Archive for the ‘Phil’s Favorites’ Category

After coup, will Zimbabwe see democracy or dictatorship?


After coup, will Zimbabwe see democracy or dictatorship?

Courtesy of Steven Feldstein, Boise State University

For decades, Robert Mugabe ruled Zimbabwe in a ruthless, even reckless manner. Over nearly 40 years, he turned the “jewel of Africa” into an economic basket case that’s seen inflation of up to 800 percent.

Then, late in the night of Nov. 14, the country’s security services detained and put Zimbabwe’s 93-year-old president under house arrest in what appeared to be a military coup. The whereabouts of his powerful wife, Grace, are unconfirmed.

Much remains unclear at this early stage. Will violence erupt? Is this really the end of the Mugabe era?

I don’t know the answers to those questions yet. I’m not sure even Vice President Emerson Mnangagwa, who appears to have orchestrated Mugabe’s overthrow, knows how his gambit will turn out.

But with each passing hour, it is increasingly evident that Zimbabwe – a country whose politics I spent uncountable hours grappling with as a State Department official – is poised to see its first real leadership transition since 1980.

Setting the stage for Zimbabwe’s coup

For decades, Mugabe’s grip on Zimbabwe was iron-clad. Even when challenged by an invigorated opposition in 2008, he kept the presidency by entering into a nominal power-sharing agreement. After a decisive electoral victory in 2013, though, he cast the coalition aside.

But as the elderly president grew increasingly frail this year, the power struggle to succeed him became frenzied. Two major camps were vying for power.

Vice President Emerson Mnangagwa, who as a soldier fighting for Zimbabwe’s liberation earned the nickname “the crocodile,” represented the old guard. The 75-year-old enjoyed strong military backing, particularly from the veterans’ association, a powerful coalition of former combatants from Zimbabwe’s independence struggle which began in 1964 and ended in 1979.

Last year, the group broke with Mugabe in a public letter, declaring that he had “presided…
continue reading

The Junkie Market, i.e., Lots Of Highs & Lows, Is Back

Courtesy of Dana Lyons

The past few days have seen a reversal from substantial net New lows to substantial net New highs – a condition that has preceded poor performance in the past.

We’ve posted several pieces in the past regarding what we’ve termed “Junkie Markets” – junctures characterized by a substantial number of both New 52-Week Highs and New 52-Week Lows.

Such conditions represent a key component of various and notorious market warning signals, such as the Hindenburg Omen and others. As the ominous sounding names would imply, the historical stock market performance following such signals has been poor. We have found the same to be true with respect to our “Junkie Markets”. Today’s Chart Of The Day deals with a new variation of the Junkie Market.

Specifically, we have seen an unusual development over the past 2 days. On Wednesday, the number of net New Lows on the NYSE, i.e., New Lows minus New Highs, exceeded 2% of all exchange issues, a fairly large amount. The very next day, yesterday, conditions completely reversed as we saw net New NYSE Highs, i.e. New Highs minus New Lows, actually account for more than 2% of all issues. If you think that sounds strange, you’re correct. It is just the 15th such occurrence since the start of our data in 1970.


Here are the dates of these reversals:

  • 3/25/1970
  • 4/14/1972
  • 7/11/1974
  • 10/20/1977
  • 1/2/2001
  • 4/22/2004
  • 5/11/2004
  • 4/18/2006
  • 6/28/2007
  • 7/19/2007
  • 9/19/2008
  • 5/30/2013
  • 10/10/2013
  • 1/15/2015
  • 11/16/2017

What would cause such a phenomenon? Well, the only thing we can offer is that a Junkie Market, i.e., one with lots of New Highs and Lows, is really the only type of market in which such a reversal is even possible. Thus, it should not be surprising that the S&P 500’s aggregate performance going forward following these precedents has been less than stellar (incidentally, aggregate performance is similar following the 19 occasions of the opposite reversals, i.e., >2% Net New Highs to >2% Net New Lows).


With median returns negative from

continue reading

The house of Mugabe crumbles – but it’s too soon to celebrate in Zimbabwe


The house of Mugabe crumbles – but it's too soon to celebrate in Zimbabwe

Courtesy of Stephen Chan, SOAS, University of London

It seemed that Robert Mugabe, the 93-year-old Zimbabwean president, would rule his country until he died – but in the end, his fall was very swift. Mugabe’s decision to depose vice-president Emmerson Mnangagwa, at the behest of his 52-year-old wife Grace, was the last straw, and the army stepped in to depose him in a smooth operation that met no opposition.

Emmerson Mnangagwa. UN Geneva via FlickrCC BY-NC-ND

Grace Mugabe’s political assassination attempt on Mnangagwa – a move to position herself as her husband’s successor – drew comparisons with Lady Macbeth, not least since her hunger for power finally brought about the Mugabes’ downfall. The only real question was how her veteran husband let her lead him to that fatal step without seeing the blowback coming.

The first lady started out as a young secretary in Robert Mugabe’s typing pool. She became his mistress in the early 1990s and married him in 1996 in a lavish wedding ceremony. She began her formal rise to power in 2014, as head of the ruling Zimbabwe African National Union-Patriotic Front (ZANU–PF) party’s Women’s League. But where she really flexed her muscles was in a ruthless campaign to expel Mugabe’s vice-president, war heroine Joice Mujuru, first from office and then from the party.

In so doing, she antagonised the war veterans who saw Mujuru as one of their own, but she shored herself up with the support of ZANU-PF’s Youth League. She became a leader among the so-called G40 – the Generation of 40, a faction of younger ZANU-PF party members in their 40s and 50s who conspired to target her rivals. Mnangagwa, a veteran and former spymaster, was next on her hitlist.

Although she did not officially join the cabinet of ministers, her G40 allies there worked against Mnangagwa and his allies. They drummed up the relentless refrain that Mnangagwa was working to undermine Robert Mugabe.

Grace Mugabe’s volatile temperament made news across the continent when she attacked a 20-year-old woman, who had been partying with her sons in a…
continue reading

Latin American history suggests Zimbabwe’s military coup will turn violent


Latin American history suggests Zimbabwe's military coup will turn violent

Courtesy of Rut Diamint, Torcuato di Tella University

On Nov. 14, a group of soldiers from the Zimbabwe Defense Forces arrested and detained Zimbabwean President Robert Mugabe. The move came just days after Army Commander Constantine Chiwenga warned that the military would not “hesitate to step in” if Mugabe did not cease to “purge” his government of independence war veterans.

The armed forces have taken control of the government and the state broadcaster. Mugabe’s wife has fled the country.

The Zimbabwean Army nonetheless insists that “this is not a military takeover of government.” Even as tanks patrol the streets of the capital, Harare, and the tap-tap of military-issue boots echoes across the corridors of power, the generals repeat that old refrain: They just want to restore order and improve Zimbabwe’s ailing economy.

Their intervention, the generals insist, is a patriotic act that will improve life for all. And while it is true that Mugabe is a ruthless despot who has woefully mismanaged Zimbabwe for the past four decades, a military coup is not the right way to end his reign.

World history is full of atrocities committed in the name of law and order. The international community should be concerned about what’s happening in Zimbabwe right now. I’m an Argentinean scholar of Latin American militarization, and I can attest that so-called “democratizing coups” are largely fiction.

Atrocities in the name of progress

Latin America offers a perfect cautionary tale for those who believed Zimbabwean Major General Sibusiso Moyo when he promised a bloodless rebellion.

For much of the 20th century, most Latin American nations saw some form of military dictatorship. Some countries, Paraguay and Nicaragua among them, spent long periods of the last century under the rule of individual dictators – men who, like Mugabe, were protected by their very own Praetorian Guard.

Other nations had long-term military governments, often with changing leadership. From 1964 to 1990, military dictatorships controlled 11 countries in Latin America. Argentina and Chile are the most famous examples, but Ecuador, Guatemala, Brazil, Bolivia, El Salvador, Peru, Panama, Honduras and…
continue reading

America is in Terminal Decline

Courtesy of The Automatic Earth

Rembrandt van Rijn The Three Crosses 1653

John Rubino recently posted a graph from Bob Prechter’s Elliot Wave that points to some ominous signs. It depicts the S&P 500, combined with consumer confidence and savings rate. As the accompanying video at Elliott Wave, What “Too Confident to Save” Means for Stocks, shows, when the gap between high confidence and low savings is at its widest, a market crash -often- follows.

In 2000, the subsequent crash was 39%, in 2007 it was 54%. We are now again witnessing just such a gap, with the S&P 500 at record levels. Here’s the graph, with John’s comments:

Consumers Are Both Confident And Broke

Elliott Wave International recently put together a chart that illustrates a recurring theme of financial bubbles: When good times have gone on for a sufficiently long time, people forget that it can be any other way and start behaving as if they’re bulletproof. They stop saving, for instance, because they’ll always have their job and their stocks will always go up. Then comes the inevitable bust. On the following chart, this delusion and its aftermath are represented by the gap between consumer confidence (our sense of how good the next year is likely to be) and the saving rate (the portion of each paycheck we keep for a rainy day). The bigger the gap the less realistic we are and the more likely to pay dearly for our hubris.

John is mostly right. But not entirely. Not that I don’t think he knows, he simply forgets to mention it. What I mean is his suggestion that people stop saving because they’re confident, bullish. To understand where and why he slightly misses, let’s turn to Lance Roberts. Before we get to the savings, Lance explains why the difference between the Producer Price Index (PPI) and Consumer Price Index (CPI) is important to note.

Summarized, producer prices are rising, but consumer prices are not.

You Have Been Warned

There is an important picture that is currently developing which, if it continues, will impact earnings and ultimately the

continue reading

‘Hot potato’ shows why workers won’t benefit from Trump’s corporate tax cut


'Hot potato' shows why workers won't benefit from Trump's corporate tax cut

Courtesy of Steven PressmanColorado State University

File 20171117 19250 19mgss2.jpg?ixlib=rb 1.1

Who will be left holding the potato? Nobuhiro Asada/

Many children have played hot potato, a game in which they pass a spud to other children quickly so they don’t get stuck with it when the music stops.

Taxes are like that potato. No one likes paying them; everyone tries to pass them to others. The game of hot potato sheds some light on the debate over Republican tax cutting plans, particularly when it comes to companies.

The House just passed its tax cut bill. It would give about two-thirds of roughly US$1.5 trillion in net tax cuts over the next decade to businesses, mainly by lowering the corporate income tax rate to 20 percent from 35 percent. That puts a lot of money on the table. About $100 billion in U.S. corporate profits would be retained by companies rather than paid to the government each year.

Treasury Secretary Steve Mnuchin has claimed that most of this tax savings would go to workers, in the form of higher wages, in line with the president’s argument that the plan would benefit the middle class.

With the help of hot potatoes, let me explain why he’s wrong.

Treasury Secretary Steven Mnuchin holds up a sheet of $1 bills, the first bearing his name, as his wife Louise Linton looks on. AP Photo/Jacquelyn Martin

Why workers won’t gain

There are two ways a corporate income tax cut can trickle down to workers’ pockets: directly through higher wages or indirectly via lower prices at stores selling the things they buy.

Mnuchin contends that workers currently bear 70 percent of the corporate tax burden – or get stuck with 70 percent of the corporate tax hot potato. So, a tax cut would mean that companies pass much of their tax benefits to their employees by paying them more or by cutting prices and increasing the buying…
continue reading

‘He’s Pavlov and we’re the dogs’: How associative learning really works in human psychology


'He's Pavlov and we're the dogs': How associative learning really works in human psychology

Courtesy of Edward WassermanUniversity of Iowa

File 20171116 15410 tx7voe.jpg?ixlib=rb 1.1

When the ringing of a bell comes to mean something more. Maisei Raman/

My ears perked up when, in recent weeks, I heard Donald Trump and Ivan Pavlov mentioned twice in connection with each other. After all, I’m an experimental psychologist who journeyed to Russia to conduct conditioning research with Pavlov’s last living student.

First, political provocateur Bill O’Reilly wrote online that

“Donald Trump is kind of like the Russian psychologist Ivan Pavlov. Pavlov rang his bell and dogs salivated; Trump’s voice rings out and leftists everywhere froth at the mouth.”

Then, political commentators Abe Greenwald and Noah Rothman observed in their lively back-and-forth that

“It is such a huge master switch that [Trump] can throw to watch both sides and the media completely respond to what he wants in the way he wants. And, so he is Pavlov and we are all the dogs. Right?”

Each remark contains a profound truth: Extremely strong associations can indeed be formed between events. Remember, Pavlov’s own breakthrough was discovering that dogs could learn to associate the dinner bell with the meal itself and so begin to drool when the bell rang in advance of when the feeding bowl was actually placed within reach.

But, these commentators cast such learned associations in a decidedly negative light. People were reduced to canines and their reactions downgraded to mechanical reflexes. Nothing in these pejorative remarks hints at how associative learning contributes to performing responses that help us survive and thrive.

When one thing gets linked to another

Associative learning was recognized and appreciated long before Pavlov initiated his pioneering scientific studies. British philosophers including John Locke, David Hume and David Hartley had, based on their own keen observations and introspections, outlined basic associative laws by which one event comes to suggest another.

I. P. Pavlov with three colleagues operating on a dog. Wellcome Library, CC BY

continue reading

Chart Crimes


Chart Crimes

Courotesy of 

Stretching a linear axis vertically to prove a point. Don’t do this.

Some things should be shown as a level, not a percent change. The ten-year yield going from 2% to 2.1% is not a 5% change, it’s a ten basis point move. The same holds for the VIX. Don’t do this.

So many things wrong with this one. This chart provides zero information. Comparing dollars across multiple decades have to be real, not nominal, and this should be shown as a percent change, year-over-year works.

Using the lowest point in a cycle to support your narrative is not a good look…

…Neither is choosing the high point.

Showing the percent change on an asset whose interest or dividend is a big percent of the total return is a big no no. The price of BND is only up 6% over the last decade, but the total return is 48%.

Do not use monthly candle stick charts in the middle of the month, or weekly candle sticks in the middle of the week. This is what you would have seen on October 15, 1987…

…The real thing looks a little different.

“I’m expecting this to resolve in an explosive fashion, one way or the other.” Technical analysis on economic charts. Just don’t.

Comparing lines that have absolutely nothing to do with each other is a chart crime. This gem comes from Joe Weisenthal 

This is hardly an exhaustive list. Chart manufacturers have endless ways to fool you. Stay woke.

Ode To Joy


Ode To Joy

Courtesy of 

This week marks my ninth year writing The Reformed Broker blog.

When I started in November 2008, I never could have imagined where this thing would lead. Now I can’t imagine my life without having done this. Everything I’ve managed to build and all of my colleagues, new friends and opportunities have sprung from that one afternoon, lying on the couch, and that initial spark of inspiration. I don’t know where it came from but something inside of me said, “You need to write. You need to start saying some of the things you’re thinking out loud.

And so I did. It cost me thirteen dollars to buy the domain name and a few minutes get my wordpress account set up.

That one moment changed the course of my life. I was going nowhere, with no money in the bank and no plan whatsoever to build a life for myself. I was in a rut, frustrated and watching the global economy collapse all around me. A two year old daughter, another kid on the way, an job at an imploding brokerage firm, a mortgage, and zero prospects for anything better.

Until I decided to try something new.

That one fateful decision and thousands of posts later…

It’s led to a career in professional wealth management, a regular gig starring on the best show on financial television, almost a million Twitter followers and the fourth fastest growing investment advisory firm in America.

It’s my American Dream. But I haven’t done it alone.

Beethoven premiered his Ninth Symphony in the spring of 1824 in Vienna. He had assembled his largest ever group of musicians to perform it, including both the Kärntnertor house orchestra and the Vienna Music Society, using amateurs to fill in where needed. It was also the first major symphony by any composer to feature human voices in addition to the instruments.

Most of what I do here on the blog is me building on the voices of others. Using the charts and data and insights and links of the people I read and follow

continue reading

How shops use tricks to get you spending


How shops use tricks to get you spending

Cathrine Jansson-BoydAnglia Ruskin University

File 20171116 15454 1p3rc98.jpg?ixlib=rb 1.1

See it, touch it, smell it, buy it. Shutterstock

In the business of shops and selling, times are tough. Retail sales indicate that shops are are struggling to persuade customers to part with their cash.

But there are some innovative methods which retailers are using to address the challenge of enticing and engaging consumers. And it’s not just about slashing prices and Black Fridays. Many well-known businesses make use of psychology to connect with customers and increase sales.

Here are some of the tricks they have up their shop sleeves.

Sniffing out a sale

A nice smell can make retail experiences more pleasurable. A scent can also have a strong association, some of which are shared, like the smell of a hospital or the seaside. It therefore makes sense to use smells that evoke positive emotions to improve sales.

This is the reason why branches of Starbucks are filled with the aroma of “Pumpkin Spice Lattes” during autumn, and gingerbread flavours over Christmas. The pumpkin fragrance is strong and can arouse positive seasonal memories related to “trick or treating” or Thanksgiving celebrations. But it is not just about memories. Using sweet smells can simply enhance the shopping experience in cosmetics stores such as Lush, or lingerie specialist Victoria’s Secret.

A hands on approach

A retailer that is precious about their products and prevents customers getting their hands on the goods, will miss out. Touch is vital for influencing consumer perception, and a lack of it can be frustrating.

Apple understand this better than anyone. Their stores are laid out specially to invite people to explore the products with their hands, in plenty of clean space. Tactile interaction not only increases the likelihood of purchase, it also increases perceived pleasure as touch is closely associated with emotions.

Getting emotional

Connecting emotionally with consumers is the holy grail of retail. Consumers subconsciously search their feelings when trying to work out what they think about a product.

continue reading


Phil's Favorites

COP 23: three ways cities are leading the fight against climate change


COP 23: three ways cities are leading the fight against climate change

Courtesy of Barbara NormanUniversity of Warwick

Mettus /

The global population is predicted to rise to 10 billion by 2050, and the majority of those people will live in cities. Given that cities ...

more from Ilene

Zero Hedge

Opioid-Related Deaths Drained $500 Billion From The US Economy In 2015

Courtesy of ZeroHedge. View original post here.

The national opioid epidemic is even larger drain on the US economy than previously believed, according to a new analysis from the White House Council of Economic Advisers. The cost of opioid-related deaths in 2015 was $504 billion, according to the CEA – a figure equivalent to 2.8% of that year’s gross domestic product.

CEA said the report, which was obtained by the Hill ahead of its release on Monday, was...

more from Tyler

Digital Currencies

As Bitcoin Tops $8,200, Only 39% Of Survey Respondents Say It's A Bubble

Courtesy of ZeroHedge. View original post here.

Having first surged above $8000 overnight amid Zimbabwe's chaos, it appears uncertainty in the core of Europe has driven further demand for cryptocurrencu protection, sending Bitcoin to a new record high of $8247 - up 50% from the 'Bitcoin Cash' crash weekend lows.


more from Bitcoin

Insider Scoop

Earnings Scheduled For November 20, 2017

Courtesy of Benzinga.

Companies Reporting Before The Bell
  • Bitauto Hldg Ltd (ADR) (NYSE: BITA) is expected to report quarterly earnings at $0.29 per share on revenue of $335.93 million.
  • Star Bulk Carriers Corp. (NASDAQ: SBLK) is estimated to report a quarterly loss at $0.04 per share on revenue of $66.32 million.
  • Northern Tech... more from Insider

Chart School

Weekly Market Recap Nov 19, 2017

Courtesy of Blain.

Monday, Tuesday, and Friday saw the now usual “no volatility” days – while bears finally saw some action on Wednesday, bulls came right back Thursday with even bigger gains.  So while we have been cautious on the market for 3 weeks now all that has meant is consolidation in the market (granted the Russell 2000 has taken some hits).  For the week the S&P 500 fell 0.3% while the NASDAQ gained 0.5%. Economic news was light (we cover retail sales below), and earnings are coming to their tail end so we are in a bit of a news vacuum as negotiations about the tax reform bills will take the reigns.

Retail sales slowed in October, rising...

more from Chart School


The two obstacles that are holding back Alzheimer's research

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


The two obstacles that are holding back Alzheimer's research

Courtesy of Todd GoldeUniversity of Florida

Family members often become primary caregivers for loved ones with Alzheimer’s disease. tonkid/

Thirty years ago, scientists began to unlock the mysteries regarding the cause of Alzheimer’...

more from Biotech


Robert Mugabe Under House Arrest, Military Takes Control Of Zimbabwe

By Andjela Radmilac. Originally published at ValueWalk.

Zimbabwe’s head of state, 93-year-old Robert Mugabe, has been placed under house arrest after what seems to be a military coup took place in the nation’s capital.

By U.S. Navy photo by Mass Communication Specialist 2nd Class Jesse B. Awalt/Released [Public domain], via Wikimedia CommonsRobert Mugabe is safe

Following numerous reports on social media late Thursday night about the increased military presence in Harare, the capital of Zimbabwe, the country’s military took...

more from ValueWalk

Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...

more from Our Members

Mapping The Market

Puts things in perspective

Courtesy of Jean-Luc

Puts things in perspective:

The circles don't look to be to scale much!


more from M.T.M.


Swing trading portfolio - week of September 11th, 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 ...

more from OpTrader


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!

[For more information on NewsWare, click here. For a list of prices: NewsWar...

more from Promotions

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.


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...

more from Kimble C.S.

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...

more from David

FeedTheBull - Top Stock market and Finance Sites

About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>

As Seen On:

About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>