I reported on earlier today, is based on 85 economic indicators drawn from four broad categories of data:

  • Production and Income
  • Employment, Unemployment, and Hours
  • Personal Consumption and Housing
  • Sales, Orders, and Inventories

The complete list is available here in PDF format.

In today’s Chicago Fed update, we learned that three of the four broad categories of indicators that make up the index made positive contributions to the index in September, and three of the four categories increased from August. Personal Consumption and Housing continues to be the significantly underperforming category. Let’s now take a look at the historical context, focusing on the less volatile 3-month moving average of the components.

A chart overlay of the complete multi-decade span of all four categories, even if we use the three-month moving averages, is quite challenging for visual clarity:

Click to View
Click for a larger image

So here is a close-up view since 2000:

Click to View
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But a snapshot of the 21st century contains only two recessions, so it’s unclear how the individual components have behaved in during the seven recessions since the 1967 starting point for this data series.

Here is a set of charts showing each of the four components since 1967. Because of the highly volatile nature of the data, the charts are based on three-month moving averages, a smoothing strategy favored by the Chicago Fed economists. I’ve also highlighted the values for the months that the NBER subsequently identified as recession starts.

Click to View
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Click to View
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Click to View
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Click to View
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There’s a lot to digest in the individual charts. Clearly the first two (Production and Income and…
continue reading





You Asked For Market-Lifting Miracles Theo, I Give You Another NYSE Break

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As John McClane might respond to Hans Gruber’s tortured paraphrase.. “The circuits that cannnot be cut are cut automatically in response to a terrorist incident. You asked for miracles, Theo, I give you the [A Broken NYSE]“

  • *NYSE EURONEXT EXPERIENCING INTERMITTENT MKT DATA ISSUES

Source: NYSE

So just as we requested yesterday…

Yippee ki-ay, motherfucker” to paraphrase the inimitable John McClane.





EXCLUSIVE: Was Ebola Accidentally Released from a Bioweapons Lab In West Africa?

Courtesy of ZeroHedge. View original post here.

Submitted by George Washington.

Accidents at Germ Labs Have Occurred Worldwide

Nations such as Russia, South Africa and the U.S. have long conducted research into how to make deadly germs even more deadly. And accidents at these research facilities have caused germs to escape, killing people and animals near the facilities.

For example, the Soviet research facility at Sverdlovsk conducted anthrax research during the Cold War. They isolated the most potent strain of anthrax culture and then dried it to produce a fine powder for use as an aerosol. In 1979, an accident at the facility released anthrax, killing 100.

The U.S. has had its share of accidents.  USA Today noted in August:

More than 1,100 laboratory incidents involving bacteria, viruses and toxins that pose significant or bioterror risks to people and agriculture were reported to federal regulators during 2008 through 2012, government reports obtained by USA TODAY show.

 

***

 

In two other incidents, animals were inadvertently infected with contagious diseases that would have posed significant threats to livestock industries if they had spread. One case involved the infection of two animals with hog cholera, a dangerous virus eradicated from the USA in 1978. In another incident, a cow in a disease-free herd next to a research facility studying the bacteria that cause brucellosis, became infected ….

 

The issue of lab safety and security has come under increased scrutiny by Congress in recent weeks after a series of high-profile lab blunders at prestigious government labs involving anthrax, bird flu and smallpox virus.

 

***

 

The new lab incident data indicate mishaps occur regularly at the more than 1,000 labs operated by 324 government, university and private organizations across the country ….

 

"More than 200 incidents of loss or release of bioweapons agents from U.S. laboratories are reported each year. This works out to more than four per week," said Richard Ebright, a biosafety expert at Rutgers university in New Jersey, who testified before Congress last month at a hearing about CDC's lab mistakes.

 

The only thing unusual about the CDC's recent anthrax and bird flu lab incidents, Ebright said, is that the public found out about them. "The 2014 CDC anthrax event became known to


continue reading





“Warning Signs” & The Fed’s Grand Illusion

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via Scotiabank’s Guy Haselmann,

Ever since Bullard’s agoraphobic performance last week on Bloomberg TV, it should be crystal clear to the FOMC and investors just how powerfully markets will react to any shifts in Fed policy or attempts at policy normalization.  An equity market freefall abruptly took an about-face, resuming its ‘melt-up’ trade, after a worried Bullard merely hinted at the possibility of more QE stimulants.

The FOMC should take this as a warning sign.  It would be irrational for the Fed to believe that after QE purposefully elevated asset prices and generated a one-way moral hazard spectacle, that there is not going to be some-type of reversal (reaction) when QE is withdrawn and the first hike nears.

The new flaw in Fed communication that has arisen recently, and that was amplified by Bullard’s interview, is how Fed policymakers fundamentally assess and mollify the trade-off between attempts at stimulating real economic activity and financial stability risks.

For several years, the FOMC has been confronted with the delicate balance between removing accommodation too slowly and removing it too quickly. Since the Fed is basically out of effective bullets and its balance sheet has ballooned to the practical limits of prudence, the Fed is therefore trying to err on the side of not removing accommodation too quickly. In this regard, the Fed has allowed the fog to roll in, by repeatedly and cunningly changing the markets’ focus in order to ‘buy time’. (As a case in point, the first hike never arrived when the unemployment rate hit 6.5% as the Fed initially said it would.)

Yet, how far can this asymmetrical leaning go before negative second-order effects and risks to financial stability via asset bubbles make this stance a (ever-growing) poor trade-off.  It seems to me that if the Fed were truly data dependent then it would have ended QE a long time ago and even hiked rates already.

The Unemployment Rate is currently 5.9%; not far from the 5.5% level that is widely considered full-employment. It could be argued that technological advancements or demographic shifts alone could have structurally lifted the level considered full-employment. Given this, and the plenty of other economic indicators that look quite strong, I find it astonishing that the Fed is still providing depression-like policies, let alone not already…
continue reading





The Parrot Is Finally Dead: The Economist Does It Again

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

With its latest “coverage” of the European economy, the Economist may have finally jumped the parrot.

Hm, where else have we heard the “it’s only resting” excuse? Oh yes, Mr Panos of course.

So… Europe is not not Greece?

h/t @Insidegame





Conference Board Leading Economic Index Increased in September

Courtesy of Doug Short.

The Latest Conference Board Leading Economic Index (LEI) for September is now available. The index rose 0.8 percent to 104.4. August was revised downward to 103.6 percent (2004 = 100). The latest number came in above the 0.6 percent forecast by Investing.com.

Here is an overview from the LEI technical notes:

The Conference Board LEI for the U.S. increased in September after no change in August. The financial components, along with initial claims for unemployment insurance and ISM® new orders, made the largest positive contributions this month. In the six-month period ending September 2014, the leading economic index increased 3.5 percent (about a 7.1 percent annual rate), faster than the growth of 2.7 percent (about a 5.6 percent annual rate) during the previous six months. Also, the strengths among the components became more widespread than weaknesses in the past six months. [Full notes in PDF]

Here is a chart of the LEI series with documented recessions as identified by the NBER.

Click to View
Click for a larger image

And here is a closer look at this indicator since 2000. We can more readily see that the recovery from the 2000 trough weakened in 2012 but began trending higher in the latter part of the year.

Click to View
Click for a larger image

For a more details on the latest data, here is an excerpt from the press release:

“The LEI picked up in September, after no change in August, and the strengths among its components have been very widespread over the past six months,” said Ataman Ozyildirim, Economist at The Conference Board. “The outlook for improving employment and further income growth are expected to support the moderate expansion in the U.S economy for the remainder of the year.”

“The financial markets are reflecting turmoil and unease, but the data on the leading indicators continue to suggest moderate growth in the short-term,” said Ken Goldstein, Economist at The Conference Board. “Meanwhile, the weak advances in the housing market remain a bigger risk to the outlook than short-term financial gyrations.”

For a better understanding of the…
continue reading





 

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!

 
 

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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Phil's Favorites

Late Payments by Ibex Companies Hits €47 Billion, 169 Days (3 Times Legal Time Limit); Ibex vs. DOW

Courtesy of Mish.

Lack of significant improvement in payments by IBEX companies to suppliers is yet another another sign there isn't much of a recovery in Spain.

La Vanguardia reports Late Payments by Ibex Companies Hits €47 Billion, 169 days (nearly 3 times the legal time limit). Ibex is the name of the Spanish stock market exchange.

Via translation from La Vanguardia. <
Delinquency of the Ibex 35 exceeds 47 billion euros and the average payment is 169 days late, almost three times the limits set by law, according to the latest report of the Platform Multisectoral against ...



more from Ilene

Zero Hedge

Goldman Sachs Is Buying Carl Icahn's "High Yield Bond Bubble"

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

High-yield bond issuance has surged in recent days as 'wide' spreads have encouraged investors to take the dip once again (despite firms' record leverage and increasing desperation to roll the wall of maturing debt). However, it's not all guns blazing, as one manager noted, "while the market reopens, it reopens with issuers having to be a little more investor friendly." Despite Carl Icahn's warning that "the high-yield bond market is in a major bubble that's gonna burst," Bullard's "QE4" comments sparked Goldman to add US junk bonds and Aberdeen says selling EU and buying US corporate debt "is the trade th...



more from Tyler

Chart School

Understanding the CFNAI Components

Courtesy of Doug Short.

The Chicago Fed's National Activity Index, which I reported on earlier today, is based on 85 economic indicators drawn from four broad categories of data:

  • Production and Income
  • Employment, Unemployment, and Hours
  • Personal Consumption and Housing
  • Sales, Orders, and Inventories
The complete list is available here in PDF format.

In today's Chicago Fed update, we learned that three of the four broad categories of indicators that make up the index made positive contributions to the index in September, and three of the four categories increased from August. Personal Con...



more from Chart School

Insider Scoop

UPDATE: Credit Suisse Reiterates On FMC Technologies On Lowered EPS Estimates

Courtesy of Benzinga.

Related FTI Benzinga's Top Initiations Credit Suisse Initiates FMC Technologies At Neutral Energy Stocks Move Higher as Oil Spikes (Fox Business)

In a report published Thursday, Credit Suisse analyst James Wicklund reiterated a Neutral rating on FMC Technologies (NYSE: FTI), but lowered the price target from $72.00 to $6...



http://www.insidercow.com/ more from Insider

Option Review

LUV Options Active Ahead Of Earnings

There is lots of action in Southwest Airlines Co. November expiry call options today ahead of the air carrier’s third-quarter earnings report prior to the opening bell on Thursday. Among the large block trades initiated throughout the trading session, there appears to be at least one options market participant establishing a call spread in far out of the money options. It looks like the trader purchased a 4,000-lot Nov 37/39 call spread at a net premium of $0.40 apiece. The trade makes money if shares in Southwest rally 9.0% over the current price of $34.32 to exceed the effective breakeven point at $37.40, with maximum potential profits of $1.60 per contract available in the event that shares jump more than 13% to $39.00 by expiration. In September, the stock tou...



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Sabrient

Sector Detector: Sharp selloff in stocks sets up long-awaiting buying opportunity

Courtesy of Sabrient Systems and Gradient Analytics

Last week brought even more stock market weakness and volatility as the selloff became self-perpetuating, with nobody mid-day on Wednesday wanting to be the last guy left holding equities. Hedge funds and other weak holders exacerbated the situation. But the extreme volatility and panic selling finally led some bulls (along with many corporate insiders) to summon a little backbone and buy into weakness, and the market finished the week on a high note, with continued momentum likely into the first part of this week.

Despite concerns about global economic growth and a persistent lack of inflation, especially given all the global quantitative easing, fundamentals for U.S. stocks still look good, and I believe this overdue correction ultimately will shape up to be a great buying opportunity -- i.e., th...



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Digital Currencies

Goodbye War On Drugs, Hello Libertarian Utopia. Dominic Frisby's Bitcoin: The Future of Money?

Courtesy of John Rubino.

Now that bitcoin has subsided from speculative bubble to functioning currency (see the price chart below), it’s safe for non-speculators to explore the whole “cryptocurrency” thing. So…is bitcoin or one of its growing list of competitors a useful addition to the average person’s array of bank accounts and credit cards — or is it a replacement for most of those things? And how does one make this transition?

With his usual excellent timing, London-based financial writer/actor/stand-up comic Dominic Frisby has just released Bitcoin: The Future of Money? in which he explains all this in terms most readers will have no tr...



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OpTrader

Swing trading portfolio - week of October 20th, 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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Market Shadows

Falling Energy Prices: Sober Look takes a Sober Look

Falling Energy Prices: Sober Look takes a Sober Look

What do falling energy prices mean for the US consumer? Sober Look writes a brief yet thorough overview of the consequences of the correction in the price of crude oil. There are good aspects, particularly for the consumer, bad aspects, and out-right ugly possibilities. For more on this subject, read James Hamilton's How will Saudi Arabia respond to lower oil prices?  In previous eras, Saudi Arabia would tighten the supply to help increase prices, but in this "game of chicken," the rules m...



more from Paul

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. Just sign in with your PSW user name and password. (Or take a free trial.)

#457319216 / gettyimages.com

 

...

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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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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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