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News You Can Use, 4-24-15 P.M.

At $50, This Fake Apple Watch Offers Features the Real One Lacks (Bloomberg)

In Shenzhen's famous Huaqiangbei electronics shopping district, you won't need to stand in any lines or make an appointment for these smartwatches.

At 299 yuan—that's less than $50—you can pick up a smartwatch that looks quite similar to Apple's own creation, complete with replica Digital Crown and touch screen. Like the Cupertino original that went on sale today for seven times the price, the generic offering spotted in this bustling Chinese city features an activity tracker, chat apps, Web browser, and Bluetooth connectivity. A brief demo unveiled shortcomings in the browser with only the text loading on screen.

“For all intents and purposes, these are parking lots": Oil and gas drilling is destroying our landscapes“For all intents and purposes, these are parking lots”: Oil and gas drilling is destroying our landscapes (Salon)

Spurred by the advent of fracking and other high-tech ways of getting at North America’s fossil fuel reserves, the oil and gas industry has, for the past decade, been drilling at an astounding rate of 50,000 wells per year.

This may be a large continent, but their impact on the landscape is nonetheless enormous. The industry’s total operations, say researchers at the University of Montana, Missoula in a new study, occupy land area three times the size of Yellowstone National Park, “transforming millions of hectares of the Great Plains into industrialized landscapes” that are rarely converted back after the drillers have gone on.

Elaine Wynn Loses Dissident Drive to Retain Wynn Board Seat (Bloomberg)

Elaine Wynn lost her bid for re-election to the board of Wynn Resorts Ltd. after failing to win over enough shareholders to back her dissident campaign.

Wynn, 72, was asking investors to keep her on the board of the casino company co-founded by her ex-husband, Chairman and Chief Executive Officer Steve Wynn, after other directors declined to renominate her. They said a legal dispute between the two over her voting rights is influencing board decisions.

Nomura Forecast: Q1 GDP at 1.0% (CalculatedRisk)

Adverse weather conditions, West Coast port disruptions, the stronger dollar and the decline in crude oil prices all likely hurt economic activity in


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New Problem, Old Tracks

Courtesy of Mish.

The San Francisco Bay Area Region Transportation system (BART) has a major problem: aging tracks that border on unsafe.

The San Francisco Chronicle details the problem in BART has New Problem: Old Tracks.

The nearly half-century-old system needs to replace its worn steel rails and cross ties. The problem has produced derailments, a drop in train speed in several trouble spots, and a repair schedule that will close the tracks in Oakland over an estimated 11 weekends.

Track maintenance is nothing new for transit systems as equipment and track wear out. But the scale of the problem and BART’s essential role in carting nearly 400,000 daily riders to work, school and appointments make the task important. It’s imperative that the system focus on improving service as quickly as it can — or risk public concerns about safety and reliability.

Rail Refresher Solution

The following video sent by reader Justin is the exact solution. Meet the "Rail Refresher"

That is one of the most amazing pieces of equipment I have ever seen.
How many workers will it replace?

Mike "Mish" Shedlock

http://globaleconomicanalysis.blogspot.com

 




When Your Banana-Guy Starts Trading Stocks, You Know It’s Over

Courtesy of ZeroHedge. View original post here.

Presented with no comment… ok well one! WTF!?

Source: @wmiddelkoop

This

Chart: Bloomberg

No comment… not one… seriously.





The Rehypothecation Of Gold, And Why It Matters

Courtesy of Charles Hugh-Smith, OfTwoMinds

Claiming to own X quantity of gold is one thing, and reporting how many times the gold has been pledged as collateral is another.

When correspondent Scott A. Batten offered to write an explanation of the rehypothecation of gold and why it matters, I quickly accepted. Like many others, I have breezed over the word rehypothecation with the basic understanding that it means assets pledged by counterparties (such as the infamous copper stored in Chinese warehouses) are reused as collateral/repledged--in effect, the same assets are pledged as collateral multiple times.
 
But beyond this, I have not had a clear understanding of how the rehypothecation of gold reserves threatens the whole shaky edifice of Infinite Greed, oops, I mean neoliberal capital markets.
Here is Scott's commentary:
When introducing a new concept, it is best to start with the definition of the words to be used. In this case, the discussion of rehypothecation and how it places the world at risk with the fun and games played in the stock market.
 
Rehypothecation:
 
Rehypothecation occurs when your broker, to whom you have hypothecated — or pledged — securities as collateral for a margin loan, pledges those same securities to a bank or other lender to secure a loan to cover the firm's exposure to potential margin account losses.
 
When you open a margin account, you typically sign a general account agreement with your broker, in which you authorize your broker to rehypothecate.
 
Now, let’s put this into easy to understand language. Let’s say that you have ten dollars. You take it to the bank to let them “borrow” it, while paying you interest. What you have done, in reality, is given them your money to use as they see fit, while giving you a small percentage of the gains that they will earn. A bank would loan the money to a home buyer or perhaps a small business. At the very least, they can lend all the money in excess of their requirement to hold some cash as reserves--say 10% for ease of math.
 
They now have nine dollars to invest. Their


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Crash Boys

Michael Lewis explains the flash crash and Navinder Singh Sarao's role in it. Read also: Guy Trading at Home Caused the Flash Crash for background. 

Crash Boys

By  at Bloomberg View

The first question that arises from the Commodity Futures Trading Commission’s case against Navinder Singh Sarao is: Why did it take them five years to bring it?

A guy living with his parents next to London's Heathrow Airport enters a lot of big, phony orders to sell U.S. stock market futures; the market promptly collapses on May 6, 2010; it takes five years for the army of U.S. financial regulators to work out that there might be some connection between the two events. It makes no sense.

A bunch of news reports have suggested that the CFTC didn’t have the information available to it to make the case. After the flash crash, the commission focused exclusively on trades that had occurred that day, rather than orders designed not to trade — at least until some mysterious whistle-blower came forward to explain how the futures market actually worked. But this can’t be true.

Immediately after the flash crash, Eric Hunsader, founder of the Chicago-based market data company Nanex, which has access to all stock and futures market orders, detected lots of socially dubious trading activity that May day: high-frequency trading firms sending 5,000 quotes per second in a single stock without ever intending to trade that stock, for instance. On June 18, 2010, Nanex published a report of its findings.

The following Wednesday, June 23, the website Zero Hedge posted the Nanex report. Two days later the CFTC’s chief economist, Andrei Kirilenko, e-mailed Hunsader. “He invited me out to D.C. and I talked with everyone there (and I mean everyone — including a commissioner),” Hunsader says. “The CFTC then flew out a programmer to our offices where we showed him how to work with our data. Took all of a day. We sent him back with our flash crash data, and that was pretty much the last we heard about that project.”

[More.]





5 Things To Ponder: Market Soup

Courtesy of Lance Roberts via STA Wealth Management

With first quarter's earnings season launching into full swing it is interesting to see just how many companies are beating earnings expectations. Of course, these are the current downwardly revised earnings expectations that are being beat, but they are beating them nonetheless. However, if we just stepped back to the 4th quarter of 2014 and used THOSE expectations, well, with 100% of companies missing earnings the markets would likely not be quite as chipper.

Like I have said previously, the "beat the earnings game" is quite laughable in reality as it is the equivalent of "moving the target to the arrow."

Don't misunderstand me, I do understand the "need" for predictions as it supports the emotional biases of greed and speculation. However, logic suggests that a return to making investment decisions based solely on trailing reported earnings might somewhat reduce the ongoing "boom/bust" cycles that have devastated investors over the last couple of decades. 

But I digress. The point I wanted to make about earnings versus revenue is this. Operating and reported earnings have turned sharply lower over recent quarters which has historically been associated with major market peaks. As shown below, it is also important to notice that revenue has tended to lag these downturns in earnings previously. This is because the measures used to substantially boost profitability from each dollar of revenue generated through accounting gimmickry, share repurchases, and cost cutting are finite in nature. When the effect of those manipulations fade, so does the inflated profitability generated from each dollar of revenue.

SP500-Earnings-Vs-Sales-042315

This will be something worth watching closely over the next few quarters particular as the commentary of a "continued secular bull market" continues to hit the headlines. The reality is that with earnings deteriorating, the economy weak and valuations elevated the outcomes of investments made today are likely to be far more disappointing than currently expected. 

That is the context around this weekend's reading list which is a literal "soup" of thoughts and ideas that explore the markets, earnings, rates and investing in an effort to determine what is likely to happen next. 


HEADLINE OF THE WEEK: Nasdaq To Hit 10,000 By 2016 by Shawn Langlois via MarketWatch



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It’s Not Getting Any Smaller

Tim Knight strikes out against certain crazyass gold-lovers on Zero Hedge. When Paul Price wrote an article saying that gold was a bad investment over two years ago, some really nasty, pitiful comments ensued…

It's Not Getting Any Smaller

Courtesy of ZeroHedge. View original post here.

From Slope of Hope: Given the, errr, disposition of the ZH crowd, this probably isn't the right forum for this, but just for a change, let's have a little uncomfortable truth: I would like to make my own modest effort to put to rest a trite little phrase that gets trotted out every time silver and gold are getting trashed (which has been the case for years now). "I just checked, and my pile hasn't gotten any smaller."

These precious metals kooks – sometimes called "stackers" (since they stack up coins, as well as losses) somehow make the point that since their physical asset hasn't changed shape or amount, it hasn't really dropped in value. Not in a real sense. Honest Injun.

I don't think I've ever used this word before on this blog, but here we go: bullshit.

If I bought a house for $5,000,000 (which poor saps are doing in my fair city right now) and a few years later it is worth $2,500,000, I have lost $2,500,000. Period. End of story.

The analogous retort: "My house isn't any smaller!"

Ummm, yeah, that's right, you pinheaded moron. But you've still had a severe diminishment in asset value by the metrics we here on Earth like to use. Your house still has utility (which is far more than one can say of a bunch of shiny coins and bars), but you've had your ass handed to you anyway.

And I don't say this as a person pointing and laughing at precious metals kooks. I am one of them, as I accumulated a meaningful horde of silver and gold, largely prompted by the lunatic rantings (albeit very convincing rantings) of gold bugs over the past few years.

If the fabled "things will go wrong someday" ever does come, and precious metals soar in value versus meaningless fiat, well, great, then the kooks will have, in the end, be right. But that day may never, ever come, and owners of metals should recognize that their beloved stacks are indeed the same height, width, and depth…………but these people (and I) would have been a hell of a lot better off buying Amazon and Starbucks in the first place.

0424-gld

 





ECB Buys Negative Yield Covered Bonds; Trade Guaranteed to Blow Up

 

[Picture by Geralt at Pixabay]

Courtesy of Mish.

In a move 100% guaranteed to blow up at a later date, the ECB Said to Start Buying Covered Bonds With Negative Yields.

The European Central Bank started buying covered bonds with negative yields as its asset-purchase program reduces the supply of the highly rated debt, according to two people familiar with the matter.

The central bank bought the debt in the past two weeks, said the people, who asked not to be identified because the information is private. The notes were from Germany, one of the people said.

The ECB has bought 69.7 billion euros ($75.5 billion) of covered bonds since October as part of its latest measures designed to stimulus growth in the euro area. The accumulation of assets is driving down yields and the central bank now holds about 15 percent of the market, according to ABN Amro Bank NV.

“The ECB has caused this situation by being a big buyer and has exacerbated the already negative net supply of covered bonds,” said Joost Beaumont, a fixed-income strategist at ABN Amro in Amsterdam. “If the ECB buys more, yields will go still lower and that’s going to affect the ECB itself.”

The ECB, which is also buying government bonds and asset-backed debt, has said it will buy negative-yielding securities up to its cash deposit rate of minus 0.2 percent.

An ECB spokesman declined to comment on its covered debt purchases.

“Supply in positive yields is getting scarce and the ECB may have no other choice to fulfill its targeted purchase volume than to buy negative-yielding bonds,” said Tobias Meyer, an analyst at Norddeutsche Landesbank in Hanover, Germany.

Trade Guaranteed to Blow Up

I agree with Beaumont's comment this is "going to affect the ECB itself".

In fact I will go one further and suggest this is a "trade guaranteed to blow up", I just cannot say when or even in precisely what ways.

Mike "Mish" Shedlock

http://globaleconomicanalysis.blogspot.com

 




US Factories Crushed By Strong Dollar

Courtesy of John Rubino.

Government statistics are always suspect, for at least one obvious reason: Modern economies are way too big and complex to measure in real-time. So virtually every number is revised in the months after its release, frequently to the point of saying something very different. But by then lots of new data has come out and no one cares about the old numbers.

So to the extent that any government report is trustworthy, it’s the trend and not the data point that matters. And lately a whole slew of data points have been coalescing into downtrends that should be taken seriously. Today’s example is durable goods, which measures the health of US factories making big, long-lasting things like cars, planes and refrigerators. Bloomberg this morning put out a good analysis showing how “core” capital goods orders — for things things that don’t bounce around by double-digit rates every month — is now firmly in a downtrend, featuring the following charts:

 

Core goods shipments
 
Cap goods orders
 
Capacity utilization 2015

The obvious explanation is that the dollar’s exchange rate is way up, making US goods more expensive and foreign goods cheaper and leading the rest of world to buy less from us. Domestic factories are seeing their order books shrink and are as a result producing less. They’re also hiring fewer and/or firing more workers. And the downtrend seems to be gaining momentum. Core orders in particular turned down in mid-2014 and are now in free-fall.

Since the rest of the world isn’t likely to start buying larger quantities of US trains, planes and automobiles anytime soon, the trend probably won’t reverse without a favorable change in the terms of trade. That is, the dollar has to go down before US factories will pick up. And that won’t happen while the Fed is promising to raise interest rates (which would, other things being equal, boost the dollar).

So this looks set to continue until the Fed springs a surprise. And the longer that takes the bigger the subsequent reversal.

Visit John’s Dollar Collapse blog here





News You Can Use, 4-24-15 A.M.

Crash-Era Ending in Nasdaq as Index Passes 15-Year Closing High (Bloomberg)

Advances in EBay Inc. and Microsoft Inc. propelled the Nasdaq Composite Index past its all-time closing high, leaving the gauge at the brink of a record for the first time since the dot-com crash in 2000. 

Unequal, Yet Happy (NY Times)

THE gaping inequality of America’s first Gilded Age generated strong emotions. It produced social reformers like Jane Addams, anarchist agitators like Emma Goldman, labor leaders like Eugene V. Debs and Progressive politicians like Theodore Roosevelt. By the 1920s, sweeping legislation regulating food and drugs and breaking up corrupt trusts had been passed. The road to the New Deal was paved.

But our current Gilded Age has been greeted with relative complacency. Despite soaring inequality, worsened by the Great Recession, and recent grumbling about the 1 percent, Americans remain fairly happy. 

Poultry Industry in MinnesotaBird Flu ‘Catastrophe’ Mounts Amid Concern Virus Is Airborne (Bloomberg)

Deadly bird flu swelled in the poultry industry in Minnesota and neighboring Wisconsin amid speculation that winds may be carrying virus particles into facilities housing turkeys and chickens.

“This is a catastrophe for both the turkey and the egg industries,” William Rehm, the president of Daybreak Foods Inc., said after his company’s farm in Jefferson County, Wisconsin, with 800,000 egg-laying hens was infected by bird flu. “Some USDA veterinarians are starting to believe the virus is spreading from particulates in the air,” he said Wednesday in a telephone interview. (More)

A pedestrian walks past a main branch of CIBC in  Montreal, April 24, 2014. REUTERS/Christinne MuschiCIBC says it in talks on potential $2 billion U.S. acquisition (Reuters)

Canadian Imperial Bank of Commerce (CM.TO) is in talks with several U.S. companies on a potential $2 billion wealth-management and private-banking acquisition, its top executive said in an interview.

The Reasons for a Meandering Market (Bloomberg)

During the past few years, I have referred to market breadth as one of the more important metrics of the stock market's health. As we close in on new highs in the cumulative advance-decline line, it is time to revisit


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Zero Hedge

Hundreds Dead After Devastating Nepal Earthquake Topples Structures, Starts Avalanches

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

A little over four years after the devastating Japanese earthquake led to a tsunami that triggered the biggest nuclear disaster since Chernobyl, overnight Asia was once again the epicenter of a massive, 7.9 magnitude earthquake, this time not on the Pacific Rim but deep in the Himalayan mountain range, striking the small country of Nepal and sending tremors deep in Northern India, resulting in at least 449 deaths, countless injured, toppling a 19th-century tower in the capital Kathmandu and triggering avalanches on Mount Everest.

The U.S. Geological Survey said the quake, initi...



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Chart School

Price waves that signal market direction

Courtesy of Read the Ticker.

Question: Do price waves answer the Continuation or Reversal question?More from RTT TvAnswer: Yes when you understand Wyckoff logic, more so if you understand Richard Wyckoff law off 'Effort vs Results' and how it supports the Richard Wyckoff law of 'Supply and Demand'.

AMZN price chart with waves colored (the daily price waves are the same formula as PnF wave/bar calculation below, allows sync of price action).

Click for popup. Clear your browser cache if image is not showing.

Auto PnF chart from our Swing Pop out charts.

Click for popup. Clear your browser cache if image is not showing.

NOTE: readtheticker.com does allow users to load ...

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Phil's Favorites

News You Can Use, 4-24-15 P.M.

At $50, This Fake Apple Watch Offers Features the Real One Lacks (Bloomberg)

In Shenzhen's famous Huaqiangbei electronics shopping district, you won't need to stand in any lines or make an appointment for these smartwatches.

At 299 yuan—that's less than $50—you can pick up a smartwatch that looks quite similar to Apple's own creation, complete with replica Digital Crown and touch screen. Like the Cupertino original that went on sale today for seven times the price, the generic offering spotted in this bustling Chinese city features an activity tracker, chat apps, Web browser, and Bluetooth connectivity. A brief demo unveiled shortcomings in the browser with only the text loading on screen.

...



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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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Kimble Charting Solutions

King Dollar slipping below support, say Joe Friday

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

King Dollar has been on a role since last summer, up over 20% in less than a year. When looking back on the US$, the rally has been rare and nearly historic. Majority of the rally took place inside the steep rising channel above. Over the past month the US$ might have put in a double top. Over the past few days, the US$ has slipped a little below rising support at red arrow above.

CLICK ON CHART TO ENLARGE

As you can see from the table abo...



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Digital Currencies

Why Bitcoin's male domination will be its downfall

Here's an interesting argument by Felix Salmon, although I think he is taking two correct observations and mistakenly attributing a cause-and-effect relationship to them: Bitcoin is going nowhere because women are not involved.

More likely, in my opinion, women are not involved in bitcoin because bitcoin is going nowhere (and they know it). Or maybe, simply, bitcoin is going nowhere and women are not involved. 

Why Bitcoin's male domination will be its downfall 

By Felix Salmon

Nathaniel Popper’s new book, Digital Gold, is as close as you can get to being the definitive account of the history of Bitcoin. As its subtitle proclaims, the book tells the story of the “misfits” (the first generation of hacker-l...



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OpTrader

Swing trading portfolio - week of April 20th, 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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Sabrient

Sector Detector: Earnings and GDP temporarily take investor spotlight off the Fed

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

Courtesy of Sabrient Systems and Gradient Analytics

As we get into the heart of earnings season and anticipate the GDP report for Q1, the investor spotlight has been taken off the Federal Reserve and timing of its first interest rate hike, at least temporarily. Even though Q1 economic growth will undoubtedly look weak, the future remains bright for the U.S economy – even though many multinationals will struggle with top-line growth due to the strong dollar – and any near-term selloff resulting from weak economic or earnings news should be bought yet again in expectation of better results for the balance of the year. High sector correlations remain a concern, reflectin...



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Promotions

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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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.

...



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Mapping The Market

S&P 500 Leverage and Hedges Options - Part 2

Courtesy of Jean-Luc Saillard.

In my last post (Part 1 of this article), I looked at alternative ETFs that could be used as hedges against the corrections that we have seen during that long 2 year bull run. Looking at the results, it seems that for short (less than a month) corrections, a VIX ETF like VXX could actually be a viable candidate to hedge or speculate on the way down. Another alternative ETF was TMF, a long Treasuries ETF which banks on the fact that when markets go down, money tends to pack into treasuries viewed as safe instruments. In some cases, TMF even outperformed the usual hedging instruments like leveraged ETFs. There could of course be other factors at play since some of 2014 corrections were related to geopolitical events which are certain...

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Pharmboy

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 boys...it 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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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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